What Are Serious Games?
Serious games are digital or non-digital interactive experiences designed for a primary purpose beyond mere entertainment, often focusing on education, training, or information dissemination. In finance, serious games are a valuable tool within the broader field of training and development. They leverage game mechanics and immersive scenarios to teach complex financial concepts, hone decision-making skills, and simulate real-world financial environments. Unlike traditional educational methods, serious games encourage active participation and experiential learning, allowing individuals to practice new skills in a risk-free setting.
History and Origin
The concept of using games for purposes beyond amusement can be traced back to antiquity, with early forms of strategic games serving as training for military tactics. However, the term "serious games" was formally coined by Clark C. Abt in 1970 in his book, Serious Games, where he explored their potential for educational, policy, and research applications.4 Early serious games often focused on military simulations and educational tools. In the realm of finance, their adoption grew alongside technological advancements, enabling more sophisticated simulation models for complex financial markets and products. This evolution has transformed them from simple educational aids into powerful instruments for teaching economic principles and sophisticated financial concepts.
Key Takeaways
- Serious games are interactive experiences designed for educational, training, or informational purposes beyond entertainment.
- They are widely used in finance for teaching concepts, enhancing skills, and simulating market environments.
- These games enable experiential learning by allowing users to practice in a risk-free setting.
- The applications of serious games span from improving financial literacy to advanced corporate training in areas like risk management.
Interpreting Serious Games
Serious games are interpreted based on their efficacy in achieving their specific educational or training objectives. For instance, a serious game designed to teach portfolio management would be evaluated by how well players grasp asset allocation, diversification strategies, and the impact of market dynamics. Interpretation also involves assessing whether the game effectively translates theoretical knowledge into practical skills, allowing users to apply learned concepts in realistic scenarios. The goal is to foster a deeper understanding and behavioral change, rather than just memorization.
Hypothetical Example
Consider a serious game designed to teach beginner investors about investment strategies and their associated risks. In this game, a player might start with a virtual capital of $100,000. They are presented with various investment opportunities, such as stocks, bonds, and mutual funds, alongside simulated news events impacting the virtual market.
Scenario: The player decides to invest heavily in a volatile tech stock based on a recent positive news headline, ignoring warnings about market fluctuations. After a few simulated months, the stock's value drops significantly due to a competitor's innovation, leading to a substantial loss in the player's virtual portfolio.
Learning Outcome: Through this simulated "loss," the player learns the importance of data analysis and diversification, rather than impulsive, emotionally driven trading. The game might then offer a tutorial on how to research companies thoroughly, understand market indicators, and build a balanced portfolio, allowing the player to apply these lessons in subsequent rounds. This immediate feedback in a safe environment reinforces prudent financial behaviors without real-world financial consequences.
Practical Applications
Serious games find extensive practical applications across the financial industry. They are employed by educational institutions to enhance financial planning skills among students, preparing them for personal finance challenges and professional careers. Financial institutions utilize serious games for employee development, offering realistic training in areas such as credit analysis, capital allocation, and regulatory compliance. For example, PSCU Financial Services reported using a serious games engine for their corporate training programs, citing budgetary advantages and time savings.3 Policymakers also recognize their value, with the OECD's Recommendation on Financial Literacy acknowledging that games and gamification can be instrumental in building financial competencies.2
Limitations and Criticisms
Despite their benefits, serious games have limitations. One challenge is ensuring that the simulated environment accurately reflects the complexities and unpredictability of real-world financial markets. Oversimplification can lead to a false sense of security or incomplete understanding. Additionally, the effectiveness of a serious game is heavily dependent on its design and pedagogical underpinning. Some financial literacy games, for instance, may not provide frequent or salient feedback, or may fail to define clear behavioral goals, which can limit their learning impact.1 Critiques also include the potential for "playfulness" to overshadow the "seriousness" of the learning objectives, or for the game to become dated as real-world financial products and regulations evolve. The development of high-quality, relevant, and engaging serious games can also be resource-intensive, requiring significant investment in design, content, and technology.
Serious Games vs. Gamification
While often used interchangeably, "serious games" and "gamification" are distinct concepts. Serious games are complete, self-contained games designed from the ground up with a specific non-entertainment objective. They simulate a scenario or system, requiring players to engage with inherent game mechanics (like rules, objectives, and feedback loops) to achieve the learning outcome. The "serious" purpose is embedded within the core gameplay.
In contrast, gamification involves applying game-design elements and game principles in non-game contexts to encourage engagement and motivate behavior. Examples of gamification include adding points, badges, leaderboards, or progress bars to a savings app or an online financial literacy course. The primary activity is not a game, but game-like elements are layered on top to make it more appealing or effective. Serious games are a subset of applied games, whereas gamification is a strategy to enhance existing systems.
FAQs
Q: Are serious games only digital?
A: No, serious games can be both digital and non-digital. While many modern serious games are computer-based simulation programs, board games and card games can also be designed as serious games for educational purposes.
Q: How do serious games improve financial understanding?
A: Serious games enhance financial understanding by allowing users to actively engage with financial concepts in a simulated, consequence-free environment. This experiential learning helps reinforce knowledge, develop decision-making skills, and explore the impact of choices in a way that passive learning often cannot.
Q: Can serious games be used for advanced financial training?
A: Yes, serious games are increasingly used for advanced financial training. They can simulate complex market dynamics, risk management scenarios, and behavioral economics principles, allowing professionals to refine their skills in sophisticated contexts.