Gaming subs largely eliminate the purchasing of physical games from retailers like Best Buy or GameStop, which has the potential to erode margins or even bankrupt some players. Subscriptions prevent churn, which could help create more long-term loyalty for one platform over another.

The GameStop saga and subsequent meme-stock frenzy of early 2021 pulled record numbers of retail investors into digital brokerages’ platforms. But a repeat of events at that scale is unlikely during our forecast period.

The GameStop stock saga in early 2021 and emergence of other “meme stocks” then prolonged the investment craze for commission-free trading apps like eToro, ZuluTrade, and Robinhood. What now? Robinhood's deepening losses are emblematic of the broader industry: Other publicly listed digital brokers, like eToro and Coinbase, have also posted disappointing results amid a slowdown in investor enthusiasm.

In one example, investors who were part of an online Reddit community used Robinhood and other digital fintech platforms to drive up the share prices of meme stocks such as GameStop and AMC Entertainment to manipulate the markets and prevent larger “establishment” hedge funds from cashing in.

The push to combine social media elements and trading has only intensified in the wake of the r/WallStreetBets-GameStop saga. More players will follow in the footsteps of eToro and ZuluTrade and incorporate social elements that allow users to discuss and share trade ideas, as well as copy trades of influencers. Why?

This raises concerns about repeating a scenario like Ryan Cohen using his outsize share of GameStop stocks to get a position on the board and rework the company’s business model. Similarly, a user who acquires a significant share of governance tokens for a particular DAO or DeFi protocol could exert control over that system.

It’s the smallest social network in this report but also one of the fastest growing, thanks to new features such as short videos and the notoriety it gained when investors flocked to Reddit to discuss and bid up GameStop, AMC, and other stocks. Pandemic-related conditions helped LinkedIn and Pinterest.

Famously, Keith Gill (aka, “Roaring Kitty”) did this by turning his $50,000 worth of GameStop shares into $50 million. These people don't care if someone is front running. They don't care if they get the trade a few cents cheaper. I've met people who have been more successful trading meme stocks than professional technical traders.

Trading apps like Robinhood are already in regulators’ crosshairs over the GameStop debacle in January, with SEC chairman Gary Gensler sharing plans last week to better protect consumers from gamified interfaces and the dangers of wrongdoers using social media to hype stocks.

GameStop short sellers lost over $5 billion. Perplexing the markets “for the memes”—i.e., it’s just funny. Reddit posts on r/WallStreetBets highlight how members make seemingly irrational investment decisions for the joy of duping financial institutions. Pump and dump. The artificially inflated share prices can maximize profit for the lucky few who invest early.

And the trading platform took center stage during the GameStop price surge earlier this year after it restricted trading on the stock, which resulted in several US regulator inquiries. This hasn’t inhibited Robinhood’s ability to raise funding, but it’s in the fintech’s interest to allay concerns ahead of its IPO.