Last week, I started a journey along with millions of other people.
I’ve never met these people. But we’re all driven by a common goal: to learn a new language. And we’re doing it on Duolingo.
When I downloaded the Duolingo app to refresh my Arabic language skills, I had an idea of what to expect. I have friends who use the app. So I knew about the cheerful (and psychologically satisfying) noises the app emits when you translate something correctly. I’d heard about the app’s aggressive notification system that constantly pressures users to practice daily. (The company even embraces its pushy reputation.) And I’d seen the hilarious “Saturday Night Live” parody of Duolingo for talking to children. But I didn’t realize how large of a community I was joining.
Duolingo has more than 500 million registered users, 37 million of whom are active at least once a month. And despite the fact that only 3% of its users are paying users, its revenue has grown every year since 2016. It generated $250 million in revenue last year. And it’s currently worth more than $3 billion.
The Duolingo brand is clearly speaking to people. But it’s not just the adorable owl mascot that’s bringing people in. (Though if memes are any indication, he’s a pretty big deal.) It’s the gamification of language learning.
Changing the Game
Gamification is exactly what it sounds like: the process of adding games or game-like elements to a task to encourage participation. It takes an activity — usually a difficult or monotonous one — and makes it more fun. By breaking a big task down into smaller parts, gamification triggers the parts of our brains that crave instant gratification and gives it to us. And it rewards us for our accomplishments.
That’s why Duolingo’s gamification of language learning has attracted so many users. Learning a language as an adult is notoriously difficult. Anything that makes that process easier — and more fun — is a game changer (pun intended).
And language learning isn’t the only space where gamification is having an impact. YuLife, a U.K. insurance startup, is trying to disrupt the insurance industry through gamification. YuLife founder Sammy Rubin said, “Our mission is to inspire people to live their best lives, and we’ve always felt that insurance was just focusing on the claims when people die.”
So to that end, the company’s app tracks and rewards users for healthy behavior, like meditating or going for a walk. Users receive “YuCoins” for these kinds of acts, which they can then exchange for airline miles or Amazon purchases.
Then there’s Choreful, a Norwegian app that turns chores into a competition. Choreful founder Robin Havre originally created the app as a joke to see who did the most chores in his household. But the app took off after he shared it to TikTok, where it struck a chord with infuriated women who were exhausted by their attempts to fairly share the burden of household chores with their domestic partners. The app has been incredibly popular in Norway, and the Android version of the app has been downloaded more than 50,000 times so far.
Education, life insurance and household labor are vastly different areas with vastly different needs. Yet gamification was effectively used in each space.
Playing the Future
Gamification is here to stay. There are 3.2 billion gamers worldwide. The video game industry was worth $178 billion in 2021 and is expected to grow to $268 billion in the next three years. The mobile gaming industry isn’t far behind, worth $98 billion in 2020. Consumer spending in mobile games reached $116 billion in 2021.
There are dozens of different game styles that startups or other companies can build on. There are puzzle games, strategy games, trivia games, racing games… and that’s before we even get into the potential of gaming in the metaverse. Through gamification, companies can mix and match elements of game play to meet their customers’ unique needs.
Gamification taps into a very basic human sense of accomplishment. We want to achieve our goals. We want to be rewarded for that. And plenty of people have a strong competitive drive. They want to play. And they want to win.
My Duolingo experience is certainly tapping into that sense of accomplishment. I’ve kept a six-day streak going and have received multiple rewards for it. The app shows me how I rank against other users and shares encouraging statistics to keep me going. And Duo the owl is quick to offer praise when I do well — which is exactly the kind of motivation I need.
I’m one of millions of people who benefit from gamification. And I think that number is only going to grow. I believe that gamification will spread to a growing number of industries in the next few years. So investors should keep an eye on gamification technology and startups that are targeting gamification solutions. They have massive upside potential.