On gamifying consumer apps

It's all about flaring up the intrinsic motivations of your user.

The most powerfully gamified mobile apps tie things to core human motivations, which are intrinsic by nature. They creatively use game mechanics to intensify the engagement loops in an activity not previously perceived as a game.

In the games industry, developers often frown when they hear the term gamification. The distaste for gamification comes from the sense that industries outside of gaming have reduced game design to a superficial representation.

When discussing gamification, we often think about badges that are inside a consumer app. As an app user, you’d collect these badges by accomplishing goals. You could then show off your badges in your profile to other app users. However, badges alone have rarely sparked excitement or affected user interest and motivation to return to the app long-term. They felt extrinsic and insignificant. Most importantly, badges weren't proving to be a feature that app developers could use to grow these services.

However, leaderboards and high scores, once confined to the arcades, have found new life in apps: likes on Facebook, follower counts on Instagram, and retweets on Twitter. This isn't just about numbers; it's about our place in the social hierarchy, an invisible leaderboard where we're ranked by our peers and within our sectors of influence. Yet, these platforms don't officially promote such rankings—this is a game played in users' minds. The rewards for this game are very intrinsic, like gaining recognition, leading to high user retention. Packy McCormick wrote a great piece about this called The Great Online Game.

After reading Jorge Mazal’s piece on How Duolingo reignited user growth, I got curious about the discoveries that are still being made in gamification.

I’ve spent many months on Duolingo, the language learning app, trying to understand why it has skyrocketed in popularity and made its developer company a publicly listed multi-billion dollar company. In the piece, Jorge explains how his team used analytics to understand growth drivers and settled on a North Star metric that they now follow at Duolingo.

My piece focuses more on the user-facing side of Duolingo and its impact on their KPIs.

The Duolingo experience

Duolingo, the language learning app, has come a long way in the past decade. I recall using it in 2016 to learn Dutch, and it felt like an HTML page crammed into a mobile app—functional but crude. Fast-forward to 2024, and Duolingo has transformed into a top-tier consumer app.

What sets Duolingo apart are its visuals, animations, and sounds. Few apps can match its quality, except mobile games by companies like Supercell. Duolingo's polish level signifies a premium user experience with extraordinary attention to detail. It's easy to imagine Steve Jobs praising Duolingo as the epitome of Apple's ecosystem—almost the perfection he envisioned for his products.

Duolingo captures gaming's ability to deliver delightful experiences exceptionally well. The atmosphere of Duolingo is pure delight. It offers excellent moment-to-moment gameplay through language exercises that are tied to short-term and long-term game loops.

The animated characters in Duolingo play a significant role in its success. They convey positive and negative emotions as users complete or fail tasks. Unlike other apps, mundane aspects are replaced with engaging interactions – characters comment on your progress or celebrate your achievements. This level of celebration is rarely seen outside of Supercell's games and other polished casual titles.

As a free user, you'll encounter promotions for Duolingo's subscription plan. But instead of intrusive pop-ups, you're treated to Pixar-like animations with dazzling lights and charming characters that leave you feeling good about the experience.

The user interface borrows heavily from gaming conventions – navigating between sections using a lower navigation bar and highlighting goals and streaks throughout the app.

Consider the top mobile gaming companies: Supercell with its Clash universe, Dream Games with the Royal universe, and King with the Candy universe. These companies excel not only in offering a slick user interface but also in world-building and branding.

Enter the Duolingo universe. It's a collection of identifiable characters and emotions that resonate with users. Despite being a utility app, it embraces this kind of universe-building.

Some might argue that utility apps shouldn't concern themselves with such things. However, if you have a product with an excellent product market fit, why not strive to redefine your industry? Duolingo has become synonymous with language learning, much like Uber has become for ride-sharing.

Intertwined progression and monetization

The dance between progress and monetization in consumer apps is a delicate one. Monetization can take various forms, such as ads, subscriptions, and in-app purchases. Let's examine these through the lens of Duolingo.

First up: ads. Duolingo has forced video ads that pop up and rewarded ads that users can opt for to gain more lives and learn more. Next, subscriptions offer access for a set period. Super Duolingo, for example, costs $7.99 per month and provides unlimited learning without life caps – an all-you-can-learn buffet. Lastly, in-app purchases let users buy more lives or other virtual items.

As someone from the world of free-to-play mobile games, I'm intrigued by in-app purchases in consumer apps. In free-to-play games, these purchases typically grant access to parts of the game sooner than non-spenders can reach them. The latter group faces a more arduous grind to access this content. But why do people spend on in-app purchases? It's about accelerating progress and fulfilling player motivations faster. Quantic Foundry’s model illustrates how to look at player motivations.

Quantic Foundry defines motivations across 12 categories. Let's look at some examples: Candy Crush, a match-three puzzle game, is about completing the saga map, and it has a competitive aspect where you compete against your Facebook friends. Golf Clash focuses on competition and challenge as players seek to master the game and improve their golf skills. Clash of Clans, a town-builder battle game, centers on competition and power, as it's heavily tied to a PVP (player-versus-player) loop.

So why are learning apps like Duolingo doing well but not topping the top-grossing charts, even as you have a road of infinite learning – Spanish today, Italian tomorrow, Greek after that? There are always new goals to strive for and mountains to climb. 

However, because it’s inherently a learning app, Duolingo struggles to tickle the player motivations of top-grossing games: using real money to beat others in player-versus-player competition. Duolingo’s power and competition are limited to leaderboards, which are weak PVP modes. Duolingo has the potential of Candy Crush but not the high LTV aptitude of Clash of Clans, where paying for power exists.

What is already monetizing well in consumer

Currently, in a few types of consumer apps, spending has been used to transform player motivations into activities not confined to linear or single-player progressions. Two prime examples are sports betting apps and dating apps.

At F4 Fund, we've invested in a company called Omada. Sports betting is an everyday activity, and people like to gamble on mobile devices. But what is interesting about Omada is that they've stripped out the real-money gaming aspect, hence taking something premium and making it free-to-play. They also have leaned heavily into the Duolingo-type gamification aspects and are getting high engagement. For monetization, players are allowed to collect and purchase team cards, like a Manchester United card, which provides a boost when betting on that team's victory. As a result, in-game currency winnings are amplified due to the collected cards.

Dating is a consumer app category where a lot of gamification, amplified by player motivations that lead to high spender monetization, can be helpful in the future. Users attempt to win over their romantic interest by spending on virtual items such as boosts. However, these purchases are fleeting—players must buy more the following week to continue progressing in “the dating game.” This creates an ongoing need for investment in pursuing love and victory, hence the high LTV. Dating might feel like it's a crowded category, but there's so much to be innovated in that realm. We’ve recently invested in a company called Blush, which is creating innovation in the dating industry.

Final words

Right now, Duolingo is the shining example of gamifying a consumer app. It illustrates the difference between apps that use badges as a gamification layer and how deep gamifying of an app makes things feel good, from all the moments of achievement to rewarding specific loops and activities. 

We at F4 Fund are interested in investing in consumer app startups. We are encouraging game developers to leave gaming and shop in consumer land. There's so much to do; we feel that game developers are uniquely positioned to develop the consumer apps of the future.

When designing gamification for apps, it's crucial to tap into users' inherent motivations. By understanding what drives and inspires them, you can create experiences that truly resonate and engage with them on a deeper level, which is the whole point of gamifying apps. It can lead to greater satisfaction, loyalty, and overall success for both the user and the company.