About a week before a failing chain of stores that sell video games became the stuff that several movies are made of, Angie Fung, a regular lurker on the WallStreetBets subreddit, learned that GameStop’s stock might be a buying opportunity. She purchased a share of GME on January 25, as the stock’s price started to spike, and gradually amassed more shares as it continued to climb. She also invested in a trio of other well-past-their-peaks “meme stocks” that the subreddit sent soaring: AMC, Nokia, and BlackBerry. She hitched a ride on the rusty rockets as they lifted off, and days later, she rode them down to earth as they ran out of Reddit fuel.
For Fung, who says she neither gained nor lost the riches that other eager traders did, the short-squeeze showdown between the behemoth hedge funds that had heavily shorted the faltering stocks and the crusading, app-equipped retail traders that banded together to thwart them—to oversimplify the situation in a screen-ready way—was a landmark moment but barely a blip in her bank account. The 24-year-old Seattleite, who has a day job in property management, is a casual investor who doesn’t put more money in the stock market than she can comfortably afford to lose. “I’m definitely losing money on all these shares right now, but I’m pretty detached and I’m not too worried about them,” she says. “All I can do is hold with my diamond hands!”
Fung’s investment mindset was forged by financial failure. “I think a lot of people don’t realize that my generation grew up during the 2008 financial crisis,” she says. “Unfortunately, many people are used to losing, and we definitely don’t mind losing toward a goal we believe in.” But her origin story as a stock trader began in a fairly forgiving market that made her a multimillionaire: the “stalk market” in Nintendo’s 2020 hit, Animal Crossing: New Horizons, a bustling in-game exchange centered on a single commodity—turnips. “I actually never invested anything prior to playing Animal Crossing,” Fung says. “I think the game was a great introduction to stocks, and it’s a great gateway to the real thing.”
About 10 months before GameStop became a cause célèbre for a legion of extremely online investors who saw a chance to strike it rich and stick it to the fat cats, it was a shrinking company trying to keep its doors open during a pandemic. One incentive to stay open despite its workers’ safety concerns: the prospect of profiting from Nintendo’s latest high-profile release. Although GameStop eventually canceled its scheduled midnight release events for the game because of COVID-19 (and later restricted consumer access to its stores), the latest and greatest Animal Crossing was more than capable of becoming a global blockbuster without the brick-and-mortar boost. New Horizons—the fifth main game and third console installment of a series that started in 2001—was one of the bestselling titles of 2020. Nintendo reported more than 31 million units sold worldwide between the game’s March 20 release date and December 31, a figure that helped propel the venerable game-maker and its compact Switch system to an extraordinarily lucrative year.
The laid-back social simulation, which was nominated for Game of the Year at the Game Awards 2020 and took home the hardware for Best Family Game in December, was the perfect pandemic de-stressor. Stuck in their homes and cut off from family and friends, players delighted in decorating and populating the deserted islands they purchased from tanuki tycoon Tom Nook. The low-stakes, slow-paced game gave millions of pandemic-distressed players control of their virtual surroundings, allowing them to clothe their characters, deck out their dwellings, invite villagers to settle on their islands, and create comforting communities of anthropomorphized animals.
That therapeutic collecting and crafting requires cash—or, as it’s called in Animal Crossing’s most common currency, bells. One way to acquire bells is to trade turnips. In New Horizons, which takes place in real time—the date and time in the game is the same as the date and time of the Switch system—players can purchase turnips every Sunday morning from snot-nosed boar Daisy Mae (a reference to Fannie Mae, much as her turnip-selling grandmother in earlier incarnations of Animal Crossing, Sow Joan, was a reference to the Dow Jones). On any other day, players can sell said turnips to Tom Nook’s twin apprentices, Timmy and Tommy, at all-purpose store Nook’s Cranny. The catch is that the apprentices’ prices fluctuate wildly from morning to evening and day to day, which means that players may make or lose money before their turnips expire at the end of the week. This is the stalk market—and like every market, virtual or otherwise, it begs to be exploited. “Last year’s craze was the stalk market,” says Matt “Jaku” Jakubowski, the CEO of Warp World, a gaming and streaming tool developer that created the popular stalk market trading site Turnip Exchange. “And now here we are, playing the real stock market.”
A brief financial disclosure statement: Animal Crossing didn’t cause the recent series of short squeezes, as great a twist as that would be for the forthcoming screenplays. The advent of commission-free and fractional trading, the prominence of populist platforms like Reddit, TikTok, and Discord, the pandemic-driven deprivation of other entertainment options, and the robustness of the stock market after a mid-March free fall created and emboldened an army of individual investors. But before GME made the mainstream aware of the new trading paradigm, New Horizons tapped into those trends, inspired an earlier financial frenzy, and foreshadowed further internet-organized action.
Keith Gill (a.k.a. “DeepFuckingValue”), who spearheaded the GameStop surge on r/WallStreetBets, isn’t much of a gamer; according to The Wall Street Journal, he “never played much besides Super Mario or Donkey Kong.” But some of the investors who flocked to Gill’s WallStreetBets banner were stalk market veterans who recognized the potential for another attempt at crowdsourced market manipulation. As Fung says, “WSB and the Animal Crossing community are similar in some ways. … With the turnip market in Animal Crossing, I think it only took a couple of weeks for people to break the algorithm and create software that will predict the turnip prices throughout the week. I think WSB channels the same type of energy and passion into stocks.”
In case you missed it, this was the Reddit ad that ran in nine of the top 10 US TV markets during the Super Bowl.
It was five seconds, which made many of those who caught it rewind and pause. pic.twitter.com/yMDHovNK5i
— Darren Rovell (@darrenrovell) February 8, 2021
In-game economies tied to virtual currencies date back decades, sometimes swelling to massive proportions in long-lived, massively multiplayer online games such as EverQuest, RuneScape, Second Life, EVE Online, and World of Warcraft. Those exchanges of artificial goods and services are just as susceptible to exploits, scams, and catastrophic crashes as the ones in our world. “Mass griefing of serious systems is really fun,” says Edward Castronova, a professor of media at Indiana University and the author of Life Is a Game and multiple books about virtual economies.
Animal Crossing’s economy isn’t among the most complex, but the pandemic-propelled popularity of New Horizons, paired with the networking capacity of a hyperconnected community, made the stalk market an immediate sensation. Turnip trading was a staple of previous Animal Crossing games, and turnip prices were also somewhat predictable in the predecessor to New Horizons, 2012 3DS game Animal Crossing: New Leaf, but the conditions almost a decade ago weren’t as conducive to an Animal Crossing economic cottage industry. “When New Leaf came out, I don’t think online communities were as connected as they are nowadays,” says “Indy,” an Australian man who moderates at Turnip Exchange. “I don’t think it had nearly as big a community around turnip trading.”
Only 10 days after New Horizons came out, a software developer in Scotland, Ash Wolf, revealed the reverse-engineered code that governs the game’s turnip pricing. By the next day, a U.K. programmer named Mike Bryant had drawn on the data Wolf found to build a turnip-price-predicting tool, Turnip Prophet, and posted it on the WallStreetBets of the stalk market, r/acturnips. “I’m definitely the sort of gamer who tries to take advantage of games,” Bryant says. “Sometimes I try and play through games without reading too much about it, but I’ll eventually end up just trying to figure out optimal ways of doing things.”
In New Horizons, weekly turnip prices follow one of four patterns, which Turnip Prophet can help predict if players enter their past prices. “Within the first four to six prices—so, the first two, three days of the week—you’d be able to get quite a good idea of which pattern you’re in,” Bryant says. “You’d be able to see sort of upper and lower bounds of what you could expect.” Armed with that information, players could maximize their returns on their own islands or—in the event of an unfavorable pattern—visit friends’ or strangers’ islands in search of higher prices. Turnip Prophet quickly found favor with players who weren’t content to trust in the whims of Timmy and Tommy, and its functionality and polish improved as other programmers pitched in to tweak its open-source code. Its popularity peaked at 1.7 million unique users last May.
Other tools designed to streamline stalk market inefficiencies arose early in the game’s life cycle, Turnip Exchange chief among them. Before Jakubowski and a colleague built Turnip Exchange, the most convenient way to find other islands with attractive turnip prices was to browse r/acturnips, where players would post their current prices. But that system was a hassle for hosts, who would have to enter randomly generated Dodo codes—cousins of the Switch’s 12-digit friend codes, widely-loathed relics of Nintendo’s halting, archaic approach to online play—one by one as people posted to ask for admission. Turnip Exchange automated much of that process via a more convenient, code-free queue, and 6 million monthly users frequented the site at the height of its traffic.
Not long after Turnip Exchange launched, a software developer named Devon Bernard, whose girlfriend had been frustrated by the obstacles to trading via Reddit, built an alternative to Turnip Exchange called ACNH Exchange. Bernard’s app soon exploded in popularity too. Unlike Turnip Exchange, which sticks to turnips and doesn’t allow chatting, ACNH Exchange also allows its users to advertise and discover events and in-game hangouts. That social component soon became busier than the app’s purely transactional stalk market side, perhaps unsurprising given the game’s success as a virus-free setting for dates, sexual encounters, and talk shows. “I think part of that’s just due to COVID, people saying, ‘Hey, I can’t socialize in person, so might as well be creative and hang out with folks online,’” Bernard says. Players never knew when they might meet Elijah Wood.
Bernard is usually more of a mutual or index fund investor than a stock-picker, but says he and his partner bought some shares of GME when the stock sat below $100 and quadrupled their money. “When you can see, ‘Hey, there seems to be a mechanical upside that’s predictable,’ OK, cool,” Bernard says. “And then sure, there’s part of the camaraderie of being in a community, feeling like you’re sticking it to somebody because of ’08, because all they got was a slap on the wrist.” That sentiment, too, has an Animal Crossing analogue: resentment toward accused (but not condemned) “capitalist crook” Tom Nook, to whom many new players are deeply in debt. “Are bells even a real currency?” Bernard asks. “Or is it just a thing Tom Nook uses to keep you broke and subservient to him?”
Jakubowski is happy to help players escape from under Tom’s thumb: “I’m excited to be able to help them with their mortgages,” he says. Indy sees that esprit de corps as the strongest link between Animal Crossing and the rapid rise of the meme stocks. “You could draw a parallel between the Turnip Exchange community and WallStreetBets in that regard, where everybody’s just trying to help everybody get richer,” he says. (Well, not everybody: WallStreetBets, overflowing with edgelords and bots, finds itself in a civil war.)
But Jakubowski doesn’t think the ultra-efficient stalk market New Horizons players perfected through trading with strangers on Turnip Exchange follows the model Nintendo drew up. The scale of the intense trading was almost antithetical to the game’s zen vibe. “I think [Nintendo] intended more for you to do it with your circle of friends,” he says. “But at the end of the day, the internet will do what it wants.” Or as Bernard puts it, “People always want to arbitrage things and get the most bang for their buck.” The game is the game.
In the real-life market, unlike the stalk market, each stock has a single price, which is sensitive to trading activity. Bernard compares Animal Crossing’s distributed market to cryptocurrency exchanges, which offer different prices that may yield arbitrage opportunities. But Animal Crossing’s most money-hungry players can engage in other exploits that wouldn’t work for WallStreetBets. For instance, time travel: By resetting the Switch’s system clock, players who hear about a lofty turnip price on another island can return to the previous Sunday, stock up on turnips, and then travel to that island repeatedly to rack up beaucoup bells. Alternatively, players can flash forward several decades to take advantage of earned interest or to bury bells in a particular place and then pluck the proceeds from a mature “money tree.” Some players have even hacked their Switches to enable various cheats, including one trick that can immediately make them bellionaires. (Well, almost: Technically, the maximum number of bells is 999,999,999.)
The recent real-life disruption of the non-bell-based economy has already raised the specter of a regulatory response. In reaction to Reddit’s crush on nostalgia stocks, the commission-free trading app Robinhood temporarily imposed restrictions on multiple meme stocks, which Bernard says made him feel like the system was rigged in the hedge funds’ favor. That decision spurred some users to file a class-action lawsuit and drew bipartisan side-eye from Congress, which is preparing to hold hearings later this month and has called on Gill and Robinhood’s CEO to testify.
Aside from slashing interest rates to reduce the payoff from fast-forwarding, Nintendo hasn’t taken any significant post-release steps to curtail time travel; Mr. Resetti, the ornery mole who in past games lectured players who reset their systems, is almost absent from New Horizons. Last March, the game’s director and producer said that they don’t consider time travel cheating, although they don’t think it’s the ideal way to play. Nintendo has condemned real-money transactions for in-game items, but it hasn’t tried to make turnip trading less lucrative by altering the turnip-price algorithm, restricting remote turnip sales to friends’ islands only (which players could work around by exchanging Switch friend codes), or limiting the stalk market to local multiplayer (which would be a bad idea during a pandemic, when people can’t congregate safely).
There’s no pressing need for Nintendo to mess with success: The game has sold better than the company could have hoped, and because New Horizons isn’t a competitive title, these exploits are victimless crimes. Tools such as Turnip Exchange and ACNH Exchange may break the game’s economy by making it almost impossible to lose bells, but they also give gamers great incentive to be social and explore islands other than their own.
The only obvious downside is that excessive wealth can be boring. “Even after the first week of using Turnip Exchange, I had already paid off all my house loan and bought those expensive clothing items,” Indy says. “So at that point I was kind of like, ‘Oh, I guess I can just get money for fun.’” It wasn’t fun for that long: Through turnip trading, time travel, and other shortcuts, he became a maxed-out bellionaire. With that much money, even an unlimited supply of New Horizons’ secondary currency, Nook Miles—and the most coveted villagers and items on black-market trading sites such as Nookazon and nook.market—are well within reach.
At first, Indy’s vast wealth was kind of cool. “It is pretty satisfying to look down at your game and go, ‘Wow, that number cannot go any higher,’” he says. “You go into the ATM and it’s just like, ‘Yeah, that’s the most money.’” But once he had nothing to shoot for, he lost some of his lust for life on the island. “The satisfaction of playing the game also goes away a bit,” Indy says. “At that point, you can buy everything in the game a hundred times over and still have change. I guess much like real life, there’s really not much point in having that much money.” (Which doesn’t seem to stop most billionaires from trying to make more.)
Indy decided to give much of his wealth away—roughly 450 million bells so far—in a series of scheduled events in which new, impoverished players could visit his island and go away wealthy. “It wasn’t even ‘Sell your turnips,’” Jakubowski recalls. “It was just, ‘Come and grab bags of money and leave.’”
Initially, Indy repeatedly ran to and from the ATM, where he withdrew the maximum amount he could keep in his inventory, dropped a bulging bag of bells near his newest visitor, and went back to load up again. “After the first couple of times we did that, I ended up just spending a couple of hours laying out a big 100 x 100 area on my island, and then I would just go around and fill every single space with bells and be like, ‘All right, start the queue,’” Indy recalls. If only an actual island-owning billionaire would take a cue from the virtual philanthropist. “It would be nice, wouldn’t it?” he says.
“It will be interesting to see, in another six years when the next Animal Crossing game comes out, if they do have some sort of stalk market regulations in it,” Jakubowski muses. But Indy doubts Nintendo will ever enforce austerity. “There’s not really, I think, a way to stop it in the future,” he says. “People are going to find a workaround for whatever they put in place.” Game the same. Just got more fierce.
As meme-stock madness seized the internet late last month, Animal Crossing comps came fast and furious. Tweet after tweet likened the history of the stalk market to the GameStop stock rush, and post after post aggregated the tweets. Some jokingly cried conspiracy, noting that Nintendo of America’s former president sits on GameStop’s board. “Concerned for this sub,” said the subject line of a post on r/acturnips. The body text continued, “They’ve already taken down r/WallStreetBets, and we could be next.”
how did I learn to trade exactly one stock manipulated in the open by a loose collection of anonymous posters? animal crossing.
— ☕netw3rk (@netw3rk) January 27, 2021
this gamestop thing is like that part in “slumdog millionaire” where it flashbacks to his whole life’s experience preparing him for this moment except it’s just me playing animal crossing in 2020 and tom nook teaching me about buying and selling turnips
— Rick Wong (@fwong) January 30, 2021
Nintendo uses turnips to teach gamers about stocks and speculation and look what happens.
— Mike Minotti (@Tolkoto) January 27, 2021
Drawing a straight line from the people that cornered the Animal Crossing turnip market to the GameStockers
— Brittani Nichols (@BisHilarious) January 27, 2021
Animal Crossing turnips walked so GameStop stock could run
— Mike Hamilton ☃️ (@MtHamiltron) January 27, 2021
In a popular post on the main Animal Crossing subreddit, user “elpinko” wrote, “Nintendo spent an entire year training us for this moment,” accompanied by an animation of Tom Nook plotting to short turnips. “The idea of bedroom traders being trained by Tom Nook was too good to resist,” elpinko explains.
When New Horizons blew up last spring, some players who were already well-versed in monetary matters gravitated toward the game and found its finances familiar. For Fung and others who were exposed to trading for the first time, the game represented an opportunity to learn. And when the recent talk of shorts and squeezes broke business noobs’ brains, Animal Crossing came in handy again. Reddit user “adaily,” a software developer who got into finance to support himself between jobs (and who says he made a 60 percent profit on GME), posted a well-received explainer on r/AnimalCrossing that laid out the latest activity terms of the game. So did Danielle Morgan in an even more popular post, which relayed her husband Tate’s response to her request for an Animal Crossing analogy. “It was kind of a joke, but I also needed it in terms I could understand,” she says. “Once hedge fund managers, the Redditors participating, and stocks were replaced with Jolly Redd, Gullivarrr’s crew, and turnips, it suddenly made sense!”
Amanda McLoughlin, the CEO of podcast company Multitude Productions, made another contribution on Twitter to the “Could you translate that into Animal Crossing?” canon. “It’s hard to understand that most of what’s traded every day on global financial markets is insubstantial, two or three degrees removed from a tangible thing,” she says. “Comparing it to a physical thing that Animal Crossing players are used to buying and selling makes understanding everything a little easier.” She adds that Animal Crossing helps convey the concept that a company’s stock price is a function of demand, not of inherent value. “In Animal Crossing, the actual turnips you dumped in your side yard or on your beach aren’t any different on Tuesday when they’re worth 800 bells than on Wednesday when they’re worth 100,” she says. “It’s just the price that changed.” Similarly, GameStop stock’s sudden inflation wasn’t a sign that selling physical copies of games that most players purchase via digital download had become a better business model.
So some jerk on another island was like “Turnips are useless and I think the price will be like 20 bells next week, so I’m gonna promise to sell them to you super cheap. I’m so sure they’re going to be cheap that I’ll sign a contract promising to sell them to you at 22 bells.”
— Amanda McLoughlin (@shessomickey) January 28, 2021
On January 27, Twitter user @I_nXIV made the most-shared mashup in the New Horizons/GameStop genre.
The takeaway from the funny juxtaposition, @I_nXIV say, is that “With enough people and the right tools (such as access to fractional stocks), we can influence the market in the real world too.” But they’re anxious about the short-term consequences: “I fear that many people are gonna lose money as the hype dies down. I even regret posting that meme. While being easy to digest, it does add to fear of missing out and inflates the value of GME.”
Early investment activity tends to be beneficial later in life, but retail investors assume more risk than time-traveling turnip merchants, especially if they’re new to trading. “The internet hive mind is definitely attracted to this and is bringing in new people that might not have been interested until they saw the hype,” Jakubowski says. “And I think the same thing happened with Animal Crossing.” Castronova notes, “It’s all the same—crowd behavior, where the crowd is on the internet.” He continues, “If you’ve seen ‘the wave’ during a boring soccer game, you understand that crowds of people will do nutty things just for the heck of it.”
But with the dust still unsettled, it may be too soon to say whether it’s nutty—or, for that matter, to truly understand the intricacies and import of what went down. In spite of her personal losses and the meme stocks’ swift retreat, Fung’s morale remains high. “I think with the participation of the retail investor, this is the beginning of a new age of trading,” she says. “With games like Animal Crossing and TikTok financial advice, kids and young adults are becoming way more financially literate. They’re learning how to play the game, and the GME short squeeze was just the beginning.” In New Horizons, the game never needs to be over. In the actual economy, regulators and time—but not time travel—will tell.