One of the first things Ian talked about is his own experience implementing a game-like grading system. Even though he is decidedly against that marketer's idea of gamification I alluded to earlier, he figured he'd try two ways of making grades seem more interesting.
First, he tried making the final grade out of a million points, giving something like 50,000 for each assignment. This made the points more like what you might see in a game, but otherwise did not affect the grading system.
Second, he had everyone's grades start from perfect, but used the concept of 'health.' He had a chart of hearts such that after you lost, say, three hearts, you'd move from an A+ to an A. Lose four more and you'd be at an A-, and so on. This was an interesting experiment since, as Ian mentioned, most similar approaches have students work up from a fail as they complete coursework, similar to gaining XP.
The funny thing is that while even Ian didn't think this should work, it worked really well. The students liked these schemes a lot. He figures it has less to do with the idea of changing a grading system and more the fact that it was playful.
Turns out that playfulness is a really powerful idea that Ian was able to use in more than one context. For example, instead of giving a standard formal final exam, he had his students design a game in groups within a two hour period. It wasn't an easy challenge for them; they received new (and changing) constraints every fifteen minutes! But it made them relaxed, so Ian was able to evaluate them based on their true knowledge, not on what they could recall under stress.
I am really looking forward to trying some of the ideas in this video the next time I teach an undergraduate course. I'm also looking at James Paul Gee's (and others') ideas about applying principles of game design to education very carefully.
Have you tried applying game design principles to your grading schemes or other areas of your courses (at any level, not just undergraduate)? What went well, and what didn't?