What exactly is gamification? Wikipedia says it’s the use of game design techniques and mechanics to solve problems and engage audiences.  Typically gamification applies to non-game applications and processes in order to encourage people to adopt them. Long story short, it’s an integration of game dynamics to make boring things (like work and exercise) more fun, engaging and interactive.

“The reason why gamification is so hot is that most people’s jobs are really freaking boring,” explained Gabe Zichermann, organizer of last month’s “Gamification Summit” conference.

Speaking of exercise, there’s this interesting gamification trend going on right now called Fitocracy. It’s founded by two nerds-turned health nuts Dick Talens and Brian Wang. It allows you to surpass fitness goals by turning exercise into a game. You can earn points for your workouts, unlock achievements, and tackle special challenges to push yourself forward. The company believes that treating fitness like a game makes the goals more attainable. It’s a brilliant idea considering there’s a good deal of people out there who can’t bring themselves to exercise.

Big brand gamification

Pepsi and The X Factor are also embracing gamification by creating a social network called Pepsi Sound Off, and The Pepsi Pulse, web site that shows off tweets that mention the show in real-time. The latter was created first, and the former came as a convenient tool to allow X Factor fans to connect with each other on the web and see what others are talking about on Pepsi’s own social network without disrupting Facebook and twitter traffic to the annoyance of non-fans.

According to The Wall Street Journal, more and more companies are using video game elements in the workplace to engage employees. Known as “game IT” or “enterprise gamification,” companies are using various competition and reward components, similar to those found in games, to inject some fun into otherwise mundane tasks, like data entry. By issuing points, badges and tracking progress on leaderboards, staff members are motivated to work harder and engage in friendly competition.  Some companies create their games while others hire outside developers such as Bunchball and Badgeville.

“Leaders are beginning to understand the enormous opportunities that games hold for businesses, brands and people, ” said Judah Schiller, chief executive officer and co-founder of Saatchi & Saatchi S, a brand development agency that conducted a survey on the topic earlier this year. “Games, challenges and the notion of weaving fun and play into the fabric of society are tantamount to a renaissance. Well-designed games have the potential to create dynamic, rich and deeply enjoyable experiences that can foster innovation, reinforce positive behavior and increase engagement.”

The evolution of gamification: technology’s at the heart of it all

Gamification is not an entirely new idea. It has been subliminally used by advertisers and politicians for a long time to manipulate people. See, people didn’t realize that operating a farm can be fun until Zynga created FarmVille. Businesses sure have successfully implemented gamification principles in reducing travel expenses, improving cashier checkouts and in the string of similar goals.

 “I think it’s probably more like 75% to 25%, psychology to technology,” Zichermann goes on to explain.  “Although the psychology is important to application design, applications are also becoming easier to deliver because of the availability of technologies like the Facebook social graph and enterprise social networks as the means of spreading recognition for online achievement,” he said. Also, application designers can build on gamification platforms from startups like Badgeville, Big Door, and Bunchball.

It’s expected that by 2014, 70 percent of large companies will be utilizing gaming strategies for at least one business process, says Gartner.  Gaming software, marketing and consulting is also expected to hit $938 million by then, up by a hundred million from today, says M2 research firm.