Saturday 20 January 2018

From Angry Birds to bear markets - how financial world is trying to lure gamers to global trading

Gaming meets high finance for Grand Theft Auto generation
Gaming meets high finance for Grand Theft Auto generation

Sudip Kar-Gupta

Twenty-something consumers raised on video games such as Grand Theft Auto and Angry Birds are being wooed by financial trading apps, keen to build bridges with a post-crisis generation that is uninterested in financial services or plain mistrustful.

Bright colours, cartoon graphics and the ability to trade risk-free with virtual credits are features of apps such as BUX and Kapitall, which ditch the financial lingo and complex charts in favour of competitive head-to-head battles and motivational messages like "OMG!" after placing a trade.

While financial trading is a niche slice of the $15bn mobile gaming industry, dominated by brands such as King Digital Entertainment's Candy Crush, some two-thirds of UK retail traders already use their smartphone or computer to buy or sell and app makers are sensing an opportunity.

"Developers are realising that games are played by all kinds of people with different desires and motivations, and the same kind of person who is hooked on a computer video game may seek a similar thrill from the stock market," said Kam Star, founder and managing director at games development studio PlayGen.

Nick Bortot, a former executive at online broker Binckbank, set up BUX (getbux.com) last year in Amsterdam and London. BUX's launch followed that of similar firms Kapitall and invstr (invstr.com).

Both BUX and Kapitall offer players the chance to play games such as challenging each other on how stocks might perform, but they also offer players the opportunity to go from playing for points to betting actual money.

"I got hooked on BUX instantly, playing for fun, and trying to understand how shares and markets work. Since mid-December, I have been trading with real money," said Nathaniel Brooks, a 28-year-old manager and PlayStation aficionado.

All three companies hope their bright graphics and games can lure a younger audience to the sometimes arcane world of finance, the least trusted industry in the world according to a 2014 survey by communications company Edelman.

By contrast, technology is the most trusted.

For now, invstr is only focusing on games that allow people to predict where markets may go for virtual points, and on building up a community of users, but the company may also let people bet real money at a later stage.

Bortot said only 5pc of BUX users converted from virtual play to real money, but there were still ways for BUX to make money from mere players.

He said the company would charge small add-on fees of less than a euro -around 89 cents - to top up a "funBUX" virtual account, or to follow top traders on the internet.

For those converting from play money to real, BUX would then charge small commissions of around 40 euro cents per transaction, far cheaper than online brokerage costs at bigger, more mainstream firms.

Some were sceptical over the prospects of such firms, while others expressed concerns over the possible trivialisation of trading on financial markets.

"We are aware that the two markets are converging, but we are keeping our financial trading and gambling parts quite separate," said Shai Heffetz, managing director at InterTrader, which is owned by gambling company BWin.Party.

Nevertheless, technology analyst Susan Anthony at brokerage Mirabaud Securities said the business could be worth exploring.

"Whether or not these things become killer apps is hard to predict, but I can certainly see how they might become quite addictive for some." (Reuters)

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