How Robinhood attracts users with its game-like design

As Matt Levine wrote in November:

"You can analyze Robinhood as a mobile gaming company. It makes an app that you can download to your phone, and then you can play a game on the app. As with many mobile games, there are in-app purchases, and you can end up spending a lot of money on the Robinhood game. The game is of course a stock-trading game. The purchases are stocks."

What they're saying: Noah Brier, of the indispensable Why Is This Interesting daily newsletter, this week compared E-Trade's option trading interface to Robinhood's.

"The former makes options look like a very serious thing you can lose a lot of money on. The latter resembles rating a YouTube video."

The bottom line: When a professional investor like Leon Cooperman says that the Robinhood mania will "end in tears," he's absolutely right on a literal basis: Bad design decisions might well have cost a young man's life. But if what he's talking about is total investment returns, he could be making a category error. People are attracted to games because of the enjoyment of playing them much more than because of the pleasure they get from any winnings.