Alice Albudget is a rising Hollywood starlet who loves to buy expensive handbags and designer dresses with her credit card. Every day hundreds of people attempt to become her money manager and teach her how to use credit cards properly and control her spending habits.
These trial money managers-who must keep her happy or risk getting fired-are among a growing number of people getting a financial education through a handful of online video games.
The D2D Fund, a financial literacy nonprofit in Roxbury, Mass., is leading the charge in developing such games. It has introduced five so far, including Celebrity Calamity featuring Albudget.
About 125,000 players have tried them over the past year, including some who learned about the games from their own community banks. Research shows that they play for an average of 22 minutes and that they are indeed improving their financial skills while also having fun.
"We are not creating games for video games' sake, but are turning their minds on and getting folks practicing and taking action to increase savings and minimize debt and fees," says Nick Maynard, D2D's director of innovation.
Since the launch of its online video game portal in April 2010, the organization has promoted Celebrity Calamity through several outlets, including banks, community colleges and the military. Maynard says he expects banks to become even more involved with the initiative soon, because the next step is linking the games to actual products and services so players can apply their financial knowledge.
Guaranty Bank in Milwaukee made Celebrity Calamity the focus of a marketing push last summer, after setting out to find an untraditional way to get a financial literacy message to its customers, says Jennifer Tucker, the bank's corporate communications officer. "We are always looking for innovative ways for customers to achieve financial literacy," she says. "And the game is exciting and engaging and really grabs the customer's attention. It's a lot different from most financial literacy methods."
The $1.3 billion-asset bank touted the game in its branches and included notices in customers' monthly statements. Guaranty employees also were encouraged to play so they could talk about the game with customers. But what really drew people in, says Tucker, was a large Flash image on the bank's home-page, which made it easy for them to just click and play.
The three-month promotion drew 9,539 unique visitors-about 8 percent of the total players to try out Celebrity Calamity since its launch.
Guaranty did not measure if customers learned anything from the game. But Tucker says she is confident they did, based on the anecdotal feedback she heard and the fact that players stayed in the game for an average of 15 minutes.
D2D has done its own testing among low-income individuals ages 18 to 35 (the target demographic for the games), and says participants gain a lot of knowledge after playing at least 60 to 90 minutes.
One sample of 44 individuals who played Celebrity Calamity showed a 50 percent to 70 percent improvement in answering key financial questions correctly. They also had a 15 percent to 30 percent boost in their financial skills self-confidence.
Maynard says all the games have gone through years of development and testing that involve both financial education experts and professional video game designers. The concepts are based on popular video games; one called Farm Blitz has similarities to Farmville and Bejeweled. The player is a farmer who must harvest crops to earn money. And to be able to harvest, the player must get three identical rows of crops, similar to how a line of three jewels is needed in Bejeweled.
Sarah Gordon, the senior relationship manager for the Center for Financial Services Innovation in Chicago, says the games are successful because they are fun and professionally done. Low quality would have put people off.
"People are getting sucked in," Gordon says. "If there are additional benefits-and people know more about financial concepts-then it's really powerful."
Gordon's only criticism is that there is no mechanism in the game for players to apply this new knowledge to their finances and start changing their own habits-which she says is the key to success of any financial literacy tool.
But Maynard says D2D is working on exactly that. He says the nonprofit is looking to partner with financial institutions to help players take the next step.
For example, at the end of playing Farm Blitz, a game that is designed to encourage savings, a player could commit to saving $5 a week, and then be offered the option to do this through a financial institution partner.
"Now we need to link financial education to building financial capabilities and changing outcomes," Maynard says. "And we are looking for partnerships to test this."
But the potential partnerships aside, Ed Merritt, president of Mt. Washington Bank, says banks should promote these video games because they're a great way to reach the ever-desirable 18- to 35-year-old group.
Mt. Washington, a division of the $1.8 billion-asset East Boston Savings Bank, introduced Celebrity Calamity to its customers in a marketing push last summer, and though it had a fraction of the response that Guaranty did, Merritt deems the trial a success.
"Overall it was a really good experience," Merritt says. "I think it was a good way to reach the younger population and a good way to connect with them."
D2D isn't the only organization producing financial literacy video games.
In 2005 Visa teamed up with the National Football League to launch Financial Football, a money management game for high school students. In 2006 Wells Fargo & Co. introduced its role-playing financial education game Stagecoach Island targeting high school and college students.
And just as the financial crisis erupted in September 2008, the Treasury Department launched Bad Credit Hotel along with nationwide public service announcements to help young adults better manage their credit. Around that same time, the Financial Industry Regulatory Authority released Moneytopia, a money management game geared toward young people in the military.
But Gordon says the D2D games stand out from the rest as they could survive on their own merits as video games.
Another plus is that players are not bombarded with the same financial concepts repeatedly as there is a suite of games to choose from. Besides Celebrity Calamity for managing credit and Farm Blitz for savings, the options from D2D include Groove Nation for budgeting, Bite Club for retirement savings, and its latest, Refund Rush, for tax preparation.
"I think what D2D is doing is creating a fun gaming experience first and then subtly working in the financial concepts," Gordon says.
Laura Fischer, executive director of the American Bankers Association Education Foundation, says in her experience the most effective financial education is presented as a classroom lesson with follow-up assessments. But she says maybe D2D's mainstream video games have "cracked the code" in combining technology and financial literacy.
"Financial education can be kind of dry," Fischer says. "So that's great if you can teach people without them knowing they are being taught."
