Can Games About Finance Be Fun?
Try developing a game to make learning about finance fun. Well we did, and I can assure you it’s not all fun and games! But after learning and using the technique described in Eric Ries’ book, “Lean Startup,” there is no better way to do it than with Lean methodologies. The Lean Startup is a method for developing products that subscribes to the idea that entrepreneurs are everywhere and that customer feedback is integral to the product development process. The team must constantly ask itself whether they should Park the idea, Pivot on the idea or Persevere. Fidelity Lab’s new game, Beat the Benchmark, went through many Pivots before uncovering what we are calling production release V.01, and we hope to persevere from here.
This is a story of how we came to compare mutual funds to sushi. I know that sounds a little fishy. Last year we started building a game in Fidelity Labs to engage college students. It was a simple game where the students chose stocks to “buy” and at the end of the day we used closing market prices to calculate the gain or loss on their portfolio of stocks, created a leaderboard and provided a forum for the students to chat about the game. That went pretty well. We let them play the game typically for about two weeks, and the person with the highest portfolio value won the game. It was very simple. We know that they liked the game because they talked about it on the message boards.
Then, we started to uncover some problems.
At the start of the game, we gave each player 50,000 virtual dollars – an amount of money well beyond what most young people have to invest. The money inspired them to take more risk to try to win the game. A few of the players bought penny stocks that could go up or down two, three or four hundred percent in a day. If those players got lucky, they shot to the top of the leaderboard. Then the other players felt they needed to take the same risks to try to catch them. If they weren’t as lucky with their aggressive stock picks, they fell far behind and lost interest in continuing to play the game. This wasn’t the behavior we wanted.
We knew we had to fix this.
1. The game had to be more about long-term investing.
2. More about investing and less about gambling
3. More about strategy and less about luck
My colleague Joe Regan came up with a variation on the idea. He called it “30 years in 30 days.” Every day was a year in the player’s life. I knew I could sell that on an elevator. Instead of starting with $50,000 in virtual money up front, we gave each player $1,000 the first day, $2,000 the second day, $3,000 the third day and so on, until on the 30th day they got $30,000 to invest. This was supposed to simulate the ability to invest more into the market as one gets older. We also knew the game couldn’t be just about stocks, so we created 47 mutual funds based on Morningstar categories that track the broad universe of investment categories. We let the players pick those instead of stocks.
We tested “30 years and 30 days” quite a few times and we got a good response from some fairly knowledgeable investors. Then, we began testing the concepts with students. We soon realized they didn’t know what a mutual fund was or why they should invest in one. A few even thought the S&P 500 was the name of another player in the game.
As we tried explaining what a mutual fund is, we realized that in many cases they didn’t know what a stock or bond is. This presented a problem, naturally. We started out thinking we would teach them about diversification and risk vs. reward, but we actually had to go back to square one. We needed to first teach them the difference between a stock and a bond. We’d have to pivot again.
Education is key
Education had to be at the center of what we wanted to do. We had the opportunity to create something more than a game, something we began calling a learning machine. We learn from the players, they learn from us. We felt that with this game we could begin at square one of investing knowledge.
When we started to develop education materials for the game we knew we couldn’t just write a paragraph explaining what a mutual fund is. We knew we needed something better. We landed on metaphoric animations using bi-sensory learning. This was a way to engage the students in a way they could relate to, and it was fun for us. The content writer came up with a concept: “How is a mutual fund like sushi?” Our hypothesis was that we could teach a younger, financially disengaged demographic about finance if we took a new approach.
Beat the Benchmark
We decided it was best to design a game for novice investors. So we stripped the game down to the core features, and dropped the 30-year concept. We knew one of the drivers that made the game interesting to the students was doing better than others in the game. So how about doing better than the market? We thought that was an opportunity to teach them about a core concept in investing, one that a lot of portfolio managers are measured by – beating an index such as the S&P 500. A simple game of trying to put together a mix of stocks and bonds that could outperform the Benchmark in random, historic markets became our goal. We called it “Beat the Benchmark.” We kept the good parts, such as the education materials we developed, and dropped what didn’t work.
Building, Measuring and Learning
In the end, I think we changed more than we created, if that’s possible. But it was all driven by customer co-development. Nothing in the game is there that wasn’t in direct reaction to something someone asked for or told us they wanted.
I’m asking you now to tell us what you want. Be a part of the product. If you tell us, we will listen. This is just the beginning.