The Smartphone Game Where In-App Purchases Are Real-World Stocks and Shares
"We think the stock market is the biggest and best game in the world."
Image: Everett Historical/Shutterstock
It was Gordon Gekko, the iconic slimeball trader in Oliver Stone's 1987 movie Wall Street, who first espoused the theory that greed is good. For a generation of high-flying bankers—giant mobile phone in one hand, stock portfolio in the other—those words became a mantra. For most of us, though, the reality of trading stocks felt utterly alien, an incomprehensible ticker tape of numbers that concerned vast corporations but had little to do with everyday life.
Yet somewhere between Black Wednesday, the dotcom bubble, subprime scandals, and billion-dollar bailouts, that once distant world of finance crashed into our reality, bringing with it financial uncertainty and global economic crises. Greed didn't look so good when viewed from street level.
"We think the stock market is the biggest and best game in the world."
Like many other games on your phone it offers in-app purchases, battle modes, and a social platform for users to chat. The only difference? You're playing with real stocks and shares. In the past, casual investment of this kind might have seemed foreign. But as recognisable brands (from Netflix, GoPro, and Facebook to Marks & Spencer) float on the stock market, BUX is hoping to capitalise on young players drawn in by the future of tech, rather than the future of stocks.
The team behind BUX says it's trying to lift the veil on the murky world of share trading. "We think the stock market is the biggest and best game in the world," Niels Vrijhoeven, BUX brand editor, tells me. "It's a game that shouldn't only be accessible to the big boy bankers; everyone should be able to play along."
But while buying low and selling high in less time than it takes to put a pound in a pub fruit machine might sound fun, you have to wonder about the short term risk and reward of investing in shares.
It might feel safe trading from your pocket in your lunch break, but with the value of online gambling in the UK alone exceeding 2.5 billion and estimates in the last nationwide Gambling Prevalence Survey showing that between one and two percent of the 35 million people who gambled in the UK had some form of addiction, could this gamification—or, as some describe it, "gamblification"— of real markets fan the flames of casual betting?
"We're very well aware of the fact that we are opening the potentially (very) risky financial markets to inexperienced people," explains Vrijhoeven. "So our customer support team monitors all trades done through BUX, with anomalies detected and acted upon. If we feel that someone is on a trading binge for example, we would contact that user and if necessary we would switch his account back to [free version] funBUX. We want our users to enjoy playing the markets just like we do and big losses don't enhance that experience."
At this point it's pertinent to point out that picking individual stocks in the way that BUX facilitates is extremely risky.
The "game" itself has two basic modes: play for free and build your portfolio with virtual money ("funBUX") or invest real money ("seriousBUX") buying shares in £10 increments. After a couple of weeks trading for free—and zero knowledge in the markets—I decided to invest some actual cash, setting myself a strict limit of £50 (around $75) to discover if I really could become a "wolf" from the comfort of my lounge.
When investing, you decide if the stock will rise or fall. If you buy low and it soars after you've predicted a rise you're onto a winner, but if it starts to crash you're going to lose money. With that in mind, I began by investing in stocks which seemed viable to rise, like silver and gold. I'd also read somewhere that Netflix was due to publish its figures and things looked good, so I threw some money that way too.
On the face of it, I was doing well. Gold was up 5 percent, Netflix was up 3 percent, and silver was on the rise too. But what became apparent fairly quickly was that trading with real money to an effective degree requires a seriously large investment.
Firstly, there's BUX's fees. At a basic level it costs 25p to buy into a company and the same when you want to close out the deal, which means from the outset you're always going to be down by 50p. Of course, that's not astronomical, especially when you're investing thousands or playing with funBUX. But if you've put £10 into shares it means they're going to have to rise at an exponential rate to get any sort of profit. Then there's the "ringed fence," which keeps you safe from yourself, holding some money back to insure you don't go so far into the red that you lose more than you've invested. It's a great safety net, but it means that for £50 transferred into the system only £45 is available to use. It's unlikely you're going to become a "wolf" with a portfolio of four companies.
So I decided my "strict limit" of £50 could go to hell, and I upped it to £100.
It was around this time that gold fell off a cliff. I'd predicted it would rise, but it fell by an astonishing 16.6 percent (that's a loss of £2.16). And while I waited for gold to regain its feet, I floundered in a series of terrible investments: Netflix bottomed out and I ended up wasting just a little more on their stock than I spend on their service every month, Tripadvisor and Volkswagen were a bust, and that rogue investment in US Oil and Goldman Sachs was a terrible mistake.
I started googling stock tips, reading up on BUX's own editorials, and came upon two winners in the unlikely pairing of Louis Vuitton and Tesco. I closed out up on the deal and it told me I was a "Master of The Universe," which made me feel slightly better about only bringing in a profit of 26p.
And with the luck of retail behind me, I decided French supermarket Carrefour would be a surefire loser, investing in a crash… but their shops in China had been showing increased profit, and my hubris cost me almost £1. I'd had enough. I considered investing more, but came to my senses after my Schlumberger stock (which I'd picked randomly because I liked the name) failed to yield anything more than an even break. It was beginning to feel like death by increments and I retired with an all-told loss of about £9.
"At BUX we hold two things very dearly: being fun and fair, and every product or feature we develop must be in accordance with both of these values." Vrijhoeven tells me. "Above all, BUX is about the fun you can have trading stocks, learning about that what makes the world go round along the way. We like to keep it enjoyable for everyone."
After my foray into the world of real investment, it's a sentiment which seems to ring true. I never felt like I was going to lose my shirt, and I had fun. But, rather worryingly, it never felt like gambling—more of an informed (or in my case uninformed) guess. When you don't know what you're doing and you're unwilling to invest thousands, maybe it's best to stay on the side of 90 percent of BUX users and stick to virtual money. Gordon Gekko might have said lunch was for wimps; but being able to afford lunch is for winners.