Scene from Halo 4 (343 Industries / Microsoft)
What do video games have to do with the stock market?
My honest answer for that question is “Nothing.”
But we'll get to that in a second.
Let’s start by exploring a few genres of video games.
"For a brick he flew pretty good"
When you think about video games in general, the first thing that comes to mind is probably either "Call of Duty" or "Halo." Both of those titles are very popular first person shooter games. "Call of Duty: Black Ops II
is currently selling at #2 in Video Games
on Amazon as of the date of this publication, and "Halo 4
" is right behind at #3.
Shooter games like the "COD" empire and "Halo 4
and "Battlefield 3
are controversial because many people feel that they endorse violence and hostility. And they might have a point, because shooter games focus on destruction. But not all video games are shooter games. It just happens to be the most well-known genre.
"You will be the protectors of earth and all her colonies"
There is another genre of video games that is based on building instead of destroying. These are called simulation games. This is where you will find "Sim City" or "The Sims." This is also where you find the subcategory of Business Simulation Games
The idea behind a Business Simulation Game
is that the player is in charge of running a business. Some of these simulations involve taking charge of a large corporation. And when there is a large corporation involved, there must be a stock market to go with it.
So you can find a stock market simulation inside a video game.
Why is this a big deal?
"Don't you know? Spartans never die."
It’s a big deal because just reading about business and investing isn’t enough.
Sometimes you need to be able to learn through experience
, and simulations give you the opportunity to learn through experience without worrying about being wrong. In fact, this is one of the major reasons why SprinkleBit exists: the trading simulation gives you a chance to test out your investing strategy.
Learn to invest in our virtual stock market by joining SprinkleBit for free, today!
"Wake up buttercup!"
There is another side to simulation games. In his talk “Achieving Your Childhood Dreams,” the late Randy Pausch called it the “head fake.” What he meant by this is that you can learn almost anything by tricking yourself into thinking that it’s just entertainment.
[youtube id="ji5_MqicxSo" width="600" height="350"]
Business Simulation Games provide the best of both. They are more fun than reading, and they are often very close to the real thing.
"I think we're just getting started."
"I choose you, SprinkleBit!"
If what you are learning also happens to be useful, then there is a huge social value in video games. For example, Nolan Bushnell, The founder of Atari, says that if "Pokemon" was based on real biology, then thousands of children would be experts on the subject without ever needing a biology class. "Pokemon" fanatics would probably agree.
Entertainment and experience is a powerful educational combination.
Which brings me to my point.
Business Simulation Games
provide the best of both. They are more fun than reading, and they are often very close to the real thing.
How close? Here’s a personal example:
When I was 8 or 9 (or 10, I can’t really remember), I started playing RailRoad Tycoon
. The whole purpose of the game was to manage a railroad in an economy simulated to match the 1800s.
To me, the most fascinating part of the game was the virtual stock market. In that virtual stock market, there were three things that I learned very quickly:
- Never borrow money to buy stock. That is a good way to go broke.
- The company’s stock performance will always track the business performance over the long term. If the business does well, then the stock will eventually follow.
- Unless you are the company’s manager, then you have no control over the business performance, and therefore no control over the stock performance.
But since this was a game, there was no consequence for going broke. If I lost all of my money, all I had to do was type in “BAILOUT” and the government would save me! (This feature turned out to be more realistic than I assumed at the time!)
I was also the company’s manager, so I could play with my stock returns as well. Sometimes the company’s performance far outpaced the stock performance, leading to the odd situation where the company was holding more cash than its market value (this is called a “net-net” and it is impossible to find).
Somehow I figured out that I could use the company’s money to “buy back” the company’s stock, and buying a dollar for less than a dollar seemed like a good idea.
When I did this to buy back all of the company’s stock, the stock price exploded by more than 800,000% (that’s eight hundred thousand
percent). I became a billionaire and they gave me a raise. (see the image below...it's true!)
A screenshot of how I was able to make huge profits in the middle of a Depression! Photo Credit: Andrew Wagner
So that’s how you make a fortune in the video game stock market.
Now to be fair, I played within the rules of the game (I didn’t use the BAILOUT cheat), but some of what I did is probably illegal in the real world.
So while the method I used may not translate into the real world, the lessons learned should not be so quickly cast aside.
You can’t get that kind of experience in books.
Join me and learn to invest by joining SprinkleBit for free, today!
Credits: Quotes are from "Halo" series of video games.