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 Bright colors, cartoon graphics and the ability to trade risk-free
with virtual credits are features of apps such as BUX and Kapitall,
which eschew financial lingo and complex charts in favor of
competitive head-to-head battles and motivational messages like "OMG!"
after placing a trade.
While financial trading is a niche slice of the $15 billion 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 realizing 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.
VIRTUAL POINTS
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.
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Bortot said only 5 percent 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 around 89 euro
cents or roughly 80 pence 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 35 pence or 40 euro cents per
transaction, far cheaper than online brokerage costs at bigger, more
mainstream firms.
Some were skeptical over the prospects of such firms, while others
expressed concerns over the possible trivialization 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."
(This story corrects typographical error in first paragraph; also
repeats to additional Reuters clients)
(Editing by Lionel Laurent and David Holmes)
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