Tyson Greer - The 2013-2018 Worldwide Game-based Learning and Simulation-based Markets

Ambient Insight 2014

The 2013-2018 Worldwide Game-based Learning and Simulation-based Markets

Key Findings from Recent Ambient Insight Research

Serious Play Conference 2014

July 22, 2014

Tyson Greer, Chief Executive Officer

Ambient Insight


Agenda

Introductions - Research Taxonomy

Worldwide Simulation-based Learning Revenues

Worldwide Game-based Learning Revenues and Buying Behavior

Game-based Learning Investment Patterns


Partial List of Ambient Insight’s Clients

Adobe

Amazon

Amplify

Apple

Blackboard

BrainPOP

British Council

Cambridge University Press

Chungdahm Learning

Cisco

Dell

Disney

Hasbro

Houghton Mifflin Harcourt

IBM

John Wiley & Sons

McGraw-Hill

Macmillan

Microsoft

Oxford University Press

Pearson

Rosetta Stone

Ambient Insight is an integrity-based market research firm that uses predictive analytics to identify revenue opportunities for suppliers.


Ambient Insight’s Learning Technology Research Taxonomy

Have Eight Buyer Segments

From Six Types of Suppliers

That Buy Eight Types of Digital Learning Products

Packaged Content

Consumer PreK-12Corporations - Businesses

Higher Education

Federal Government

State - Local Government

Associations & Non-Profits Healthcare

Custom Content

Cloud-basedTools & Platforms

Value AddedServices (VAS)

Installed Tools & Platforms

Learning Devices

Digital Video, Text, & Audio

Reference

Self-paced eLearning

Courseware

Collaboration-based

Learning

Simulation-based

Learning

Cognitive Learning

Mobile Learning

Social Learning

Game-based Learning

These six supplier types map directly to the six subcategories of learning technology products

Seven International RegionsNorth

AmericaLatin

AmericaEastern Europe

Western Europe

Asia Africa The Middle East


Game-based Learning is a Subset of the Learning Technology Industry

Ambient Insight defines Game-based Learning as one of the eight distinct types of learning technology products

We do not approach Game-based Learning as a subset of the global videogame industry, but rather as a subset of the global learning technology market

In the context of the global learning technology market, isolating Game-based Learning products is relatively straightforward

There is only one hardware-based learning technology product type and that is Personal Learning Devices (PLDs)

Ambient Insight’s 2014 Learning Technology Research Taxonomy

http://www.ambientinsight.com/Resources/Documents/AmbientInsight_Learning_Technology_Taxonomy.pdf





2013-2018 Global Market Forecasts for Game-based Learning and Simulation-based Learning

Ambient Insight separates Game-based Learning revenues and Simulation-based Learning revenues

There are distinct pedagogical differences between Game-based Learning and Simulation-based Learning

Our definitions are based on the definitions developed by Alessi and Trollip

Global Revenues by Learning Product

Type***

2013 Revenues in US$ Millions


Five-Year CAGR

2013-2018

Simulation-based Learning $3,022.42 $7,188.33 18.9%

Game-based Learning $1,739.55 $2,404.12 6.7%

Total $4,761.97 $9,592.44 15.0%

*** Does not include hardware


Pedagogical Definition of Game-based Learning

Game-based Learning is a knowledge transfer method that utilizes "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

There are distinct pedagogical differences between Game-based Learning and Simulation-based Learning.







There are distinct pedagogical differences between Game-based Learning and Simulation-based Learning.

There are four types of Simulation-based Learning:

Physical Object and Environmental Process Procedural Situational

Allessi and Trollip compressed these four into two instructional strategies: learning about something (physical and process), and

learning to do something (procedural and situational).

Pedagogical Definition of Simulation-based Learning







Gamification Versus Game-based Learning

SpongeLab on Game-based Learning versus Gamification: “Gamification is the application of videogame rules,

mechanics and conventions to a non-gaming situation. Put simply, if a student is playing a videogame and learning from it, we aren’t witnessing gamification - the student is experiencing game-based learning. An educational game hasn’t been ‘gamified’ - because it’s a game already!”

Game elements are often “bolted on” to legacy training products

Badgeville sells gamification add-ons for corporate training

Course Hero has online courses that use Bunchball’s game mechanics

Oxford University Press and Scholastic use SecretBuilder’s game platform to “gamify books”


2013-2018 Worldwide Simulation-based Learning Revenue Forecasts


2013-2018 Worldwide Simulation-based Learning Market

The five-year compound annual growth rate (CAGR) of the Worldwide Simulation-based Learning market is 18.9%. Revenues reached $3.0 billion

in 2013. Revenues will more than double to $7.1 billion by 2017.

*** Includes custom content services and authoring tools revenue

Simulation-based Learning by Region***



Five-Year CAGR

2013-2018

North America $1,596.63 $2,951.48 13.1%

Latin America $143.70 $740.82 38.8%

Western Europe $558.82 $1,083.19 14.2%

Eastern Europe $68.66 $156.43 17.9%

Asia $542.85 $1,918.46 28.7%

The Middle East $15.97 $51.65 26.5%

Africa $95.80 $286.29 24.5%

Total $3,022.42 $7,188.33 18.9%


UK-based Immerse Learning's English for Oil and Gas simulation-based product developed for a Kazakhstan oil company. "While students are

learning English, they walk around a virtual version of the equipment that they are being trained to work on."



Sophisticated Mobile Healthcare Education Simulations Now on the Market

http://www.3d4medical.com/


2013-2018 Worldwide Simulation-based Learning Five-year Growth Rates by Region

North A

meric

a

Latin A

meric

a

Weste

rn E

urope

Eastern

Euro

peAsia

Mid

dle E

ast

Africa

0%

10%

20%

30%

40%

2013-2018 Growth Rates by Region


2013-2018 Worldwide Game-based Learning

Revenue Forecasts


2013-2018 Worldwide Game-based Learning Market

The Worldwide Game-based Learning market reached $1.7 billion in 2013. The global growth rate is 6.7% and

revenues will reach $2.4 billion by 2018.

*** Includes custom content development services revenue

Game-based Learning by Region***



Five-Year CAGR

2013-2018

North America $421.96 $607.24 7.6%

Latin America $42.20 $77.73 13.0%

Western Europe $109.71 $118.41 1.5%

Eastern Europe $20.25 $33.40 10.5%

Asia $1,115.89 $1,523.01 6.4%

The Middle East $8.44 $9.72 2.9%

Africa $21.10 $34.61 10.4%

Total $1,739.55 $2,404.12 6.7%


2013-2018 Worldwide Game-based Learning Five-year Growth Rates by Region

North A

meric

a

Latin A

meric

a

Weste

rn E

urope

Eastern

Euro

peAsia

Mid

dle E

ast

Africa

0%

5%

10%

15%

2013-2018 Growth Rates by Region


Buying Patterns: 2013-2018 Worldwide Game-based Learning Market by Buyer Segment

Consumers dominate the global Game-based Learning market

Global Game-based Learning by Buying

Segment

2013 Revenues in $US Millions

2018 Revenues in $US Millions

Five Year CAGR

2012-2017

Consumer $1,287.26 $1,586.72 4.3%

PreK-12 $191.35 $336.58 12.0%

Higher Education $17.40 $48.08 22.5%

Government $86.98 $144.25 10.6%

Corporate $52.19 $96.16 13.0%

Healthcare $69.58 $120.21 11.6%

NGOs & Non-Profits $34.79 $72.12 15.7%

Total $1,739.55 $2,404.12 6.7%

Revenues concentrated in

edugame content

Revenues concentrated in

custom services


Buying Behavior is Different in Each Country and Each Buyer Segment

The top buying countries for mobile edugames in 2013 were the US and China. By 2018, China will be the top buyer Gaming consoles finally legal in China as of January 2014

Massive adoption of tablets in the schools across the planet is a major catalyst for Mobile Learning and mobile edugames

In the US, Game-based Learning is ubiquitous in the early grades but starts to taper out in upper middle school New Gamesandlearning.org survey on use of edugames in K-8:

http://www.gamesandlearning.org/2014/06/09/teachers-on-using-games-in-class/#howtochoose

Companies are making volume purchasing and device provisioning easier for the schools: Google Play for Education for tablets and Chromebooks Apple’s Volume Purchase Program for Education






Buying Behavior is Different in Each Country and Each Buyer Segment

The use of edugames in the international corporate segment has always been problematic

Healthcare edugames usually designed for patient education NGOs fund the development of edugames for disease

prevention, social engineering, and the environment HopeLab developed Re-Mission 2 with funding from Vivendi,

Livestrong Foundation, the Entertainment Software Association, Cigna, Genentech, and the Annenberg Foundation.

HopeLab


Buying Behavior is Different in Each Buyer Segment

Government agencies are increasingly paying developers to create edugames (web-based and mobile) for mHealth, literacy, and language learning The US State Department paid The SuperGroup to develop

the web-based Trace Effects edugame: “Gamers interact and solve puzzles in a virtual world filled with diverse English-speaking characters.”


The Road to Revenues is Different in Each Country - China

Hardware and Data Most of China is on 2G, although 4G is growing Data fees are high Smartphone sales rising: 97.5 million shipped in Q2 2014

Monetization: Premium apps not popular in China Google Play not authorized to receive payments

Publishing: Must have a Chinese partner to publish PC or Android app

(illegal to do otherwise) iDreamsky and Yodol provide localization, manage

updates, and publish via their alliances with Tenent, Baidu, and Beintoo

Visibility: more than 200 Android app stores in China Promotion: cannot use Twitter or Facebook


Longitudinal Analysis: The Global Game-based Learning Market Enters Mature Phase

2006-2011

2007-2012

2008-2013

2009-2014

2010-2015

2011-2016

2012-2017

2013-2018

0%

5%

10%

15%

20%

25%

Compound Annual Growth Rates by Eight Forecast Periods

Data based on Ambient Insight’s Game-based Learning reports from 2006 to 2014.


Sweden-based Toca Boca launched their first app in March 2011 and by November 2013 had reached over 50 million downloads Ranked as the number one top

selling educational app in both the Apple app store and in Google’s app store in June 2014

Toca Boca

Mobile Edugames now outsell PC/Console edugames

15 of the 24 Game-based Learning companies funded in 2013 were mobile edugame developers and all of them were developing edugames for young children

Early childhood learning edugames consistently rank in the top ten bestselling mobile apps in almost every country

Learning apps designed for young children usually include gameplay

All Roads Lead to Mobile


Worldwide Game-based Learning Investment Patterns

Leading Indicators


Investment Patterns: 2013-2018 Worldwide Game-based Learning Market

Knowledge Adventure (an industry pioneer) obtained $26.8 million in funding in 2013 and another $13 million in May 2014

Game-based Learning companies garnered $290.8 million in private investment funding between 2010 and 2013


Game-based Learning Catalysts

Game-based Learning companies garnered $85.1 million in private investment funding in 2013

There were 392 Game-based Learning startups listed on the AngelList site as of July 20, 2014:

https://angel.co/educational-games

The Big Players are interested again:

Rosetta Stone launched their game-based Kids Lingo Letter Sounds in September 2013 and the Arcade Academy edugame in October 2013 - “ The first gamified language-learning app for adults”

Houghton Mifflin Harcourt acquired Curiosityville in May 2014. Curiosityville develops games “that teach math and literacy skills to children ages three to eight”





Success: one teacher at a time.

Dreambox Learning obtained $14.5 million in funding in 2013 – They have raised $25.5 million since 2010



Acquired Kids Games Club in 2013 and Chinese edugame company Coco Play in May 2014. Building a catalog by acquisition

TabTale obtained $13.5 million in funding in 2013 – They have over 200 mobile apps for young children.



Edugame Incubators/Accelerators

In 2013, Zynga.org and NewSchools Venture Fund, launched co.lab—"an accelerator that works with startups that are leveraging the power of digital games to build transformative educational technologies.“ http://playcolab.com/

Pearson Catalyst for Education: http://catalyst.pearson.com/

Kaplan EdTech Accelerator: http://kaplanedtechaccelerator.com/#et-overview

http://playcolab.com/

http://playcolab.com/

http://catalyst.pearson.com/



http://kaplanedtechaccelerator.com/#et-overview

http://kaplanedtechaccelerator.com/#et-overview


Kidaptive obtained $10.1 million in funding in 2013: One of the first companies selected by the Co.lab incubator Includes parental controls (Parent's Pad) and “tips on how to

improve learning hurdles, like difficulty in color or shape recognition.”



Fingerprint obtained $10.5 million in funding in June 2014 (from DreamWorks) – They have garnered $20.1 million since 2011 Platform open to third-party developers and brands: “businesses can

use it to break into the rapidly growing mobile playfield.” Has parental controls (“Mom-Comm technology”) Samsung Kids’ Mobile Network Powered by Fingerprint – “games with

an educational twist for kids ages 3 to 7.” http://www.fingerprintplay.com/callforcontent


http://www.fingerprintplay.com/callforcontent

http://www.fingerprintplay.com/callforcontent


What Gets Funded and What Sells?

Free private investment tracking sites identifies company, funding amount, and the investor:

Crunchbase:

http://www.crunchbase.com/

Education VentureBeat:

http://venturebeat.com/category/education/

Free ranking sites track the top selling educational apps and edugames by all platforms and by each country:

App Annie:

http://www.appannie.com/top/iphone/united-states/education/

Distimo:

http://www.distimo.com/leaderboards







http://www.distimo.com/leaderboards


There are differences in buying behavior in each store across the planet.

What Sells? July 10, 2014 Bestselling Educational App Snapshot from App Annie for Canada, the US, and the UK


Q & AThis deck is posted in Ambient Insight’s Free Resource Library at:

http://www.ambientinsight.com/News/PublishedContent.aspx

[email protected]

http://www.ambientinsight.com/News/PublishedContent.aspx

mailto:[email protected]

Tyson Greer - The 2013-2018 Worldwide Game-based Learning and Simulation-based Markets

Education

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