The GNS Theory, as originally developed by Ron Edwards, is a relatively amorphous body of work attempting to create a theory of how role-playing games work. Primarily, GNS Theory holds that participants in role-playing games reinforce each other's behaviour towards ends which can be divided into three categories: Gamist, Narrativist and Simulationist.
Strictly, GNS theory is concerned with players' social interactions, but it has been extrapolated to direct game design, both in and outside the world of RPGs. A game can be classified according to how strongly it encourages or facilitates players reinforcing behaviours matching each category. Game designers find it useful because it can be used to explain why players play certain games.
Ron Edwards later discarded GNS Theory in favor of The Big Model, which includes the GNS categories as different kinds of creative agenda.
Read more about GNS Theory: Potential Frictions Between Modes, Other Terms, History
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