The Benefits of Video Games – What Gaming Taught Me About Finance

When I was younger, I was a massive fan of video games.

PC gaming in particular was my bread and butter. From 6 years old to the end of high school, I was always interested in finding new games to master or learn.

I didn’t game every single day, and I was never allowed by my parents to play for more than 1 hour at a time when I was younger, but I still think the video games I played greatly contributed to some of the lessons I learned while growing up.

Since Christmas just passed (I’m a tad late on this post, but Merry Christmas), I figure there are a lot of parents out there who have recently debated if they should buy their child a video game for Christmas (or just in general).

If you are on the fence about if you want your child playing video games or not, I figure I would write a quick post about some of the benefits of video games I have personally experienced, as well as what some literature has to say on the matter.

This post will contain:

  • The benefits of video games – what literature says.
  • 2 Video games that taught me valuable lessons about money and technology.
  • My thoughts on the overall benefit of video games and early introductions to technology for youth.

The Benefits of Video Games – What Research Shows:

A great deal of research on video games in the past several years has focused on the possible negative effects of video games, with violent video games and gun violence worries taking center stage.

However, considering the popularity of video games and the array of genres they capture (not every video game is a first person shooter), I think the currently narrow scope of research is a bit unfortunate.

Thankfully some research is still being conducted that examines the possible benefits of video games, so I will quickly summarize the findings from some of the research articles I have found!

Note: I still have access to complete studies that have been done on the benefits or consequences of video games through my college, but I can’t link to these studies because they are not publicly available. However, I can link to the abstracts of various papers and public studies to at least provide the gist of what researchers have found.

Video Game Benefits – A Collection of Studies:

human-brain-circuits

Visuospatial Cognition Benefit & No Aggressive Tendencies:

A meta analysis by Christopher Ferguson in Psychiatric Quarterly examined ‘the good, the bad, and the ugly’ of video games and the impact they had on players. A meta analysis is a statistical analysis of a collection of other studies that relate to the question at hand, so this study used a collection of peer-reviewed articles that examined the effects of violent video games.

The general hypothesis that playing violent video games is related to higher aggression was not supported in the findings of this meta analysis.

However, violent video game playing was actually associated with higher visuospatial cognition, and this finding is in line with other research that suggests non-games who start playing video games can see improvement in mental rotation performance.

Pretty neat, but what else is there?

Video Games and Improvement in Health Related Outcomes:

As technology continues to advance in the world of gaming or even virtual reality, there is a growing body of research that considers the possible health or therapeutic benefits of video games and technology.

In a meta analysis published in the American Journal of Preventative Medicine, findings from 38 other studies were considered. These studies all examined the use of video games in providing physical therapy, psychological therapy, improved disease self-management, health education, distraction from discomfort, and increased physical activity.

In general, video games were found to improve all of these metrics, especially psychological or physical therapy outcomes (which improved by 69% and 59% respectively).

While the researchers admit the 32 studies used in the meta analysis were not immensely high in quality, these findings ultimately suggest that video games have the potential to be used in various forms of therapy or to improve different health related outcomes and that this line of research should be researched further.

Educational Benefit of Video Games:

A study by Dr. Griffiths, a professor of Gambling Studies at Nottingham Trent University, examined the potential educational benefit of video games back in 2002.

While this study is quite dated, it highlighted some fundamental aspects behind the nature of video games and the behaviors they encourage, ultimately outlining the following possible benefits for education:

  • Video games can assist children in goal setting, practicing goal rehearsal, and general reinforcement.
  • Video games attract participation of individuals across a variety of demographics and social statuses.
  • Video games can be used as valuable research tools and allow researchers to measure a wide array of tasks or skills.
  • Playing video games can encourage the development of basic IT skills (which are transferable across many industries).
  • Video games are also beneficial for fostering basic development in language, math, reading ability, and social skills.

The study also suggested that when negative consequences of video games are found in individuals, these individuals are almost certain to have excessively played video games during their life.

In other words, there are numerous benefits to video games that can assist in educating adolescence, and as long as consumption is limited to normal ranges, children are unlikely to experience adverse effects.

Now, time to share some different video games I played while growing up that taught me some valuable lessons about finance and other important concepts!

Runescape – Learning Financial Management in Grade 4:

For current 20-30 year olds who got to experience adolescence with the dawn of the internet and evolution of video games, there are a slew of classic games and titles that captured the attention of millions of kids around the world.

If you grew up in the late 80s or 90s, I think there is a pretty decent chance that one of the games you remember best is Runescape.

runescape

Runescape is a game created by the developer Jagex, and was initially released in 2001. The version of Runescape I played and the version that was one of the most popular editions was released in 2007, but all of versions ever released by Jagex followed a similar premise.

In Runescape, you play the role of an adventurer in a medieval-fantasy world Gielinor. You can do anything you want in the game, really. You can improve your skills (like hunting, cooking, or farming), complete quests, fight monsters or other players for bounty and loot, or just explore the realm for fun.

runescape skills
A variety of Runescape skills your character could progress through,

However, the most fascinating thing to me about Runescape when I look back on the game is the sheer size of the in-game economy.

See, in Runescape, you can trade items and gold coins to other players either in direct transactions (in which you literally stand next to one another and exchange items) or through the Grand Exchange.

The Grand Exchange is the central marketplace of Runescape. It’s where players can list their loot or seek items for sale like important supplies, potions, weapons, and armor.

And, like any marketplace, certain economic realities inevitably have an impact on how prices are set on various items. In Runescape, this can be as simple as a supply versus demand relationship (i.e. an excess of people selling gold ore eventually drop the average price of the ore), or more complex (i.e. an update to the game introduces a new weapon and suddenly the rarity of the new item makes it immensely valuable).

The sheer amount of Runescape gold traded on a weekly basis is also interesting. In fact, Jagex even maps out weekly price fluctuations for the items in their game:

Runescape economy

You can track item price drops, rises, total volumes sold, and market movers for up to 6 months of game data. Additionally, there are billions of Runescape gold coins traded every single week which I find pretty fascinating.

These gold coins have also developed a real-world monetary value (to an extent), which makes the whole Runescape economy even more interesting. Players who are in desperate need of Runescape gold can purchase the gold using real world currencies on backdoor gold selling websites that break the rules by selling virtual currency for cash.

Gold farmers have been playing games like Runescape for years, and people in Venezuela have even been getting into Runescape gold selling as of late to earn an income amidst a hyper-inflated economy.

Anyway, I’m just trying to set the scene for how in-depth this virtual economy actually is. In-game, human behavior impacts the prices of various items alongside macro level changes to the game (via updates), and some people actually use this game to make a living. It’s nuts!

So, when I was introduced to Runescape in grade 4, I quickly discovered that I wasn’t too great at the whole ‘kill monsters and players to accumulate wealth’ strategy.

However, there were always shiny items or armor and weapon upgrades I wanted, but to buy them I would need lots of gold. Therefore, I had to resort to a money-making strategy that is pretty much as old as mankind: flipping.

Flipping items on Runescape used to be an absolute thrill. I still remember that aspect of the game to this day. I’d find sellers offering discounted prices on valuable items through various forums, arrange a meeting in-game, and then purchase my inventory. Over time, I’d offload my inventory whenever I could make a decent profit with a flip.

I could buy weapons, armor, or even bulk items like arrows or bronze bars; the process was always fairly similar. However, I definitely learned a lot through the process.

Flipping involved coordinating deals with buyers and sellers, knowing the right margins, researching the right items, and also knowing how much to risk on a flipping investment. I definitely got burned by spending too much of my capital on a certain item, and I also had to learn some patience when an item was taking a while to sell.

I was never an immensely wealth player in the game, but I truly believe Runescape taught me some valuable financial skills while I grew up. I learned how to save up birthday money, the value of investing, and how to set long-term targets that you don’t stray from alongside playing this game. Pretty neat for a simple browser based game!

StarCraft – Putting Assets to Work:

starcraft-2

 When I was a bit older I really got into the game StarCraft II, although the StarCraft franchise has been around since 1998 when the original game was released by Blizzard.

StarCraft is certainly one of the more iconic strategy games to ever exist. It helped pioneer the concept of competitive gaming, and StarCraft was one of the most popular e-sports game in the world for some time.

In Korea, professional StarCraft players have even earned rockstar like statuses and fan-bases, and professional players have won hundreds of thousands of dollars in tournament winnings (and earned millions when considering brand deals, salaries, etc.)

starcraft pro player

Professional StarCraft isn’t what it once was, but the franchise has always appealed to competitive players for one main reason: you need an incredible amount of game knowledge and mechanical skill to be good at the game.

See, understanding StarCraft strategy like how to scout your enemy or what military units to create didn’t make you a great player. To excel at the game, you had to have raw mechanical skill that covered two fronts: micromanagement and macro-management.

In StarCraft, ‘micro’ refers to how skillfully a player can individually manage their individual units on the field, whereas ‘macro’ refers to the ability to gather and spend resources as efficiently as possible.

marine splitting starcraft
A player manually ‘splits’ his marine corp into tiny battalions to avoid explosions – a classic example of micro-management in SC.

Watching a professional player who was known for being able to macro was always a great show.

In StarCraft, macro players aggressively expanded their economy and worker force in the early stages of games, investing the bare-minimum in defensive solidiers to just get by. As the game progressed, macro players continued to focus on gathering and spending resources as fast and efficiently as possible, and every bit of resource that came in was always put to work immediately.

Inevitably, a macro player with a booming economy was able to flip the switch later in the game and overwhelm the enemy with superior forces.

Macro players almost never had a ‘bank’ or surplus of resources idly sitting in their possession. Everything was put to work as soon as it came into the bank.

To me, the StarCraft concept of maximizing how hard your assets are working for you has made investing my own money much easier from a conceptual standpoint (I’m not kidding).

People will always have different opinions on how much money should be in an emergency fund, risk aversion, or portfolio composition, but I generally follow a more aggressive practice and never have more than 2 months of life expenses in my savings account (the rest gets put straight into investments).

To me, I don’t feel very concerned if markets dip and all I have in my checking account is 2-3 paychecks; I’d rather have skin in the game and make my money work than have 6+ months of an emergency fund at my current life stage.

Some Final Thoughts:

I only picked a few studies to include in the blog post, but there is a wealth of research out there that discusses the potential benefits of video games or their consequences.

Video games/technology in general have so much more potential than I mentioned here, and there are also studies that refute their benefit or raise concerns about video games as a means to foster violent behavior or antisocial tendencies.

At the end of the day, I can really only attest to the benefits of video games I have experienced during my adolescence, but I don’t think my experience is too unique.

Video games are really a way for people to consume content, and I have learned an incredible amount of information about history, politics, IT, language, and other subjects just by playing games that reference these subjects.

My love of history in particular was formed due to early exposure to medieval video games, and I think understanding history is critical to operating in the complex world we live in today.

Ultimately, I believe that as long as children are exposed to technology or games that have valuable content and interaction time isn’t excessive/is controlled, technology can have plenty of benefit and really impact a person in a substantial way.

I hope you guys have enjoyed this post!

I admit, this style of post is quite different than my usual side hustle ideas or personal finance posts, but I figure I would mix it up for a change and share a bit of a personal story.

I’m very excited for 2019, and I think the year will see a wider variety of content on This Online World and more fun posts than ever before!

I’d like to thank you all again for reading, and I wish you all a wonderful New Year full of love, health, and success.

Catch you in the next post,

Tom.

If you want to read some other content on video games I have written you can also check out:

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“Playing video games can encourage the development of basic IT skills”

This reminds me that one of the reasons Microsoft included Solitaire on their Windows machines was to help people learn how to use a mouse and be comfortable with it. Although I’m unsure how much solitaire fits in as a “video game” and if mouse usage falls under “basic IT skills.”