Intrinsic and Extrinsic Reward

At the heart of my research is the issue of extrinsic versus intrinsic reward, in gameplay and game design. Intrinsic rewards, in gaming, generally constitute the experience of playing the game itself; the flow state one ends up in (see Flow: The Psychology of Optimal Experience by Csikzentmihalyi for an introduction to the concept of flow), in which external cares are forgotten.

Extrinsic rewards might, in a non-digital game, include such things as an improved ranking on a leaderboard, a prize for winning a tournament, the praise of observers, etc. Digital games, borrowing from tabletop roleplaying games (Dungeons and Dragons, et al), have for some time used experience points (XP), "gold pieces", magic items, and other in-game rewards. It seems most likely that the brain treats these latter, in-game rewards in much the same way as it treats out-of-game extrinsic rewards. That is, most players crave in-game extrinsic rewards such as gold and XP just like most humans crave money and consumer goods. The convergence of the in-game economy with the real world economy has been well documented (see this Guardian article on the Chinese government trying to ban the process, for example); if a currency's worth depends on what one can buy with it rather than the worth of the materials involved in making the coins, currency made of pixels and data is surely as viable as currency made from non-precious metal.

A potential disconnect arises, because focusing on extrinsic rewards, as a player or in other spheres of life (worker, student, etc.), tends to reduce the intrinsic reward of the activity itself. This reduction of intrinsic reward (fun, satisfaction) can reduce the amount of time the player spends in a flow state, as well as reducing their creativity (see Punished by Rewards: The Trouble with Gold Stars, Incentive Plans, A's, Praise, and Other Bribes by Alfie Kohn for a good overview of the vast quantity of research on this subject).

So -- in simple terms -- does the focus on XP, gold, and so on, make games like World of Warcraft less fun than they otherwise would be? Or, as McGonigal argues (Reality Is Broken: Why Games Make Us Better and How They Can Change the World), does the regular trickle of gold and XP function predominantly as an informational mechanism, giving players constant feedback on their process, which would enhance their enjoyment of the game (intrinsic reward)? More research is needed. Hopefully said research will let us design better games, as well as helping us to better understand the appeal of different types of game.