Wall Street has been compared to a casino for a long time. In the wake of Robinhood’s recent IPO filing, the analogy is more relevant than ever.
Casinos are powerful because they make consumers feel like they’re playing a game with their money. Ambient lighting, enticing sounds, and other sensory cues entice players to spend their hard-earned money at the casino’s slot machines.
It’s hard to believe that Robinhood’s beautiful and easy-to-use software is anything other than a thrill-inducing video game. Red and green are mood-enhancing colours, with green evoking feelings of peace and serenity and red evoking feelings of rage and other unpleasant emotions. Stock selection may resemble a game of scratching off the winning ticket in the lottery; after novice investors make their first three investments, confetti falls from the top of the screen in celebration.
When it comes to stock and bond trading, much like gambling, you might lose a lot of money. In fact, a Robinhood customer committed suicide last year because he thought he had lost US750,000 in stock and bond trades.
I do research on how players interact with virtual environments and create educational games for the classroom. A health app that combines rankings and prizes to motivate users to walk more or eat better may be an effective way to employ game-like elements to influence real-life behaviour. Gamification, on the other hand, has a dark side, and it may drive individuals to forget about the implications of their actions in the real world.
How video games work
As a rule, games are voluntary activities that are controlled by rules and include participants striving to conquer tasks that carry no danger outside of their virtual environment.
Because games push the mind to learn new things and are typically secure places to confront and overcome failure, they are enthralling to many people.
Religious rituals and “flow states” may likewise be mimicked in video games to induce players into a heightened sense of self-awareness. “Just one more turn” thinking may persist for hours, and players forget to eat and sleep. This sensory combination of flow and mastery is what makes games exciting and occasionally addictive. Players who can’t remember what they ate for breakfast decades ago are able to relive the experience in vivid detail.
Visual and aural feedback is more prevalent in video games than in traditional board games because they reward players with colour, movement, and sound to keep them engaged.
Angry birds have more power
Game play’s psychological effects may be capitalised on for profit as well.
It’s very uncommon for gamers to have the option of spending real money for in-game products like new and angrier birds or character skins in games like Fortnite that are free-to-play. Even while most people avoid paying money, a tiny percentage of avid gamers spend hundreds on a free game.
For video game developers and publishers alike, the “free-to-play” concept has become more popular.
“Massively multiplayer online role-playing games” like Final Fantasy XIV also use fundamental game play cycles. It’s the fundamental set of behaviours a player will take out while playing that encourages continual play to keep people playing and paying, such as hopping in Super Mario Brothers or repeatedly upgrading weaponry in the Borderlands series. A tiny percentage of individuals may get addicted to the game to the point that it negatively impacts their mental health.
A step further, though, is the use of game components to influence real-world behaviour, which is known as gamification.
A excellent use of gamification
To ‘gamify,’ one applies gamelike features to non-gaming situations. Badges, points, ranks, and progress bars are common visual motivators for gamers.
Gamification may be used for a wide range of purposes, from improving one’s health and grades to building savings accounts and solving big scientific challenges. Volunteering, commenting on legislation, or visiting the government’s website are all examples of genuine civic activity that may be exchanged for financial prizes in certain programmes.
For example, an extrinsic motivator like a student who despises mathematics but needs an A in order to graduate is the driving force behind all three of these examples. If a player feels challenged and rewarded, they are intrinsically motivated. In order to take advantage of this, video games capitalise on the desire to win and reward players.
Bad behaviour may be made fun using gamification.
Even if extrinsic incentive is a useful tool for encouraging individuals to lose weight, it may also be used to hide the complexities of stock and other financial instruments behind a pleasant, game-like setting.
People who are just starting out in the stock market might use Robinhood’s app as a fun way to get them excited about investing. There are emoticons, confetti alerts, digital confetti and backslapping affirmation emails aplenty in Robinhood’s user-friendly design. “Game play loop” provides sensory input while making stock trading simple.
To see for myself, I made a free account
It all starts with a free stock that Robinhood hands out to new members, who may choose from three face-down golden cards. The gold tint adds a touch of opulence and creates the appearance of a casino-like selection.
After selecting a card, customers really “scratch” it like a lottery ticket and the stock is disclosed with an affirmative congrats and confetti. Colors and gamified images, such as gift boxes, can keep users coming back for more.
Robinhood develops participants rather than investors by satisfying its users. Even if they’re specialists who spend hours and days analysing businesses and deals, they might still lose a lot of money via speculative investment.
It’s not only Robinhood that employs some of these game-like elements in financial apps. Apps like Acorns and the Long Game, in contrast to Robinhood, encourage its users to save their money instead of spending them.
A good game may make studying more enjoyable.
In my personal research, I’ve discovered that games are mostly favourable psychological instruments for player engagement and decision-making.
In the real world, games may be used to improve health, advance education, and even save money. However, I don’t think one of them is just encouraging someone with no prior investment expertise to purchase and sell stocks.
As it gets ready to go public, Robinhood may want to reevaluate how it communicates with its consumers. A reward for attending an investing education class instead of celebrating a transaction would be more appropriate.
Learning and having fun go hand in hand, as any smart game designer understands, which is why the finest games include both of these elements into their design.