Tyson Greer- Ambient Insight

1. Mobile Edugame Market Innovations Key Findings from Recent Ambient Insight Research Serious Play Conference 2013 August 22, 2013 Tyson Greer, Chief Executive Officer Ambient Insight LLC Ambient Insight 2013

2. Partial List of Ambient Insight’s Clients Ambient Insight is an integrity-based market research firm that uses predictive analytics to identify revenue opportunities for suppliers. Adobe Hasbro   Amazon Houghton Mifflin Harcourt   Amplify IBM   Apple John Wiley & Sons   BlackBerry  McGraw-Hill  Blackboard  Macmillan  British Council  Microsoft  Chungdahm Learning  Oxford University Press  Dell  Pearson  Deutsche Telekom  Qualcomm  Disney  Rosetta Stone  Ambient Insight 2013

3. Agenda  Introductions & Ambient Insight’s Research Taxonomy  Key Findings from Ambient Insight Research  Innovations in Packaged and Custom Content Products & Services  Everybody’s Got Game  Innovative Revenue & Distribution Models Ambient Insight 2013

4. Ambient Insight’s Learning Technology Research Taxonomy Seven International Regions Latin 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 Pilot Fish Media Inc 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 (VAS) Learning Devices Installed Tools & Technology Cloud-based Tools & Platforms These six supplier types map directly to the six subcategories of learning technology products Ambient Insight 2013

5. 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) Kid Genius All in 1 Ambient Insight’s 2013 Learning Technology Research Taxonomy Ambient Insight 2013

6. Key Findings from Ambient Insight Research Ambient Insight 2013

7. Key Findings from Ambient Insight Research - The Market The growth rate for the global Game-based Learning market is 8.3%  In North America: growth rate for all Game-based Learning is 10.1% but for mobile edugames is 15.3% - and from 2012 to 2017 mobile edugames revenues will more than double  Mobile edugame investors were bullish in 2011, showed a spike of interest in 2012, but have held back in first half of 2013  Brands partner with edugame suppliers to increase interaction with the brand via gaining attention on the small screen  Telecoms, device-makers, & NGOs provide Mobile Learning value added services (VAS), except rarely in North America, so far  New suppliers continue to flood the market, and product visibility becomes more difficult. Accelerators continue to proliferate  Although augmented reality (AR) browsers are not yet standard on new mobile devices, AR edugames growth rate is high  Cross-platform products (web & app on device) are increasing.  Ambient Insight 2013

8. Key Findings from Ambient Insight Research - The Buyers Consumers are the top buyers worldwide of edugame packaged content  Suppliers capitalize on consumers’ interests: early childhood education, tourism, health, fitness and wellness, cognitive fitness, nature, and sustainability  Consumer expectations for Mo-So are now a given; Mo-Lo-So continues to grow  Top “selling” (or downloaded) apps are for young children; edugames that offer parental involvement are on the rise  There is a plethora of personal learning devices (PLDs)  Cultural institutions continue to invest heavily in edugames, with a mix of in-house and custom content services  Emergence of easy-to-use mobile game-building tools supports cultural shift towards using game-creation as an educational experience  Ambient Insight 2013

9. Innovations in Packaged and Custom Content “I’ve found that my students are most engaged when they are fighting monsters.” Ambient Insight 2013

10. Knowledge & Skills: Math and Literacy Games Dominate PreK-2 on Smartphones, Tablets, & Game Consoles PopCap Book Worm WeWantToKnow 22Learn Abby Sight Words Go Go Kiddo 12 Fingers Studio KidsZone Studios GuruCool PlaySchool Ambient Insight 2013

11. “The 2012 Content Trench” – Percent of Total Paid Mobile Learning Apps by Target Demographic What’s on the Store Shelves? Consumer-facing Paid Mobile Learning Content Across All Major Application Stores, Platforms, and Devices 40% 35% 31% The vast majority of PreK-2 Mobile Learning content is game-based 30% 26% 25% 20% 15% 12% 9% 8% 10% 6% 5% 5% 3% 0% Ambient Insight 2013

12. Knowledge & Skills: Edugames Engage Middle School and High School Students in Class and Anywhere Filament Games GoCivics Mobile Congress Hakitzu: Code of the Warriors teaches kids to code with JavaScript by customizing their robots via an adaptive learning “Smart Tutor” platform Benesse America StraightAce Ambient Insight 2013

13. Knowledge & Skills: Health & Wellness for Consumers CME Edugames for Healthcare Students & Professionals For healthcare professionals and nursing, dental, and medical students, suppliers create custom reference content, exam prep, skill development content, and packaged content For consumers, health & wellness topics cover alcohol consumption, allergies, anatomy, asthma, brai n fitness, cardiovascular health, cognition, dent al health, diabetes, eme rgency response, environment al risk, exercise and fitness, eye health, food and nutrition, pet care, obesity and Mango Health ACLS Wiz flash cards weight Ambient Insight 2013 loss, pain, smoking cessation, substance

14. Language Learning: Edugames Teach Languages on Smartphones, Tablets, and Game Consoles “Education is going Mobile.” Babbel CEO Markus Witte KunCha Globetrotter (Happy Neuron) Babbel entered US market by acquiring PlaySay March 2013 Play & Learn Chinese (Selectsoft) Ambient Insight 2013

15. Language Learning: Two Global Market Trends Converge and Boost Edugame Sales 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. Learning Edge (US): For $7.95/month, TDS subscribers receive access to content from iknowthat, BTP (Boston Test Prep), Nick Jr, Hoopa, Encyclopedia Britannica. • Spelling Mobile (Brazil): Based on a TV game, for $2.99/week users practiced then competed for £ 3000 to £ 15,000 in prizes from Global Brands and Vivo. One month: 230,000 users. • Fun Park (China): The Smartfun Digital joint venture between Chungwa Telecom (75%) and United Daily News Group (35%) offers edugame content • Ambient Insight 2013

16. Language Learning: Converging Product Types Boost Engagement (and Sales) Top selling apps across the planet are: Edugames for young children & language learning apps. Add in AR! Mindsnacks gained $6.5 million from Sequoia to create personalized learning experiences for Sesame Workshop added augmented reality using Qualcomm’s Vuforia platform to power Big Bird’s Words text recognition game. kids (DreamIt Ventures accelerator grad) Elmo’s AR Alphabet Challenge Ambient Insight 2013

17. Language Learning: Using Music and Rhythm Learn to read Japanese characters by learning patterns in time to a chip-tunes soundtrack with Hiragana Pixel Party Microsoft Research’s Tip Tap teaches tonal subtlety and proves viability of mobile micro-training of Mandarin Ambient Insight 2013

18. Location & AR: Museums Create Digital Media Departments and Also Buy Content Services Visitors to these 29 Canadian museums play an interactive quest mobile game Asian Civilizations Museum, Singapore, claims to be the 1stto combine AR, location-based game, and interactive features in this iPad app about the Terracotta Warriors: First Emperor and His Legacy exhibit. Ambient Insight 2013

19. Location & AR: Museums Create Digital Media Departments and Also Buy Content Services Asian Civilizations Museum in Singapore claims to be 1stto combine AR, location-based game, and interactive features in this iPad app for the Terracotta Warriors exhibit Ambient Insight 2013

20. Brain Trainers and Cognitive Fitness Apps: Typically Target Older Adults, But Not Always Devilish Brain Training, the latest version of Brain Age, addresses digital distraction with a game to improve concentration on Nintendo 3DS Vivity Labs’ adaptive FitBrain app launched in iOS store December 2012 – 1 million copies in first 60 days (free or subscription) Sparky’s Adventures, by Vivity Labs, released 2013. Subscription per child 3, 6, or 12 mos, or lifetime • • Sparky’s Adventures Ambient Insight 2013

21. Everybody’s Got Game User-generated content and the “Creator Economy” Ambient Insight 2013

22. Tools: Trend Towards the Creator Economy User Generated Content and User Generated Games “When students become producers, they engage in active, critical and committed learning, experience visual and textual literacy and understand semiotics” James Paul Gee, 2006 ARTLAB+ Game Design – at a four-day camp at the Hirshhorn Museum in Washington, DC, teens made location-based mobile games and learned art interpretation and game design • Global Kids - a New York City in-school and after-school program, where kids learn game design skills and global issues; and built location-based history edugame with New York City Library • Ambient Insight 2013

23. Tools: Easy-to-use Tools Are Available for Students to Create Their Own Games, and Learn from Doing It Gaming the classroom:  Scratch - free game-building tool from MIT enables students to create and share games.  ARLearn Toolkit – Cloud-based suite for learners and educators that combines field trips, RPG, and classroom response systems  Games MOOC III: MOOC teaches educators about resources needed to create a game or game project using apps, AR, and ARGs  Putting yourself into the picture:  Disney Infinity Toolbox create video with Disney characters  Digital Infinity Action! – engages players in creating a virtual world and adding real-life people to the videos they create  Players customize Appa Apps’ photo-based language and numeracy learning edugames with their own photos, video, and voice; then share  Ambient Insight 2013

24. Changing the “Learning-game-as-babysitter” Model, Before It Backfires AppyZoo (Stickery) apps collect usage data to create progress reports for parents. October 2011, Google Ventures and 500 Startups awarded the company $350K in seed funding • KidZone Studios’s GuruCool PlaySchool provides a centralized view of a child’s progress and suggests “strategies and activities” to parents • PBS brand released free PBS Play & Learn math & literacy skills edugame “specifically for parents,” to play with toddlers and reported 162,000 downloads in the first month • Fingerprint Digital’s in-app Mom-Comm system, provides a built-in sharing platform and daily news feeds for parents. Raised $7.7 million in September 2012 from Corus Entertainment Ambient Insight 2013

25. Explosion of Medical Sensors Creates Opportunities for Knowledge & Skills Game-based Mobile Learning Humana Innovation Center collaborated with Tellart to build web-connected interactive objects and environments such as Dancetown, Humana Fishtank, and Yoga Game Ball, which transforms a yoga ball into a game controller “that takes the classic fun of arcade games and gives it a twist.” Irish startup Galvanic created the Relax & Race app that use a Bluetooth- enabled galvanic skin response sensor as a game controller to teach stress reduction. Ambient Insight 2013

26. Personal Learning Devices Proliferate Across the Globe Telecoms partner with 3rdparty content providers and NGOs to deliver learning directly to consumers and to institutions with Mobile Learning Value Added Services (VAS). SK Telecom has gone further with an educational robot, Atti FuHu’s Nabi Atti demo at GSMA Connected Living Summit 2013, Shanghai OLPC XO3 Tablet Ambient Insight 2013

27. Innovative Revenue and Distribution Models New Opportunities New Challenges Ambient Insight 2013

28. Incubators and Accelerators are Proliferating Providing Financial Support and Connections to Experts & Capital May 2013, Zynga.org commits $1 million for “Edtech Game Accelerator” to focus on learning games in partnership with NewSchools Venture Fund. Motion Math is one of three startups in Zynga.org’s 2013 cohort. Motion Math Kaplan EdTech Incubator, powered by TechStars, offers $20K investment, June – September co-location in New York City, market insights, mentorships, access to Kaplan’s Learning Science group… Rock Health opens in 2013 and claims to be “The first seed accelerator for digital health startups” Ambient Insight 2013

29. Innovative Revenue and Distribution Options The price of mobile apps is dropping. The revenues are rising. Revenue Models: Distribution Channels:  In-app purchases - virtual goods  Amazon Appstore added in-app purchasing (2012) and HTML5 apps (2013)  Sponsorships nonprofits & commercial  Digitization trend  Partner with telecoms and device-makers  Submit products to commercial digital libraries adding mobile content, e.g. OverDrive  Ads  Partner with home school suppliers, device makers, publishers, and telecoms  Subscription services  Micropayments - virtual items  Free, lite, and premium  Proliferation of specialty app stores  Real-world goods  Personal Learning Devices Ambient Insight 2013

30. Playsourcing and Business Models XEOPlay: uses “playsourcing” in a virtual world game to plant trees in the real world via NGO WeForest.org Duolingo: “no fees, no ads, no gimmicks” – supplies players “free” translations to paying clients Ambient Insight 2013

31. End of the Day Thoughts: Where Is Mobile Edugaming Going? S.M.T.H. a “sport” game for measuring distance Ambient Insight 2013

32. Q & A This presentation, the “Mobile Edugame Market Innovations 2013,” past presentations, and our Learning Technology Research Taxonomy can be downloaded from Ambient Insight’s Free Resource Library at: http://www.ambientinsight.com/News/PublishedContent.aspx Ambient Insight 2013