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A Thursday-afternoon panel at Supernova looked at the significance of games in business. Led by Dan Hunter of the Wharton School (and, of course, the Terra Nova blog, the panel also included Charles Moore of Reuters, Amy Jo Kim of Shufflebrain, Michael Zyda of the USC Gamepipe Lab, and Doug Failor of the Department of Defense’s Joint Futures Lab. Among the hot topics were blue-haired ladies and something called “the G word,” as panelists sought to explain how some of the lessons we could learn from games could be used in commercial and enterprise applications.

“I have the job that some of you and most of your kids want. I play commercial video games for a living,” Failor said. His arm of the DoD is charged with “military transformation,” and ensuring the military is effective and efficient doing their job. We do experiemntation to explore ,discover and vlidate our different ideas and our differnet theories. I am the Joint Futures Lab’s chief gamer. (He’s the only gamer there, in fact.)

Failor is interested in games because of their simulation value. “The main part of my message is that I really believe that PC simulations are going to become the killer application,” he said. In the battlefield, in the martkeplace and in life, there’s a lot of decisions that you only get to make once, but how would you like to be able to test ahead of time or have some tools that help you make choices. Simulations can help you do that.”

Charles Moore of Reuters, the biggest, oldest and best news agency in the world (okay, so I used to work there), spoke about the company’s new innovation program, which is set up more or less like a venture fund, Moore said. “We’ve spent the last three months exploring the gaming space — or rather, learning from virtual worlds. We do try and avoid the G word,” he said. “We’re all strong advocates and see a lot of opportunity, but there’s still a significant majority of people employed in the corporate world who aren’t involved in the gaming space and don’t see the same opportunities we do. My experience over the last three to four months is that senior management is very clear about the sorts of opportunities there are. There’s a younger generation entering the workplace that have very different expectation of what business applications should be like and how they should interface with large data sets. It’s easy for us to get a little bit carried away, and we have to be a bit careful about how we present a lot of those opportunities so as not to alienate a large part of the people who are going to have to implement those ideas.”

Moore’s unit is interested in the user interface of games and how the principles they use can be applied to commercial or enterprise applications, especially in terms of customaization and navigation through complex applications. Moore is also looking at training applications. “There’s a lot we can learn in terms of how gamers learn in games. Most business applications rely on pretty traditional training techniques. Collaboration and community is critical to the financial markets, and core products for us.”

Amy Jo Kim talked about her work at Shufflebrain, a design consultancy working on design strategy for games. Kim has worked on numerous MMOs, including Ultima Online, The Sims Online, Motor City Online, and There.com.

“The evolution of my work has been to go deeper and deeper into the basic mechanics of what makes games compelling and what makes them work,” she said. “I’m coming at this very much from a design point of view, not as much philosophy. I’m elbow-deep in building this stuff.”

“Games really leverage our most prevalent response cycles and schedules of reinforcement,” Kim said. “The most addictive schedule of reinforcement that exists is the one that slot machines use, a semi-random payoff, and the amount of the payoff varies. It’s impossible to predict, and it creates an addictive behavior in pigeons, rats, and blue-haired ladies pumpuing in their life savings in Las Vegas.”

Kim also mentioned the idea of “flow,” describing it as “the perfect balance between challenge and skill” — though she refused to tackle the challenge of pronouncing Mihaly Csikszentmihalyi’s name. She went on to name several “basic game mechanics,” including collecting, earning points, using feedback, exchanges (in particular social exchanges), customization.

Philip Rodesdale, CEO of Linden Lab, was asked about the significance of Second Life to business. “Second Life is a lot like the Internet, but in three dimensions,” he said. But there is something quite different between the Internet and Second Life, or virtual worlds in general, which is that things are experienced together with other people. The Internet is extremely exciting to talk about, but when you’re actually surfing the Internet, you have no sense of other people. But when you think about something like Mystery Science Theater, where people turn bad content into good content — there’s a strange thing about Second Life and about a lot of social software, where you’re taking a context and putting a bunch of people in it at the same time, and you have a sense of each other’s presence and build on each other’s knowledge.”

For those already interested in the space, the panel was a good round-up, but it remains to be seen whether it was enough of an introduction for the uninitiated businesspeople in the room.