Traditional banks are not nearly as important to many millennials as they are to older generations. When choosing brands, millennials focus on added value and technological simplicity. They also happen to be a generation of video game players. From PCs, to consoles, and even phones, video games are a daily part of the lives of many of them. In 2015, video game giant EA reported revenue of $4.5 billion while Nintendo generated $4.6 billion. On July 6, Niantic released Pokémon-GO, which has since been downloaded more than 100 million times. This is a fantastic example of the reach video games have.
As DM News reported in the article 3 Truths about Millennials and Gaming, “There are more than 320 million people in America, and 155 million of them play video games, according to The Entertainment Software Association’s (ESA) 2015 Essential Facts About the Computer and Video Game Industry study. According to the study, about 56 percent of the U.S. gamer population are under the age of 35, with 30 percent falling between 18 and 35 – the age bracket that many consider to represent the millennial generation. ‘If half the country is gaming, it represents a large segment of discretionary spending. ’”
The Millennial Disruption Index (MDI) created by Viacom’s Scratch team ranks banking as the industry with the highest risk of disruption, reporting that “1 in 3 are open to switching banks in the next 90 days” and “53 percent don’t think their bank offers anything different than other banks.”
For other generations, banks were a symbol of security and trust, but some millennials may decide to abandon their bank for an app that would make banking easier. Research has shown that millennials tend to use check cards, making it difficult for large banks to add value since check card margins are not as high as credit card margins. Adding actual rewards points for airlines, hotels and/or cash has worked for credit cards but aren’t likely be profitable for check cards. At a time when new technologies like blockchain and mobile apps threaten to disrupt the traditional banking market, how do large banks attract and keep millennial customers?
Could banks use millennials’ love of video games to expand the traditional banking market to find new sources of revenue (maybe a swipe fee percentage) and earn brand loyalty with this demographic? Could they leverage partnerships to share marketing information about gamers, gamer tags and Digital IDs and develop some valuable insights on this generation?
Gamers are extremely loyal to their brand – nearly 86 percent of people who own a WiiU console owned the previous-generation hardware, according to a Nielsen survey. Nintendo released its first console more than 30 years ago and has maintained many of its fans from day one. Could a partnership with one of the well-established console brands tap into a fan base of extremely loyal consumers?
Let’s take Pokémon-GO as an example. Pokémon-GO has several in-game virtual currencies including “Coins” you can buy from the app or earn in battle, “Candy” for evolving or leveling Pokémon, and “Stardust” to evolve Pokémon. Both Candy and Stardust are not currently purchasable in-game and can only be obtained by playing the game, i.e., catching Pokémon.
So what if a bank created a new debit card or checking account or even credit card that could earn virtual currency in the same way people earn rewards with traditional credit cards? Some examples:
- Each purchase could earn you a certain amount of Stardust.
- Autopay sign-up gets you Candy.
- Using Apple Pay gets you 2x stardust on the same purchase.
Unlike plane tickets or hotel rooms, the rewards are virtual in nature and not directly tied to an actual cost. A virtual currency market could be created where users could trade Pokémon, Candy and Stardust all via an app. Imagine paying back your friend for lunch with Pokémon Stardust!
To take it a step further, instead of just one game, a virtual currency could be set up to be used universally across the entire franchise. Nintendo has more than 700 games in its franchise, and EA has more than 500. Imagine a Nintendo or EA virtual currency that could also be used across all platforms – PCs, consoles, mobile phones and handhelds. The virtual currency could be used to buy in-game add-ons, discounts or traded among friends.
Adding rewards to purchases is not a new proposition – it has proven to be successful for most credit card brands. Adding virtual video game rewards to check card accounts could be a fantastic way to make traditional bank accounts more attractive to younger consumers. While most basic checking accounts provide little or no added benefit as a stand-alone product, this approach could help a bank add value to their customers’ favorite pastimes.