The Gamification We Play: Whether We Realize It or Not

I will never forget my first experience with destination gaming. No, I am not talking about the famed casino in Monte Carlo or the gambling meccas of Las Vegas, Atlantic City, or Macau. No, I am recalling a visit to the cafeteria of the Ann & Hope department store at the Liberty Tree Mall in my home town of Danvers, Massachusetts, circa 1978. It was there, in the midst of employees on their break and under the haze of cigarette smoke that I discovered Space Invaders. Some of you are knowingly nodding right now, perhaps even with a smile, while others are probably already using Google to look it up. But, for many, Space Invaders, followed in fairly rapid succession by Asteroids, Missile Command, Pac Man, and my eventual favorite, Centipede ushered in what I have tongue-in-cheek described as destination gaming. Video game arcades spread like wildfire across the US in the 80s, saw a sharp decline in the 90s caused by the proliferation of home gaming systems by the likes of Sega and Nintendo, and ultimately saw a revival of sorts with brands such as Dave and Busters.

The Neon Laboratory

The reason I am walking Rational Exuberance readers down this personal memory lane of sorts is not purely nostalgic. This first generation of video arcades, built upon what the legalized gaming industry had already long been refining to a science. As any cultural anthropologist or behavioral psychologist worth their PhD will tell you, these early arcades served as perfect laboratories for the understanding of human behavior, especially of younger people who were not allowed into casinos. These same neon destinations that I think about so fondly from my teenage years were also laboratories for perfecting how to keep those quarters rolling into the game slots, how to keep you in the arcade longer, and how to get you to keep coming back over and over again. Games, and the environments they were housed in, were not only designed for artistic merit, creativity, or gameplay but also had graphics and narratives that engaged players in ways that ensured repeat business. From those primitive, innocent bygone days, we now live in a world where both game theory and "gamification" have found their way into everyday life and most legacy businesses. None of this is very surprising. We don't just like games, we love games. Yet, what might be surprising to many is just how sophisticated the science and strategy behind the gamification of human life has become.

Gamification of Gamification

The Oxford definition of gamification is as follows: the application of typical elements of game playing (e.g., point scoring, competition with others, rules of play) to other areas of activity, typically as an online marketing technique to encourage engagement with a product or service.

Some of you have already been asking, "What does this have to do with digital assets, cryptocurrencies and Rubicon?" Actually, quite a bit. One of the most recent industries to have experienced a significant trend toward gamification has been an investment and financial services. There are many dimensions where gamification of the investment industry has had positive impacts, such as driving financial literacy and encouraging systematic savings. Yet, the combination of mobile investment technology platforms and social media influence have also unleashed the negative and unwanted side effects that gamification can bring. In fact, on several occasions in 2021, the Securities and Exchange Commission has already identified gamification as one of the key areas for a proposed reform of the industry. While this regulatory vigilance was largely instigated by the emergence and success of discount brokerage trading platforms such as Robinhood, the impact of gamification can be found throughout the industry and, in the view of Rubicon Crypto, especially in the digital asset and crypto industry. Gamification has played an outsized role in the emergence of many crypto brands that lack any semblance of use case or new technological advantages. The digital nature of the industry, its engaging graphics, current FOMO climate and, of course, the omnipresence of social media have created an ideal climate in which to nurture the negative side effects of gamification in crypto. In fact, gamification is one of the primary reasons why we talk so much about having Rational Exuberance about the future potential of the industry rather than the irrational exuberance that is so often amplified by gamification and has become an unfortunate aspect of the industry.

As always, whether or not you are crossing the digital divide with Rubicon Crypto…please remember to do so with common sense and with Rational Exuberance.