“Innovations in the Global Mobile Edugame Market” By Tyson Greer- Serious Play Conference 2012

1. Innovations in the Global Mobile Edugame Market Key Findings from Recent Ambient Insight Research Serious Play Conference 2012 August 22, 2012 Tyson Greer, Chief Executive Officer Ambient Insight LLC Ambient Insight 2012

2. Introductions Ambient Insight is an integrity-based market research firm that uses predictive analytics to identify revenue opportunities for suppliers. Ambient Insight founded in 2004 by Microsoft Training and Certification veterans that built the Microsoft Online Institute (MOLI) International “boutique” analysis firm specializing in quantitative analysis, learning technology forecasts, M&A analysis, and competitive intelligence Ambient Insight tracks learning technology buying behavior across the planet. We have buying behavior profiles for 82 countries Ambient Insight…  Does not evaluate, compare, or rank the effectiveness of learning technology products  Does not endorse or promote companies or products     Ambient Insight 2012

3. Agenda Introductions & Ambient Insight’s Research Taxonomy • Key Findings from Ambient Insight Research • Knowledge-based Learning & Skills-based Learning • Language Learning • Location-based Learning & Augmented Reality • Everybody’s Getting into the Game • Innovative Revenue & Distribution Models • Ambient Insight 2012

4. Ambient Insight’s Learning Technology Research Taxonomy Seven International Regions South America Western Europe Eastern Europe North America The Middle East Africa Asia Have Eight Buyer Segments State - Local Government Higher Education Corporations - Businesses Associations & Non-Profits Federal Government Consumer PreK-12 Healthcare That Buy Eight Types of Digital Learning Products Collaboration- based Learning Simulation- based Learning Self-paced eLearning Courseware Digital Video, Text, & Audio Reference Cognitive Learning Social Learning Game-based Learning Mobile Learning From Six Types of Suppliers Custom Content Packaged Content Value Added Services Learning Devices Installed Tools & Technology Software as a Service (SaaS) These six supplier types map directly to the six subcategories of learning technology products Ambient Insight 2012

5. Key Findings from Ambient Insight Research Ambient Insight 2012

6. Six Types of Mobile Edugame Learning Products Ambient Insight forecasts revenues for six types of Mobile Edugames:  Knowledge-based games  Skills-based games  Brain trainers and cognitive fitness games  Language learning games  Location-based learning games emerged in 2009  Mobile augmented reality games emerged in 2010 SuperBetter Ambient Insight 2012

7. Key Findings from Ambient Insight Research - The Market  The growth rate for the Worldwide Game-based Learning market is 15.4%  Revenues will more than double from 2011 to 2016, and are concentrated in China, South Korea, US, and Japan.  Telecoms & NGOs provide Mobile Learning value added services (VAS) to consumers with game- based learning content from third-party suppliers.  Emergence of mobile game-building tools supports growing interest in creating edugames.  Involvement of academic institutions in game- based learning initiatives and entrepreneurial accelerators are catalysts for the edugame market. Ambient Insight 2012

8. Key Findings from Ambient Insight Research The Buyers • Consumers are the top buyers worldwide of Mobile Learning packaged content. – Consumer demand for Mo-So and Mo-Lo-So energizes the market for game-based learning content – Suppliers capitalize on consumers’ interests: early childhood education, tourism, health, fitness and wellness, cognitive fitness, nature, and sustainability – Consumers buy language learning products • Museums have new job positions focused on engaging/educating their audiences, and they do it with Mo-Lo-So games • Emergence of easy-to-use mobile game-building tools supports cultural shift towards using game- creation itself as an educational experience Ambient Insight 2012

9. Knowledge-based & Skills-based Mobile Games Knowledge is memorizing. A skill is applying knowledge. Ambient Insight 2012

10. Pharmas Buy Custom Content Services from Suppliers for Patient Education and Product Promotion Pfizer has released several disease-awareness apps, including the iPhone Les Meningo game InViVo Communications creates custom games for trade shows and launch events International awareness app from Sanofi- Aventis Ambient Insight 2012

11. For Medical Professionals: Reference Content, Exam Prep, and Skill Development Suppliers create custom content and packaged content for nursing and medical students, and healthcare professionals Legacy Interactive has partnered with Elsevier (Top Doc, visual diagnosis iPhone quiz) and Pearson (virtual world games, quizzes, and tips) Bennoit Essiambre (Speed Anatomy) Epocrates Ambient Insight 2012

12. For “Expert Patients”: Who Want Answers and to Play an Active Role in Their Wellness HealthTap received $11.5 million in 2012 “to gamify the process of doctors answering health questions.” Docs earn reputation points.” Men’s Health made nutrition advice palatable. Ambient Insight 2012

13. Trends: Escalating Enthusiasm for Fitness The Affordable Care Act includes $10 billion for disease prevention and health promotion over the next 5 years. Health games are a tool. InViVo Suppliers tout cognitive fitness games “backed by science” Leading suppliers in the brain fitness industry are: Posit Science, Dakim, CogniFit, Scientific Learning, Lumos Labs, and Vivity Labs. Ambient Insight 2012

14. Gesture-based Learning Can Turn Ordinary Learning Experiences into Extra-ordinary Immersive Education Namco Bandai Games’ “Body and Brain Connection” for Kinect Humana“Dance Town” Topics cover alcohol consumption, allergies, anatomy, asthma, brain fitness, cardiovascular health, cognition, dental health, diabetes, emergency response, environmental risk, exercise and fitness, eye health, food and nutrition, pet care, obesity and weight loss, pain, smoking cessation, substance abuse, and safety Ambient Insight 2012

15. Edugame Market for PreK-12 Learning is Expanding Rapidly Fingerprint’s Whole Wide World game Pokemon Typing Adventure Nat Geo Wild TV for Kinect PiMZ’s Letter School Ambient Insight 2012

16. Moving Edugames from Euphoria (Sensory Stimulation) to Eureka (Intellectual Discovery) October 2011, Google Ventures and 500 Startups awarded Stickery $350K in seed funding. Stickery aims to change the model of learning-game- apps-as-babysitter to increasing parental involvement in the kids’ learning experience via personal metrics data. iPhone App Store stats: #1 in iPhone Education. Top in-app purchases. Stickery’s Mermaid Waters math game Ambient Insight 2012

17. Language Learning Mobile Games Parlez-vous Anglais? Ambient Insight 2012

18. Top Selling Apps Across the Planet are Edugames for Young Children & Language Learning Apps The top buying country in the world for Digital English Language Learning products is. . . The United States. Little Pim, a Chinese language learning game from PBS Kids ASL Spelling Game Mind Snacks teaches vocabulary Ambient Insight 2012

19. Two Global Market Trends Converge and Boost Sales of Language Learning Edugames Market is expanding rapidly for digital Language Learning products, particularly English fluency and literacy. Telecoms, nonprofits, and third party suppliers are delivering Value Added Services (VAS) directly to consumers. • Soletrando (Brazil ): based on a game show, to improve Portuguese spelling from Vivo (telecom), Oglobo (newspaper), and La Mark • BBC Janala (India): mobile subscription, TV drama, and game show for 2 cents/per 3 minutes from English in Action, BBC • English Bean (Indonesia): web and mobile content includes Facebook games to learn English from SK Telecom Ambient Insight 2012

20. Location-based Mobile Learning Games Mobile-Local-Social “Mo-Lo-So” Ambient Insight 2012

21. Definitions from Ambient Insight’s Research Taxonomy Location-based Learning is based on location-based services (LBS) technology. It is a type of knowledge transfer enabled by wirelessly-networked interfaces and sensors responding to the actions of a user at a specific location in space and time to create a situated learning experience… Augmented Reality utilizes computer- generated images, schematics, audio, multimedia, historical context, location data, and other forms of content overlaid on real- world objects that are manipulated by users holding a mobile phone or wearing head- mounted display devices. Ambient Insight's Research Taxonomy Ambient Insight 2012

22. Mobile Location-based Learning: The Shift from Distance Learning to Proximity Learning Proximity Perimeter (Geofence) Location- based Learning Triggers LBL Physical Presence: Location in Space and Time Anchors LBL Markers Location- based Learning Objects One of the interesting innovations in Location-based Learning is the inclusion of the dimension of time as well as space. Ambient Insight 2012

23. Blended Product Types: Location-based Learning + Mobile Augmented Reality Learning Edugames November 2011, PBS Kids releases multiplayer Fetch! Lunch Rush mobile edugame: “Teaches basic math skills by challenging players to fill a film crew’s sushi orders.”  Player with the fastest time wins.  “Room to run” is in the list of requirements.  iTunes Review: “Had lots of fun playing this with my little one. Just spread the numbers out in a few rooms and watch them run like crazy.” Ambient Insight 2012

24. Tourist Get to Know Cities They Visit With Augmented Reality, They Can Go Back in Time Augmented Reality games let tourists view a city “Then” and “Now.” La Mosca developed the 1ST urban mystery- adventure, hyper-local GPS learning games. 7th Floor Media “Vancouver” AR Ambient Insight 2012

25. Augmented Reality Enables “Place-based Learning” and “Time-based Learning” bigBigBang - Historic Market St. in San Francisco uses archival film footage from 1906 (before the earthquake and fire that same year.) Full disclosure: not really a game. Museum of London - StreetMuseum Ambient Insight 2012

26. The Gallery Tag Game at the Brooklyn Museum is a Mo-Lo-So Interactive Scavenger Hunt All the tags go into the online collection, bridging virtual and physical worlds. Ambient Insight 2012

27. Hyper-local Edugames Use Mobile Mystery or Adventure Stories to Engage Users with Their Surroundings Clients for Urban Interactive’s reality “Amazing Race”-style urban mission augmented reality adventures include: corporations, government, higher ed, nonprofits, and consumers. Mentira isa mobile location- based, language learning, mobile mystery game from the University of New Mexico Ambient Insight 2012

28. Game-based Learning on Location Challenges Users To Compete Virtually or Locally The North American growth rate for mobile location- based edugames is a breathtaking 77.2% and revenues will reach $25.1 million by 2016. Parks Canada Humana’s Horsepower Challenge Ambient Insight 2012

29. Fitness Buffs Take Their Exercise on the Road, Virtually Bit Gym’s “Virtual Active” for iPads fits on cardio equipment for a solo fitness adventure Collaborate with friends to summit the world’s highest peak or hike the Inca Trail… at your bus stop, at your desk, in your backyard. Bonnier R&D & Ammunition Ambient Insight 2012

30. Everybody Is Getting into the Game Easy-to-use tools enable the “Creator Economy” to flourish Ambient Insight 2012

31. Trend: Becoming Creators Rather than Consumers User-generated Content and User-Generated Games The US military agency DARPA invited anyone to play their mobile “disaster” game CLIQRQest and learned how people could use social media to organize and coordinate resources. GPS Mission worldwidegame platform by Orbster GmbH enables users to create their own mission game around their location. GameSalad raised $6 million in 2011 and created their “drag and drop” game development tool “to make everyone a game developer.” Ambient Insight 2012

32. Innovative Revenue and Distribution Models New Opportunities New Challenges Ambient Insight 2012

33. The Rapid Rise of Mobile Learning Value Added Services (VAS) Creates New Opportunities for Edugames In 2010, Ambient Insight identified a new type of product: Mobile Learning VAS, which are coming on the market at a rapid pace across the globe, particularly in developing countries. Nigeria – MNT Education Bundle: Consumers can purchase a netbook or laptop bundled with English, math, and science edugames; Encyclopedia Britannica; learning tools, & access to educational content.  Ambient Insight 2012

34. 2008-2011 Explosion of Mobile Learning Value Added Services (VAS) Products Mobile Learning VAS Products 100 90 80 70 60 50 40 30 20 10 0 2008 2009 2010 2011 On average, 5-6 new Mobile Learning VAS products are launched every month. Most of them are sprouting up in developing economies. This has major implications for the Mobile Learning industry. Suppliers in developing countries are now driving the innovation in Mobile Learning. Ambient Insight 2012

35. Innovative Revenue and Distribution Options The price of mobile apps is dropping. The revenues are rising. Distribution Channels: Revenue Models:  Trend to digitization is worldwide  Sponsorships nonprofits & commercial  Amazon Appstore adds in- app purchasing (2012)  Advertising  Submit products to commercial digital libraries adding mobile content, e.g. OverDrive  Subscription services  Micropayments for virtual items  Partner with home school suppliers, device suppliers, publishers, and carriers  In-app purchases  Free, lite, and premium  Dozens of specialty app stores across the planet Ambient Insight 2012

36. Q & A Ambient Insight’s Free Resource Library at: http://www.ambientinsight.com/News/PublishedContent.aspx Tyson@ambientinsight.com Ambient Insight 2012