SCVNGR CEO Seth Priebatsch: The Game Layer Is Coming (SXSW)

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Today’s SXSW keynote speaker is Seth Priebatsch, founder and CEO of location-based gaming startup SCVNGR.

SCVNGR has had a big week — on Thursday the site launched a spinoff service called LevelUp that combines some of the retention mechanics seen in location-based games with the steep deals offered by sites like Groupon.

Priebatsch, who maintained an apparently super-human energy level throughout his talk, discussed how many of the gaming mechanics seen in the virtual world will be applied in the physical world to create a so-called “Game Layer”. “It’s brand new and has not been built,” Priebatsch says. “The last decade was the decade of social — it took connections between friends, family, and coworkers and put them online. It’s called Facebook. The social layer traffics in connections.” Conversely, Priebatsch says that the Game layer traffics in influence — “It will influence where we go, what we do, and how we do it.”

Next, Priebatsch outlined how many of the principles we associate with games — levels, rules, rewards, motivated players, etc. — are exemplified by our school system. The problem, he says, is that school has an engagement issue: people are bored.

Priebatsch explains that the under the grading system we’re all familiar with, there’s a constant possibility of failure. One bad day can drop you from an A to a B. This, Priebatsch says, is bad. “It’s a game mechanic, and it’s letting people lose in a game you don’t want them to lose”. His solution is a progression dynamic, where instead of being graded for each assignment and test individually, everyone starts at zero ‘experience points’ and then works their way up to higher levels.

His next topic was one that’s also familiar to both students and games alike: cheating. The disincentive for students isn’t on cheating itself — it’s on getting caught. Under the traditional system it’s the teacher versus the students, and the students work out ways to cheat without the teacher noticing. But there’s a different solution. At Princeton, exams are not monitored by a teacher or TA. You walk into the classroom, your test is on your desk, and there’s a box to turn it in. The only rules: you have to sign an honor code, and complicity is a crime — in other words, all of the students are supposed to watch out to make sure their peers aren’t cheating. This has dropped the number of cheating incidents at Princeton from 400 to 2 cases annually.

One of the more interesting topics Priebatsch covered were the faults currently seen in location-based games like SCVNGR, Foursquare, and Gowalla. In one telling pie chart, he showed just how few people, relatively speaking, are using these services (it’s a small slice of the pie). Priebatsch says that the big rule that these games have — users must be at a certain venue in order to check in — are too restrictive. They limit the number of people that can be engaged with, and the window of time that the service has to get the user’s attention.

Another issue: reward schedules. Priebatsch explains that rewards have been shown to be very effective, leading to spikes in engagement and activity. But it’s not a perfect system — handing out rewards can set users up to expect them everywhere. Without the reward as an incentive, people often stop checking in (he points to the Gap/Facebook deal as an example, and says that he believes many of the users who participated in that deal have stopped checking in).

Priebatsch closed out the talk with a demonstration of what he calls communal gameplay and communal discovery. Everyone in the keynote hall was given a colored card — there were a handful of different colors, and the cards were distributed at random. The audience was then asked to swap cards with their neighbors so that each row of seats was the same color. The audience was given 180 seconds to pull of the task, and they did it with a minute to spare.

The feat, Priebatsch says, is an analogy for how much people can get done with decentralized leadership, applying local solutions to global problems. And somehow — Priebatsch didn’t really get into giving any concrete predictions — the ‘game layer’ is going to help make this happen.