The Games Companies Play

Siemens, Hilton, and Target are using games to train workers and improve how they design and market products

Siemens (SI) is pinning high hopes on Pete. A cheery fellow, Pete wears a yellow hard hat with his name emblazoned across the front. He's polite and eager to lend a hand. He's also animated: Pete the Plant Manager stars in a new online video game from Siemens called Plantville that simulates what it's like to run a manufacturing facility. The aim is to take three dilapidated factories and make them more efficiently meet customer orders by hiring employees, redesigning layout, and buying and installing new Siemens equipment.

Germany's Siemens, which makes power plants, scanners, and trains, created the game to fuel equipment sales and foster greater employee knowledge of its products. "Employees are sometimes siloed in their business units and don't see the breadth and depth of our portfolio," says Tom Varney, head of marketing communications at Siemens Industry. The company joins a growing roster of enterprises as diverse as Hilton Worldwide's Embassy Suites hotel chain and German software maker SAP (SAP), which are using technologies that make games interesting in order to interact more effectively with customers and employees.

The trend, known as gamification, lets businesses weave elements of games into applications that otherwise have little to do with playing. The market for gamification will grow to $1.6 billion in 2015, from $100 million in 2011, according to Wanda Meloni, founder of M2 Research, a consulting firm that researches the gaming industry.

Companies such as Cold Stone Creamery and United Parcel Service (UPS) have for years used games for such tasks as training workers. Gamification is now letting managers push aspects of gaming into marketing, product design, and everyday work experience. It's also helping companies compensate for shortfalls in traditional forms of advertising and marketing, says Gabe Zichermann, chief executive officer of Gamification, a company that runs workshops for businesses that want to implement a gamification strategy. "What we have is a crisis of engagement," he says.

Nissan's "eco mode" dashboard service

Nissan Motor (NSANY) brought gamification to its new electric vehicle, the Nissan Leaf. The automaker uses the technology to help drivers conserve fuel. When the car is driven in so-called eco mode, its accelerator contains a counter push-back control mechanism that is activated when it detects excess pressure. The feature informs drivers that they're using more power than required. An online portal connected to the car's dashboard also lets drivers know how well they're conserving energy, compared with other drivers in the region. The most efficient drivers are given virtual bronze, silver, gold, and platinum medals.

Similarly, cashiers at Target (TGT) receive a score each time they check out a customer. The score is based on the the transaction's speed, with the checkout system also calculating the cashier's success rate over multiple transactions.

Companies need to guard against adding a superficial gaming gloss to applications—for instance, by creating meaningless leader boards that have little lasting impact on employee behavior, says Aaron Dignan, author of Game Frame, a book published in March that explores game mechanics in the workplace. "My hope is that it grows beyond that into a real discipline that's more rigorous than it is today," Dignan says. Managers also need to be alert to such possible unintended consequences as hacking or employees putting too much emphasis on the wrong aspects of play. "People could pay too much attention to things that don't matter or too little attention to things that do matter if the game is designed poorly," he says.

U.S. Companies Helped on Plantville

Siemens spent a year designing Plantville, working with such companies as Eugene (Ore.)-based game-design company Pipeworks Software, advertising and design firm Shaw Co. in St. Louis, and Fusion Performance Marketing in Plano, Tex. The game can be downloaded at and Siemens is using advertising, social media, and employee communications to get the word out. While the game hasn't been out long enough for Siemens to have amassed results, Varney says early feedback from employees has been positive.

Hilton's Embassy Suites is using game techniques in a customer loyalty campaign. Created with a marketing company called Maritz, the campaign targeted 50,000 of Embassy Suites' most loyal guests, then solicited their participation with 10 different approaches, including direct mail, e-mail, and asking customers to play a game. The game option proved most effective, says Christian Kuhn, director of brand marketing for Embassy Suites. The 5,000 people targeted by the game were most likely to open e-mails and later spent the most money, Kuhn says. That group accounted for about $200,000 of the additional $1 million in revenue generated by the campaign, he said.

Games may be more effective in marketing because they offer the gratification people experience when surprised and rewarded. An unexpected reward releases dopamine in the brain, giving beneficiaries a pleasurable feeling, says Barry Kirk, a vice-president at Maritz. "We don't think you can gamify something without understanding the human brain and neuroscience," Barry says.

Game designers are good at creating psychological hacks into how the human brain works to determine what motivates people, says author Dignan. That's why gamification can be a good fit for companies seeking to better engage workers. "It's about managing motivation and energy level and commitment," he says.

SAP's Games for Corporate Directors

Software maker SAP is turning to gamification to help corporate board members prepare for meetings. Directors typically must slog through thick binders full of documents or dashboards that feature key performance metrics. SAP is developing an application for Apple's iPad that boasts game elements such as progress bars and leader boards to get directors "more engaged in consuming various pieces of data," says Reuven Gorsht, senior director of strategy and global pre-sales at SAP. "We're dealing with very high-ranking executives that sit on six or seven boards and may have a full-time job running a company," he says. "Their time is precious and their attention span is fairly low." he says. The app should be ready in three to four months, he says. SAP is also looking at other ways to use game mechanics to make its software easier to use and more engaging for employees.

Traci Sitzmann, an assistant professor of management at the University of Colorado's business school, says games can make employees better at their jobs. She spent more than a year examining 65 studies and data from 6,476 trainees in a study due to be published in the journal Personnel Psychology. Those using video games had a 14 percent higher skill-based knowledge level, an 11 percent higher factual-knowledge level, and a 9 percent higher retention rate than trainees in comparison groups, Sitzmann says.

Siemens is looking to games, not only for retaining current employees but attracting future ones as well. "With Plantville, we think there's a big educational play with colleges and high schools," says Siemens' Varney. He says he hopes the game can help make manufacturing more attractive to young people. "We have about 3,000 jobs posted in the U.S. at Siemens, many in technology or manufacturing," he says. "We're hoping to inspire a new generation of plant managers."

Before it's here, it's on the Bloomberg Terminal.