Fascinating!
TLDR: External rewards are only effective when tasks are mechanical -- in any task requiring "rudimentary cognitive skills" performance is reduced when rewards are introduced.
Fathat, thanks for posting that video. Completely derailed the work I was doing.
I wonder what the implications would be if a game was designed more around intrinsic/self motivated rewards more than external rewards were a lot less prominent.
Perhaps if player managed to really be engaged in the in the game, they would find the experience much more personal and interesting.
As you stated, the greatest problem is
getting the player engaged.
I've been thinking a lot about this the last couple if weeks.
I'm thinking that one of the best ways to get players engaged and create intrinsic rewards is to make it a sandbox. The best example of this I can think of is Sim City -- there's no real goal to the game, and you can't win, but its a very rewarding game to play even though there aren't many explicit rewards. The main reward is just in making the city itself. The game gives feedback along the way, but not in the tacky XBox achievement sense.
I also have some friends that have been playing the Minecraft alpha, and they're totally hooked. They've created this sprawling world with an intricate subway system and fire control and aquariums and all sorts of things. They've even created maps of the world. And this is in a game that basically just lets you place and delete boxes -- that's it. It's not even really a game. It's just a medium that allows people to play. I think the cooperative aspect really helps here too.
"Sandbox" is a term that's totally overused, but I think a sandbox is the most direct route towards creating a game that's intrinsically rewarding (although certainly not the only way... just the best one I can think of right now).
Also a bit of an aside, but I think as an industry we define games too narrowly. Sim City and The Sims barely even classify as games in the traditional sense (there's no ending, or story, or levels), but they've also sold about a bajillion copies and people love them. So I think if we want to make games that are intrinsically rewarding, we might have to throw away some very basic assumptions about what a game should be.