When the audience engages with the elements of an experience, the actual experience begins to dynamically unfold. The audience interprets the elements, revealing future possibilities, and the experience of those possibilities builds and releases tension over time, creating engagement.

Interpretation is the process of the audience perceiving the elements of the experience, then creating schemas and models of the nature of the experience based on their interpretation (whether correct or incorrect).

The audience interprets the elements of an experience through signifiers. A signifier is an individual element or set of elements whose presence or occurrence indicates the probable presence or occurrence of something else. For example, a signifier might be a large red button, a loud alarm, a skull-and-crossbones sign, a line of dialog from a character, or an item conspicuously placed. Multiple signifiers form patterns that can lead to an understanding (or misunderstanding) of what a signifier means.

Every signifier has characteristics related to the meaning of that signifier:
  • Specificity: How generalized or abstract the signifier is versus how specific or representational it is.
  • Prominence: How noticeable and direct this particular signifier is, from very blunt to extremely subtle.
  • Context: The adjacent signifiers (in space or time) that create the context for this particular signifier.
Carefully crafting effective signifiers is one of the core skills of all designers.

Models and Schemas
A schema organizes and categorizes the patterns formed by signifiers and the relationships between them.
The collection of all the schemas a person has about something is their mental/conceptual model of that thing. For example, a simple schema might be that red things are dangerous and green things are helpful (formed from a pattern of signifiers that reinforced this understanding of the meaning of red and green things). This would normally lead someone to expect that touching something red would cause damage or have other negative effects.

When presented with new signifiers, a person will usually assimilate those new signifiers into their existing schemas if at all possible, attempting to maintain the model they have. While this is usually the correct thing to do, if can lead to incorrect schemas and an inaccurate model if the signifiers are not consistent with the person's existing schemas. Signifiers that contradict existing schema (i.e., touching something red and no damage is done) must be accommodated by altering existing schema (or creating new schemas) if the model is to remain accurate. This won't always happen correctly or easily, as it can be difficult to change highly ingrained schemas. In particular, a person's disposition and capabilities will determine what schemas they already have and how they will either assimilate, accommodate, or ignore new information. The model a person has of the observed signifiers (even if incorrect) creates expectations for future events or leads to actions in pursuit of a goal.

An experience has a set of unfolding possible events and goals, which depend on the interpretation of the audience. All of the possible events and goals of an experience are called a possibility space, although in practice we are only concerned with the possibilities that are meaningful to the audience.

Feedback Loops
The elements, signifiers, models, and possibilities form a feedback loop that repeats throughout the experience. Elements generate signifiers; signifiers are perceived, then interpreted through the model (causing the model to be updated through assimilation or accommodation); the updated model opens up new possibilities.

In a non-interactive experience, this loop repeats automatically as the creator has already chosen for the audience among the possibilities, which leads to new elements being perceived. In an interactive experience, the loop repeats when the audience chooses one of the possibilities (i.e., takes an action) instead. Most interactive experiences also have non-interactive elements, so there will be many times the loop repeats automatically even in interactive experiences.

In an interactive experience, possible actions for a particular audience member, based on their capabilities, are called affordances. Signifiers, whether inherent in the elements or deliberately crafted by a designer, allow the audience to perceive affordances and incorporate them into schemas and models. In an interactive experience, it is critical that the audience's model of possible actions is updated correctly, as the experience often will not be able to progress if signifiers are misleading or if new capabilities are not obtained during the experience itself.

The measure of how well designed a possibility space is called elegance. This is the ratio of how much meaningful depth the experience has (the weighted "sum" of all the meaningful possibilities) to how complex the mental model of the audience must be to perceive that depth. An experience can have a lot of depth by having a small number of very meaningful possibilities, or a large number of less meaningful possibilities. Complexity can also be thought of as the amount of cognitive load on the audience; if the audience starts losing track of characters in a narrative or can't remember all the different abilities they have in a game, the cognitive load (complexity) is too high.

Elegance = Depth / Complexity

While an exact number for elegance can never be perfectly defined, an elegance ratio near one (depth and complexity are roughly the same) is what most experiences are; not bad, but not particularly elegant, although it could still be engaging. A ratio well below one is generally a broken, jarring experience and is not likely to be engaging. A ratio well above one is the mark of a well designed experience; relatively easy to engage with while still having lots of depth.

This means the goal of the designer of an experience is to increase depth (the meaningful possibilities perceived) and decrease complexity (of the audience's model of the experience). Of course, increasing depth usually requires an increase in complexity, so the goal becomes to get the most depth possible out of any increase in complexity (or to lose the least depth from any decrease in complexity).

The depth vs. complexity trade-off is the fundamental conflict at the heart of every design decision.

As the audience moves from possibility to possibility, traversing the possibility space, tension builds and releases over and over (assuming the experience is constructed well). The pattern of this build and release could be dictated by a writer or director (in a completely directed experience), guided by a designer (in an interactive experience), or controlled by the audience (in an undirected experience). When done properly, tension drives the engagement of an experience.

In order to have tension, there must be an expectation of future possibilities, including events, rewards, punishments, insights, conflicts, etc., and these possibilities must be meaningful to the audience. These meaningful possibilities are called "stakes" and can be positive or negative. Positive stakes are rewards, very broadly defined. This could be the gain of something good, such as money, items, skill, fame, a narrative pay-off or resolution, discovery of something new, etc. (positive reinforcement). Negative stakes are punishments, also very broadly defined. This could be a loss of time, money, items, social status, etc., or could be an undesired narrative outcome, injury, or even death. Of course, the point of negative stakes is often the "reward" of avoiding them (negative reinforcement). The higher the stakes, the higher the tension.

Note that you must be careful not to overuse punishments for creating tension, as that can easily create bad tension as the audience becomes sensitized and the stakes become too high. Also remember that using the same stakes, even if they are positive, over and over can cause the audience to become habituated (making the stakes mean less and less). Even positive stakes will need to be changed or increased to keep them interesting and effective.

Stakes alone, however, are not enough. In order to have good tension, there must also be anticipation. Anticipated rewards or punishments (or the possibility of both) can create good tension, while rewards or punishments without anticipation usually create bad tension. Even if a reward or punishment is a "surprise", if done correctly there will still be anticipation (even if it is very brief). A loot drop that randomly happens to be a legendary item still has the initial anticipation of "if I kill this enemy, I will get loot", the next step of "when I click on the body, I will see what the loot is", and the final step of "it's a legendary item! What are its stats and abilities?". A game in which a hidden sniper kills you still has the initial anticipation of "that sounds like a sniper shot", the next step of "I better get under cover", and the final step of "I've been hit, and I'm dead". If there is not even a short build-up of anticipation, there will be little to no good tension and the reward will fall flat or the punishment will be frustrating.

Tension = Stakes + Anticipation
This simple "equation" shows the relationship between stakes and anticipation. 
Building tension over time can be done by either increasing the anticipation (the reward/punishment is getting closer, the odds of getting the reward/avoiding the punishment are getting higher) or by increasing the stakes (the reward/punishment is increasing or is revealed to be larger than originally thought), or both. If tension increases very quickly, it will create excitement (for positive stakes) and/or fear (for negative stakes), and will generally result in a higher level of tension. If tension builds slowly, it won't be as exciting, but it can last longer and therefore keep engagement going longer. In general, a good experience will mix slowly building tension with quick spikes in tension to get a good mix of both, with the slowly building tension being the base that the quick spikes build upon.

The chart above shows an example of tension building and releasing multiple times over the course of an experience, with the peaks gradually rising to a finale. The slightly higher spike at the beginning is done to start the experience off strongly, and the lower peak at the end is done to give the audience a chance to process and appreciate the finale that just occurred. Engagement curves are driven by tension and have a similar shape.

Properly building and releasing tension is the key to making an engaging experience.