Professor Kimberly Hogg gives us an insight of Moodle Competency Usage.
As it is explained in PPT formative evaluation is very important in checking competency or skill. Moodle has fantastic quiz question items for that.
If you are teaching code Coderunner is a good formative question type.
It will be great, if you can connect virtual world opensim with your Moodle quiz. It will be the ultimate gamification.