Consider the costs of extrinsic rewards in your games, and the long term health of the industry.
Creativity, interest, curiosity, enjoyment, learning memory, conceptual understanding, and upstanding behavior are fueled by intrinsic motivation. Extrinsic rewards improperly implemented can knock these off like a koopa shell sliding through a line of goombas. Extrinsic rewards can turn an interesting task into a drudge, and can turn play into work. They often unknowingly sacrifice long term goals for short term gains.
What if awarding players for playing games with extrinsic rewards means they will play less games in the long term?
One of the most sited articles in motivation literature was performed by Mark R Lepper, David Green, and Richard Nisbet. The three researches observed a classroom of preschoolers and identified the children who spent their free time drawing. The researchers divided the children into three groups.
The first was the “expected award group,” they showed each of these children a “good player” certificate adorned with a blue ribbon and featuring the child’s name. They asked if the child wanted to draw in order to receive the award.
The second group was the “unexpected award group.” Researchers simply asked these children if they wanted to draw. If they decided to, when the session ended the researchers handed each child one of the “good player” certificates.
The third group was the “no award group.” The researchers asked these children if they wanted to draw but didn’t promise or give them a certificate.
Two weeks later, teachers set out paper and markers during the preschools free play period while the researchers secretly observed the students. Children in the “expected award group” showed much less interest and spent much less time drawing than the other two groups. When children didn’t expect a reward, it had little impact on their intrinsic motivation. Only contingent rewards (if you do ____, then you get ____.) had the negative affect.
By using Gamification techniques such as badges, levels, and achievements to increase engagement may actually do the opposite over time.
If/then rewards require us to give up some of our autonomy which decreases intrinsic motivation. This puts at risk all the attributes listed at the top of the article.
Extrinsic rewards in games and gaming communities take the form of trophies, badges, achievements, public recognition, attention, privileges, money, hats, and more.
Instead of learning about and mastering a task, extrinsic rewards encourage players to only do what is necessary to get the reward as soon as possible. When rewards are at stake players prefer to engage in easy successes rather than engage in optimal challenges. Think about MMO players grinding an easy area that is optimal for loot or XP rather than another area that is more challenging for their level.
When no rewards are at stake a task is done once curiosity is satisfied, mastery is attained, problem is solved, a question is answered, or fatigue sets in. When Rewards are at stake a task is done when the reward criterion is reached.
When we use these rewards to control player behavior for the short term we do considerable long term damage.
Self-determination theory advances the view that there are three basic, innate, psychological needs that we all have: the need to belong or feel connected, the need to feel competent, and the need for autonomy or self-determination. When these needs are met, we are motivated, productive, and happy. When we use if/then extrinsic rewards we inhibit autonomy and thus motivation, productivity and happiness.
When adding rewards ask yourself if it is manipulating player behavior by extrinsic rewards.
Games can be intrinsically rewarding to play in themselves. By using rewards responsibly we can create better games, and players will be continue to come back to games as a rewarding medium that makes life better.
If you are interested in learning more about what motivates us, I suggest the book Drive by Daniel H. Pink.
 Mark R. Lepper, David Greene and Richard Nisbet, “Undermining Children’s Intrinsic Interest with Extrinsic Reward; A Test of ‘Overjustification’ Hypothesis, ” Journal of Personality and Social Psychology 28, 1973, 129‐37.
 Edward L. Deci, Richard M. Ryan, 2010