Serious Games: Mobile Driving a 'Renaissance' in Edutainment Games are huge business nowadays and the technology behind today's games is being implemented in other industries more and more everyday. The serious games field has a lot of potential for growth, particularly in the realm of education. In fact, according to Ambient Insight, the U.S. game-based learning market reached $231.6 million in 2010, and the combined five-year compound annual growth rate (CAGR) for content, services, and tools is 12.3% and revenues will reach $413.2 million by 2015.
Mobile in particular is revolutionizing the games-based learning field. Ambient noted that the U.S. mobile edugame market reached $122.9 million in 2010, and the combined five-year compound annual growth rate (CAGR) for content, services, and tools is 16.5% and revenues will reach $263.3 million by 2015. Packaged mobile edugames will account for 90.5% of all revenues by 2015.
Sam S. Adkins, Chief Research Officer at Ambient Insight, took some time in advance of his presentation next week at the upcoming Serious Play Conference (Aug. 23-25 at DigiPen Institute of Technology in Redmond) to shed some light on this fast-growing market.
IndustryGamers: Where do you see the greatest opportunities for Serious Games - in healthcare, education, military or some other field?
Sam Adkins: In terms of revenues for packaged games, the greatest opportunities are for mobile edugames for young PreK-3 children, (which spans the consumer and education segments) and mobile brain trainers designed for older generations.
In terms of revenue, packaged mobile edugames are already outselling non-mobile (PC and console) edugames.
In the US, 31% of all paid educational apps (across all app stores, not just iTunes) are game-based learning products for young children. Over half of all mobile edugame revenues are related to brain trainers, a new genre of edugame invented in 2006 by Nintendo. Dozens of suppliers sell brain trainers now, but Nintendo still dominates the market.
That said, in terms of custom development services, the revenue opportunities are still concentrated in non-mobile edugames for healthcare organizations, corporations, and the federal government, respectively. In other words, you make less money developing custom mobile edugames for clients, than you do for developing custom PC-based edugames.
If you are a game publisher selling packaged games, mobile edugames for children and older adults is the way to go. If you are a custom development company, non-mobile edugame services for organizational buyers is the way to go.
One potential point of confusion in the market is the use of the phrase "serious games". The term “serious game” is used quite broadly. In healthcare and in the government the term is widely used when they are really talking about simulations. In our research taxonomy, we separate Simulation-based Learning and Game-based Learning. The main distinction of edugames is the presence of "gameplay," which includes some form of competition (against oneself or others) and a reward/penalty system that essentially functions as an assessment method. Game-based Learning products (edugames) have explicit pedagogical goals. A user "wins" an edugame when they achieve the learning objectives of the gameplay.
IG: Do you expect we'll see game-based learning or "edugames" become a standard part of classrooms in K-12 or in college?
SA: Edugames are already standard in the early primary K-3 grades. Edugames on literacy, numbers, and language learning are relatively ubiquitous in the US's K-3 grades. But then their usage fades in the higher grades with one major exception: STEM (science, technology, engineering, and math) edugames. A company called Tabula Digita has a very successful math game in the academic segment called DimensionM. They just expanded their game portfolio to include literacy and science games.
Twist Education is an example of a company that develops mobile edugames to teach physics concepts to high school kids. They just came out of beta in early 2011 and already have three mobile edugames on the market.
While there are ample examples of simulation-based learning products in higher education (medical simulations, business simulations, etc.,) and classes "taught" in virtual worlds like Second Life and ActiveWorlds, there are very few successful commercial edugames in higher education. Some business simulations do include competition and could be called edugames.
McGraw-Hill markets a series of business simulation games to the higher education segment. Another example is SimVenture, a business education game company based in the UK. It has started gaining traction in higher education. An edugame called CyberCIEGE has presence in the higher education segment. It is a game that teaches cybersecurity concepts. It was developed by the US government and is provided to higher education institutions for free. In any case, edugames are not in wide use in higher education.
Whyville is an educational virtual world for young children centered on math and science games. They have over 6.3 million users, mostly female children in the US. All of the virtual worlds designed for children under ten have educational components, usually game-based. There are over 110 million children under ten across the planet that are registered in virtual worlds. NOTE: registered users does not equal active users.
IG: Mobile apps on smartphones have been growing steadily and have had a big impact on the traditional games industry. Is it transforming Serious Games in a similar way?
SA: Absolutely. The tipping point has been reached. That does not mean a lot of developers are making money yet. Mobile edugame suppliers face many of the same challenges that any mobile game developer faces.
So-called "freemium" is now becoming the prevalent business model for mobile applications, with in-app purchases, subscription services, micropayments for virtual items, and upgrades to premium content as the alternative methods used to generate revenue.
Pricing pressures and revenue sharing models make it difficult for packaged mobile edugame suppliers to generate significant revenue. The buyers, particular consumers, expect mobile applications to be very low-priced. The supplier must generate a high volume of sales to achieve significant revenues. This has proved difficult for all but a handful of brand suppliers such as Disney, Hasbro, Nintendo, and Sesame Street.
So, when the mobile edugame revenues are combined, the outlook looks quite rosy. The fact is that the majority of revenues are concentrated in just a few suppliers with the rest spread out across hundreds of suppliers.
During the evolution of "edutainment" over the last two decades, endgames failed to make the transition from PCs to the consoles. This contributed to the now legendary collapse of the first-generation edutainment industry starting in the late 90s. The migration of games in general is from PC, to console, to mobile. Except for a handful of edugames for Nintendo's Wii, you will be hard pressed to find edugumes for the consoles.
Essentially, the edutainment industry is now experiencing a renaissance driven by mobile technology. A literal example is the recent resurrection of the LeapPad brand by LeapFrog. The brand and the product have been reintroduced into the market as a touch screen tablet device with edugames for young children.
Of course, Nintendo almost singly handedly reinvented the edutainment industry with the introduction of their mobile brain training games. Not only are brain trainers fundamentally new types of edugames, they are also designed for a demographic not known to play games at all – the older generations. Nintendo dominates the mobile edugame market - their brain trainers are the top selling edugames:
-
Brain Age and Brain Age 2 have sold over 37 million copies worldwide since their launch in 2006 - 9.3 million sold in the US
-
The number one best-selling game in Europe in 2007 and 2008 was Brain Age
-
In December 2009, Amazon placed Brain Age as the top selling game of the decade
-
Until August 2010, the top selling video game in the UK across all platforms (including consoles) was Brain Age
Also new mobile technologies such as mobile augmented reality and location-based services (LBS) have sparked significant innovation in mobile edugaming. An example of a company that sells mobile edugames with augmented reality is Ogmento. Their "Put and Spell" game for young children has a virtual panda that "tutors" children when they view the game board through a mobile device's camera.
A game developer called La Mosca in Paris sells mobile edugames enhanced with location-based technology. The player is guided through tourist locations while role-playing. According to La Mosca, “In Amsterdam, you help a retired police officer solve an old murder case. In Barcelona, the quest will lead you to the lost sketchbook of Gaudi. And in Paris, an old picture book takes you to Napoleon’s hidden treasures.”
IG: Who do you believe are the top companies to watch in the Serious Games space right now?
SA: It depends on the buying segment. As I mentioned above, the major brands for young children have all staked out territory in the mobile edugame part of the industry. Nintendo dominates the mobile edugame market.
Lumos Labs is a developer of PC-based brain trainer and brain fitness games and just garnered $32.5 million in venture capital in June 2011. That is the single highest investment ever made to an edugame supplier. Obviously the VCs think they are a strong contender.
As mentioned above, Whyville dominates the education virtual world market and Tabula Digita is the major player in the academic segment. BrainPOP is a strong player in the K-12 market as well.
Knowledge Adventure, best known for their MathBlaster game and one of the pioneers of the first-generation edutainment industry, has managed to reinvent itself as a successful educational virtual world and mobile edugame supplier.
Another company to watch is Sokikom. They launched the world's first "massively multiplayer online math social learning game," in June 2011.
Grokit is an innovative company that has developed a social game-based test prep Web site. Both tutors and learners compete for points. They are well-funded and the early market leader in game-based test prep.
Another well-known brand of children's mobile edugames is PBS with their PBS KIDS series.
In our opinion Nintendo is the leader in the industry. Nintendo has been very aggressive about expanding edugames into new demographics and new territories such as cooking, language learning, and most of all, brain trainers. In early 2010, Nintendo executives announced that they were launching a Mobile Learning platform called DS Classroom based on the DS device designed for primary and secondary schools. It was first deployed in Japan schools in late 2010. It comes with a PC-based content management system (for the teachers), assessment tools, and devices preloaded with learning content.
Nintendo continues to push the mobile edugame envelope. In August 2010, they launched a new art instructional title called Art Academy. Nintendo stated in the press that, "The launch of Art Academy is the latest effort in Nintendo's ongoing commitment to provide unique experiences." In March 2011, Nintendo announced an agreement with the National Art Education Association (NAEA) to distribute DS devices preloaded with Art Academy across schools in the US. They have sold over 2 million copies of Art Academy across the globe as of July 2011.
While not a company, NASA has been very proactive in developing and funding STEM edugames designed for school children. Just this month, they gave the Indiana Department of Education $750,000 to fund a four-year STEM game project for children in grades 4-9.
