One question that is often left unanswered but is often key to the success of a proprietary trading firm and its skilled team of funded traders is the question of motivation; what makes someone interested in trading stocks and shares?
For some people, particularly during a boom period for the market, the answer is purely a matter of monetary gain, but for others, inspiration can come from a variety of different sources.
Some were inspired by literature such as Liar’s Poker, others by films such as Wall Street, and others still by the fascinating stories of people who made a huge success of themselves and the mountains they climbed to reach the summit.
However, some people were inspired by more interactive forms of entertainment, such as board games and computer games, and to a degree modern simulations and evaluation tools are a realistic evolution of these games, more accurately replicating real-world situations and seeing how people react to them.
During several boom periods for the market, but particularly from the late 1970s until the early 1990s, there was a trend in making computer games based on the stock market, its peak coinciding with the rather famous financial peaks of the era.
How did finance and entertainment coincide so closely, and why are such games so much rarer in 2023?
Understanding this helps firms and traders alike understand the roots of their motivation and can help forge the next generation of traders, as well as help us understand how much market behaviour and investment strategies have changed over the decades.
From Cardboard To Circuits
For as long as the stock market has resembled the one we are familiar with today, there have been games inspired by it.
It is difficult to truly ascertain the very first board game based on the stock market, one of the very first to unambiguously be focused on the stock market was Bulls & Bears in 1883.
With a subtitle proclaiming it to be “The Great Wall St. Game”, Bulls and Bears was a somewhat satirical take on the 1873 financial panic, a worldwide stock market crash that affected the early securities market.
The mechanics of the game, such as they are, involve investing in various stocks and commodities, and then spinning a spinner that determines whether they rise or fall and by how much.
This is, to a degree, how a lot of early stock market games work such as Stock Ticker and an early stock market expansion on property game Monopoly.
Better games, however, allow for a greater reading of the market and strategies that more greatly represent the types of strategies that traders could use, rather than effectively gambling on volatility.
Another early and very successful variant to this was Pit, a very lively trick-taking game where players yell out commodities they plan to swap without revealing what is on the cards, with the winner collecting an entire suit of a commodity.
By the 1960s, games such as Acquire and Stocks & Bonds were released by 3M as part of their sophisticated Bookshelf Series.
Stocks & Bonds was one of the most successful board games about the stock market, and whilst it also relied heavily on volatility, each stock that was part of the game would be affected by bull and bear markets in different ways, allowing for an exceptionally primitive level of risk management.
Notably, it would be the first stock market board game to be adapted for use on PLATO computer terminals in 1974 and again in 1982, but only the second computer game about the stock market.
The first, simply known as “Stock”, was a more rudimentary and random exploration of the stock market. Players invest money (with a universal one per cent brokerage fee) into stocks which go up and down entirely at random, removing the strategy and analysis that is vital to real stock trading.
However, it was an effective proof of concept and highlighted the potential computers would have for examining and interacting with the stock market. After all, Stock predates the launch of the Nasdaq by a full year.
The Stock Market Game Boom
After the release of Stock, the next decade would see a boom in the development of stock market games, some of which were outright clones of Stock, whilst others enabled more complex strategies than simply buying and selling.
The Simulated Stock Exchange Simsex in 1975 was the first stock market simulator, in that it used real stock exchange values, real companies and allowed for not only long strategies but also short sales, margin trades, stock splits, dividends and savings account investments.
After this, and with the rise of home computers such as the Commodore PET, the TRS-80 and the Apple II, many software developers looked into ways to produce entertainment software designed for the older, more discerning audiences that would be able to afford these early machines.
This interest in stock market video games lasted until 1983, when a significant contraction in the video games market caused a lot of consumers in North America to reconsider buying game consoles and home computers, consequently leading to a reduction in software made in the region.
In the 1980s, the biggest boom for stock market video games was one that coincided perfectly with the Japanese asset bubble, as much by happenstance as by design.
From 1986 until 1991, the Japanese economy reached unprecedented heights due to what turned out to be a major asset bubble. Around the same time, the computer game market centred around Japan due to the popularity of the Nintendo Famicom (also known as the NES).
This coincided with the return in popularity of the personal computer in the United States and a new generation of home computers in Europe to create a surprisingly diverse array of interactive takes on the stock market in the wake of Black Monday.
These include the likes of Corporate Raider, Inside Trader, Black Monday and Millionaire, all games that provided somewhat more nuanced explorations of the stock market and relied far more on fundamental trading skills, as well as strategies such as market making and stock splitting.
German games such as Wall$treet and Wall Street Wizard were more elaborate simulations and tests of trading knowledge, with the former even rewarding knowledgeable traders with more starting money.
However, the most successful and fascinating stock market games from around this time were the ones made in Japan, starting with “Matsumoto Tōru no Kabushiki Hisshōgaku” (Toru Matsumoto’s Stock Winning Strategy), a cross between a stock trading game and a life simulator.
The game, made for the otherwise child-focused Nintendo Famicom, challenged players to make 100 times their starting money in just two years by using fundamental analysis, buying and selling stocks, and taking part in leisure activities to have more energy to make more stocks and hunt for more information.
As well as this, IT company SOFEL produced The Money Game and its Sequel, which took a very similar approach to Toru Matsumoto’s game but emphasised the life simulator aspect by adding challenges to make enough money to move house within a certain short time frame.
By far the most famous and most unusual stock market game ever made was its sequel, The Money Game II, which was released in the United States as Wall Street Kid.
The game, inspired by the book Brewster’s Millions, tells the story of an unnamed trader, who in order to claim a ludicrously large fortune from a distant uncle must make huge amounts on the stock market, whilst keeping their health and personal life in check at the same time.
The game is a relatively simplified take on the stock market, only requiring somewhat cursory fundamental analysis and keeping an eye on newspapers to see if a certain stock is set to rise and fall.
However, the tight time limits also encourage a diverse portfolio of relatively secure blue chip investments, high-risk speculations and seasonal cyclical stocks chosen at the right time.
The game received far more attention than any other stock market game before or since, in part because it was released on what was the world’s most popular games console of the era, and because of its unusual premise compared to more child-focused action games.
The Stock Market Game Bust
In 1990, the Nikkei 225 peaked at 38,921, losing over 43 per cent of its value in a year, creating a precipitous market collapse often known as the Lost Decades. This, in combination with a more widespread recession in the early 1990s, led to the downfall of the stock market game.
Whilst there was a buzzing excitement for the stock market in the 1980s and a belief that making the right moves could create a nest egg that would set people for life, the stock market crash made non-investors realise what experts already knew; trading is complex and difficult.
As well as this, despite the outlandish settings of games like Wall Street Kid, the stock market was not immediate, making games based on it less appealing to children, whilst adults looked towards other forms of business simulation for a more broad entertaining experience.
Finally, with the rise of the internet, stock market simulations were far more accessible, and many people who would have played a stock market game instead played a simulation of the real markets or even started trading themselves.
Whilst games such as Railroad Tycoon and Capitalism have stock market mechanics to more general business management gameplay, and games in other genres such as Grand Theft Auto V and Animal Crossing’s “Stalk Market” offer simplified market mechanics, they were no longer the core focus of a game.
Ultimately, the stock market game reflects a fascinating era when the potential for stock trading became apparent to a lot of people, and gave them the chance to try it by simplifying some aspects and explaining the rest.
Some people who are successful traders today may have first sharpened their skills by playing games like Wall Street Kid, and for that, they hold an important place in history.