How Is Gamification Impacting Investing In 2021?

With the gaming industry reaching almost $200 billion worldwide making it now bigger than the movie business, it’s understandable why gamification is infiltrating all kinds of sectors. And investing in stocks and shares – which during the last 12 months has seen a huge upsurge in investors, some for the first time – is one of them. Indeed, software developers are eager to capitalise on a rapidly accelerating market with an estimated 13 million people investing for the first time in 2020.

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What is gamification?

Gamification employs the functions and principles of gaming to motivate users to perform an action in a typically non-gaming environment. In recent years it has been particularly prevalent for marketing purposes to build brand identity. With Forbes reporting that 80% of smartphone users play games of some kind on their mobile devices, it’s clear why incorporating gaming functions and goal-orientated tasks in other consumer environments is a potent tactic.

For example, Fitocracy uses gamification to help users get motivated to exercise. Fitness goals are set based on the targets of the user, with health data used to customise workout routines and diet plans. Game principles are exampled by the app rewarding users for their successes in the form of badges and points. There are also league tables which put users up against each other.

How is gamification changing the way we invest?

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Gamification of investing has become increasingly apparent in the last 12 months thanks to the rise of Robinhood. Founded in 2013 and now inspiring a number of imitators, the game-like phone app has brought trading to a growing number of people who wouldn’t have ordinarily been able to get their head around the stock market. In other words, gamification has made what was once the preserve of a wealthy minority the playing field of a much larger, and in many cases, novice customer base.

Robinhood has proven successful by attracting a younger, less experienced trader to the world of investing, namely Millennials, alongside the ability to easily access commission-free trading on the stock market. Described as one of the best stock trading apps in 2021, Robinhood is the market leader in the US with over 10 million users. Its popularity has been boosted by allowing users to buy part shares (such as in Amazon) as well as invest and trade ETFs, options, and cryptocurrencies.

Gamification has seen the experience transformed in the smartphone era with confetti animations congratulating traders, and the opportunity to earn pieces of big-money shares (like Apple) for completing tasks like inviting friends. Emphasis on social interaction has also inspired a trend on TikTok with successful traders showcasing their trades via videos alongside the hashtag #robinhoodstocks.

Its growth has seen competitors like the Chinese-based Webull and Acorn join the market following Robinhood’s model. They are each examples of how gamification is disrupting the way people are investing, growing their wealth in diverse ways. Increased engagement also coincides with the way gamification helps investors interact with products unlike the use of credit cards or deposit accounts. The thrill of, for example, being able to invest in favoured brands such as Apple, is an attractive carrot to dangle.

What the future promises

Last year was huge for gamification and the investment market is growing as a result. Described in an Ernst & Young analysis as potentially being invaluable to educating investors, and championed by wealth and asset managers, such platforms as Robinhood, which acquired a whopping 3 million new accounts in the first quarter of 2020, are leading the way. Alongside the popularisation of investing in the digital-first era, underlined by eToro revealing it saw over $1 trillion worth of trades made on its platform in the previous 12 months, gamification is expected to play a significant role in the way people interact with investment markets in the coming years.

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