Collect, Open, Hope: Why Reward Loops in Games and Casinos are so Powerful

The recent success of video games has prompted many to ask what their secret is. Markets scramble to “gamify” themselves in an attempt to emulate a fraction of the success that gaming enjoys nowadays. It is not just the mainstream that is thriving. Online games and the indie scene have seen major success as well. But what is the secret?

The answer is as simple as uttering the four-letter word; loop. Reward loops are the heart and soul of the video game industry. Game designers have long been aware that putting players in a loop where they have to improve in order to get new rewards is the one sure way to retain their attention. The principle may apply to video games, but it predates them by almost a century.

Reward Loops and Casinos

The modern gaming industry gave rise to the iGaming sector. Online gambling is now most people’s first choice for games of chance in which they can win real money. Affiliate websites like Casino Groups are going to be quite open about the influence that video games have had on the internet-based casino realm. But the land-based gambling market predates the gaming sector by centuries. And casino owners have been utilizing the concept of reward loops far longer than modern game designers. 

We need look no further than Charles Fey for proof of concept. The American inventor changed the gambling industry immensely at the tail-end of the 19th century by introducing the first ever slot machine to the public. The bar that purchased saw an immediate boost in attendance and crowds would form around the jackpot machine, with people eagerly waiting for their turn to roll by. Thinking about it, one would quickly realize what the secret of the slot machine’s success was. 

Slots offer that idea of a reward to this day. Land-based machines tend to have relatively low chances for victory, which means that most people are going to spend a lot of time spinning and not a lot of time winning. But each victory contributes to the reward loop that. The promise of a reward is often more enticing than the actual prize itself. It is why so many gamblers prefer jackpot slots, even knowing that actually hitting the jackpot is the equivalent of threading a needle with a chain. 

The Three Reward Loop Categories

Modern game designers have researched the concept of reward loops extensively, and have come up with three distinct categories. These distinctions may not be set in stone. But they do help to distinguish how different people may utilize loops to entice players to keep coming back to a game. 

The Core Loop is perhaps the most common of the three. Game designers may also refer to this type as the daily routine. The core loop is based around the idea of fast-paced gameplay and instant gratification. A player who wins a match will earn a reward. Excited to test out their reward, they will play another match instantly and thus earn more rewards. 

The Meta Loop is the exact opposite of the aforementioned core loop. It relies on the players’ long-term investment in the product. The meta loop is perhaps most obvious among trading card game players. It starts with the player purchasing a card in order to bolster their deck. With all of the cards that they’ve bought, they build a meta deck that is bound to perform well at tournaments. By doing a good job at a tournament they earn more cards as a reward, which keeps them engaged and coming back to the game.

The final loop exists entirely outside of the game design. It is what developers might call a social loop, that focuses around building a community rather than just playing the game. Multiplayer games thrive off of this idea of social loops. Friends that play together create both bonds and rivalries that keep them coming back for more adventures in the future. 

The Psychology Behind Reward Loops

We can accept that reward loops are the driving force behind the success of the gaming industry. But the question some may have now is why that is. As with most things relating to human culture and society, the answer is in the psychology behind them. Reward loops rely on some innate traits that most people exhibit. The first and most obvious of all being the drive towards socialization.

It has long been said that the human is a social animal. We seek out like-minded individuals and crave companionship. Reward loops play on that by making us feel like we belong somewhere. Game designers achieve this by implementing clans, guilds and leaderboards in their product. We can even see this outside the games themselves with the growing success of eSports. Teams built around playing games are always far more successful than individual players wanting to go pro. 

Another factor is the desire to feel a sense of achievement. The modern person faces plenty of hardships in their day-to-day life. The job market is nowhere near what it once was and the social lives of Gen Z are in jeopardy. But games offer a sense of achievement that may even bolster players’ confidences in other walks of life. The very idea that one is improving in a game they love may give them the idea that improvement is possible elsewhere. 

The Ethics of Reward Loops

The final question that some may ask is whether all of this is ethical. The answer, as is so often the case in the realm of ethics, is not as simple as a yes or no. There are certainly ethical ways to craft a reward loop. Players must first understand the rewards that they are playing for. Their motivation to acquire those rewards must be stoked in a natural way, that still allows them to retain their agency. Finally, one expects a degree of regulation within the industry crafting these loops as well. 

There are clear signs of unethical game design that is meant to exploit reward loops, rather than utilize them properly. One would be the implementation of a punishment for players who are taking breaks. Instilling a sense of FOMO is an obvious breach of ethics as well.