Tyson Greer - Mobile Edugame Market Innovations 2014

1. Mobile Edugame Market Innovations 2014 Key Findings from Recent Ambient Insight Research Serious Play Conference 2014 July 23, 2014 Tyson Greer, Chief Executive Officer Ambient Insight LLC Ambient Insight 2014

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   Blackboard  McGraw-Hill  BrainPOP  Macmillan  British Council  Microsoft  Cambridge University Press  Oxford University Press  Chungdahm Learning  Pearson  Cisco  Qualcomm  Disney  Rosetta Stone  Ambient Insight 2014

3. Agenda  Introductions - Research Taxonomy  Key Findings from Ambient Insight Research  Innovations in Edugame Content Products & Custom Services  Trends to Watch  Show me the Money Ambient Insight 2014

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 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) Ambient Insight’s 2014 Learning Technology Research Taxonomy Ambient Insight 2014

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) Clever Goats Ambient Insight’s 2014 Learning Technology Research Taxonomy Ambient Insight 2014

6. Key Findings from Ambient Insight Research Ambient Insight 2014

7. Key Findings from Ambient Insight Research - The Market The growth rate for the global Game-based Learning market is 6.7%  In North America: growth rate for all Game-based Learning is 7.6% , but for mobile edugames is 12.5% - and from 2013 to 2018 mobile edugames revenues will nearly double  Consumers still dominate packaged content purchases, the academic market is growing, and nonprofits and government continue to buy tourism-related content services  Mobile edugame investors were bullish in 2011, showed a spike of interest in 2012, slowed in 2013, and steady in H1 2014  New suppliers continue to flood the market, and product visibility becomes increasingly difficult  Cross-platform products (connecting web & app on device) still increasing  Telecoms, device-makers, & NGOs provide Mobile Learning value added services (VAS), except rarely in North America, so far.  Ambient Insight 2014

8. Key Findings from Ambient Insight Research - The Buyers Suppliers capitalize on consumers’ interests: early childhood education, tourism, health, fitness and wellness, cognitive fitness, nature, and sustainability  Top “selling” (or downloaded) apps are for young children; edugames that offer parental involvement are on the rise  Explosion of personal learning devices (PLDs) and tablets fuel the market  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  Government entities escalated awareness about protecting privacy of children, and updated regulations and guidelines.  Ambient Insight 2014

9. Ambient Insight 2014

10. Personal Learning Devices Proliferate Across the Globe Amplify Tablet System bundles Classroom Tools, content and apps, filtering, MDM, and implementation support LeapFrog’s new LeapTV living room console with educator-approved games and videos for 3- 8 year olds Kurio 7S (kidSAFE+ seal) OLPC XO-10 Tablet with Bluetooth-enabled keyboard Ambient Insight 2014

11. Mobile Edugames Inhibitors v. Opportunities  Partner with Big Players (profit or nonprofit) Discoverability  So many apps, so many app stores  Market in multiple media  Join publishing programs Academic inhibitors  Fragmentation of the market  Lack of teacher support  Social and cultural structures: enough & which devices? or are devices banned?  Attitudes: educators and teens Map content to standards (CCSS, Next Generation Life Science Standards…)  Offer professional development to educators  Seek sponsorship from 3rd parties  http://www.gamesandlearning.org/2014/06 /09/teachers-on-using-games-in-class/ Ambient Insight 2014

12. Combining Common Core & Teacher Support & User- generated Content Lack of teacher training in how to use edugames in (or out of) the classroom inhibits sales July 2, 2014, Imaginary Number Co over-achieved $42K Kickstarter campaign to bring Mathbreakers to Android and iPad tablets - Classroom setup free for 3 months - Lesson plans & level editor $25 Teacher Dashboard: assign game levels and student track progress https://www.mathbreakers.com/lessons/Trial %20Lesson/ Ambient Insight 2014

13. Innovations in Edugame Content Products and Custom Services Ambient Insight 2014

14. Knowledge & Skills: Products for PreK-2 Dominate the North American Edugame Market Sight Words in Space by Clever Goats Gummii Math Educational Games , the first to crack iPad Top 25 in Canada. Funbrain Jr, early math, literacy, problem-solving web & app published by Pearson Education Ambient Insight 2014

15. “The 2013 Content Trench” – Percent of Total Paid Mobile Learning Apps by Target Demographic What’s on the Store Shelves? Consumer-facing Paid Mobile Learning Content (All Apps Including Edugames) Across All Major Application Stores, Platforms, and Devices 40% 34% 35% The vast majority of PreK-2 Mobile Learning content is game-based 30% 28% 25% 20% 15% 10% 10% 8% 6% 6% 5% 5% 3% 0% Ambient Insight 2014

16. Knowledge & Skills: Combining Critical Thinking Skills with Knowledge-based Learning Opportunities ELA + STEM = Argubot Academy GlassLab + NASA launched an iPad adventure CCSS-based (STEM) game to develop critical thinking skills and interest in science. Ambient Insight 2014

17. Knowledge & Skills: Interest in Coding Levels Up CargoBot for 5+ uses a moving crane to shift boxes and use coding concepts like loops, procedures, and debugging. Hakitzu: Elite, an update to the original, teaches STEM skills and the next level of coding. “Teacher’s Pack” offers guidance and lesson plans. Ambient Insight 2014

18. Knowledge & Skills: Includes “Life Skills” for Students Parents and schools buy Social & Emotional Learning skills (SEL) edugames to develop children’s emotional intelligence IF… (If You Can Company) SEL role-play, decision-making adventure game for ages 9-11, includes a Parent’s menu. Ambient Insight 2014

19. Knowledge & Skills: Health & Wellness for Consumers CME Edugames for Healthcare Students & Professionals For consumers, health & wellness topics include alcohol, allergies, anatomy, asthma, brain fitness, cardiovascular health, dental health, diabetes, exercise & fitness, food & nutrition, pet care, obesity & weight loss, pain, smoking cessation, substance abuse, and safety TAO WellShell isometric fitness device over-achieved Kickstarter $100,000 goal For medical students, “Osmose with Your Friends” crowd-sourced game from 2013 DreamIt Health tech accelerator Ambient Insight 2014

20. FDA Intends Discretion When Regulating Mobile Medical Apps as Devices  FDA identified examples of mobile apps for which the FDA will “exercise enforcement discretion” (6/11/14)  http://www.fda.gov/MedicalDevices/ProductsandMedicalPro cedures/ConnectedHealth/MobileMedicalApplications/ucm36 8744.htm  The list identifies 24 types of apps including those that:  Provide prediabetes patients with tools or guidance to create healthy habits  Use video games to motivate patients to do their physical therapy exercises  Are intended for individuals to make decisions or offer behavioral suggestions related to health or wellness (including “use social gaming to encourage healthy lifestyle habits”) – but are NOT marketed as diagnosis or treatment. Ambient Insight 2014

21. Brain Trainers and Cognitive Fitness Apps: New Players Continue to Enter the Market Lumos Labs, Rosetta Stone (Vivity Labs), Nintendo, and Cogmed dominate North American market  Lumosity with 60 million iOS users, and just now launches on Android  Master of Words PRO ($2.99) #1 on Amazon US-Games-Free category (not just edugames) after “daily deal”  Brain+ (beta in Denmark, Jan 2013) entered North America and UK markets (July 2014) with 3 “scientifically-proven” games, including Remember Me. Remember Me, Brain+ Ambient Insight 2014

22. Language Learning: Edugames Teach Languages on Smartphones, Tablets, and Game Consoles Memrise has 1 million active users for language and other courses with crowd-sourced content Ubisoft’s language coaching apps for Nintendo Dora’s Worldwide Rescue Spanish vocabulary for age 4 Ambient Insight 2014

23. 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! Elmo’s Alphabet Challenge by Sesame Street, one of the first AR edugames Sesame Workshop updated AR “Word-o-Scope” letters game with email-able word labels & game ideas to extend learning beyond the app Ambient Insight 2014

24. Location-based Learning: Venues, Brands, and Suppliers Create Cross-platform Promotions Tourist attractions create or sponsor location-based treasure hunts Edinburgh International Science Festival built a free city-wide “Sci Quest” edugame  Sainted Media’s free multimedia Global Treasure Apps offer “real-world rewards” in the sponsor’s gift shop or café venue  Students visiting the Minnesota Historical Society use Play the Past app during field trips to museum and back in the classroom. Brands also use game apps to engage customers and/or “edu-sell” Marriott hired evviva games to create XPLOR scavenger hunt/arcade game/puzzles app for 5 cities. Includes “in-game economy” enabling users to buy and sell goods.  Microsoft and DreamWorks teamed to create a free (no IAP) road trip app Dragon Adventure World Explorer, using Here Maps technology, Weather Channel data, and Foursquare popularity. SDK coming soon.  Ambient Insight 2014

25. Augmented Reality: Making History, Science, Math, and Reading Come Alive Qualcomm’s Vuforia Platform used by brands, developers, content owners for advertising, publishing, gaming, tourism, education… Math-based games for kids 6-9, from PBS KIDS funded by US Dept of Education AR Freedom Stories bring US/Canadian Underground Railroad to life Ambient Insight 2014

26. Trends to Watch Ambient Insight 2014

27. Trend: Tools for the Creator Economy User-Generated Games and User-Generated Content TinyTap is a platform for anyone to create edugames, which can be published on the TinyTap Market, AppStore, Google Play, and Web Futuba Classroom Games includes question sets. Students & teachers can use their own images, audio, and text to add to the question bank. TinyTap Space Game uses Stroop Effect Playingmondo.com - find or build virtual playgrounds and use Mondo builder to create location-based games Ambient Insight 2014

28. Trend: Supporting “Mobile Parenting” with Communications and Data Suppliers provide connection and data to parents to counter their concerns (guilt) of “cellphone-as-babysitter” and their desires for quality educational/play experiences Kindergarten Readiness (FunBrains Jr) - interactive parent skills checklist  IF… - Parents’ Menu, schedule frequency of updates  GuruCool PlaySchool (KidZone Studios) - provides view into child’s progress, suggests activities and daily tips  PBS Play & Learn - math & literacy skills edugame “specifically for parents”  Fingerprint Digital - Mom-Comm with in-app messaging  National Geo’s Animal Jam – companion website has a Dashboard for parents  Ambient Insight 2014

29. Trend: Data & Privacy The Two-Edged Sword Developers and platform-providers are creating new ways to mine data What does “big data” mean in edugames for children? Opportunity Watch Out For… To deliver a child’s progress data to parents: to boost their engagement and product satisfaction Collecting data without obtaining parental consent To accumulate a treasure-trove of users’ gameplay data: to make improvements or drive new product features Collecting data without obtaining parental consent To provide a more personalized learning experience Collecting data without obtaining parental consent To transmit data to third parties (e.g. ad network, analytics company) Transmitting, sharing data without obtaining parental consent Ambient Insight 2014

30. Trend: Data and Privacy New FTC COPPA Rules Can Be Costly The Federal Trade Commission (FTC)’s Children’s Online Privacy Protection Act (COPPA) rules have teeth Fine potential = $16,000 per incident  Prosecutions:  – May 2011: Playdom, $3 million settlement – June 2012: New Jersey Attorney General sued 24x7digital – Feb 2013: Path, $800,000 settlement New rules went into effect July 2013  Expanded privacy definitions include: geo-tagging, behavior targeting, and (closing the 3rdparty loophole) ad network cookies and social networking  Approved “Safe Harbor” self-regulatory programs Ambient Insight 2014

31. Trend: Data & Privacy FTC-approved “Safe Harbor” Programs There are now 6 FTC-approved Safe Harbor programs that provide certification that members adhere to COPPA rules: • Aristotle International, Inc. • Children’s Advertising Review Unit • ESRB Privacy Certified • kidSAFE+ • Privacy Vaults Online, Inc (DBA PRIVO) • TRUSTe Some suppliers identify themselves as “family friendly” and respecting children’s privacy by displaying seals of approval such as the “Know What’s Inside” from MOMs with apps. http://www.momswithapps.com/about) Ambient Insight 2014

32. Data and Privacy: California Publishes New Guidelines 2003: California Online Privacy Protection Act (CalOPPA) - the first law in US to require a conspicuously posted privacy policy for web & apps 2013: Attorney General of California’s guidelines reinforce the FTC’s “privacy by design” approach and the Organization for Economic Development’s (OECD) “Fair Information Practice Principles,” (FIPPs) with a couple of new twists: 1. Recommendation to encrypt transmissions of PII (personally identifiable information) includes apps downloaded or used. 2. Introduce a new term “surprise minimization,” meaning to “minimize surprises to users from unexpected privacy practices. 2014: New guidelines… Ambient Insight 2014

33. Trend: Data and Privacy Canada Aligned with EU Rules The Personal Information Protection and Electronic Documents Act (PIPEDA) enforces European Union’s privacy directives (collection, use, retention and disclosure of personal information)  Under the United Nations 1989 Convention on the Rights of the Child, privacy is a basic human right for everyone under the age of 18.  Office of the Privacy Commissioner of Canada (OPC) has focused on children's online privacy as a priority. Some Canadian provinces (Alberta, B.C., Quebec, and Ontario) also legislate data protection. Ambient Insight 2014

34. Trend: Smart Toys for Skills-based Learning and Learning 21stCentury Skills Uboly uses a smartphone for a “brain” Tiggly iPad apps are free; shapes are $29.99 Tangible Play’s Osmo add-on for iPads https://vine.co/v/Mw BYjYi1WeX SK Telecom smart toy teaches language arts Kids get to program the Play-I “robots” Ambient Insight 2014

35. Trend: Wearables + Edugames Coming Soon… “Ok Glass… Reform Education” Suppliers such as Duolingo and Word Lens have ported their Mobile Learning language and translation apps to Google Glasses Oculus Rift offers opportunity for immersive learning experiences Top 100 Game Tech Trends http://www.develop- online.net/news/the-top-100- tech-in-games- revealed/0194694 Ambient Insight 2014

36. Innovative Revenue and Distribution Models New Opportunities New Challenges Ambient Insight 2014

37. Incubators and Accelerators are Proliferating Providing Financial Support and Connections to Experts & Capital May 2013, Zynga.org committed $1 million for “Edtech Game Accelerator” to focus on learning games in partnership with NewSchools Venture Fund. Motion Math and Kidadaptive were in Zynga.org’s 2013 cohort. Tiny Tap and Kiko labs in 2014. 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 opened in 2013 and claims to be “The first seed accelerator for digital health startups.” Ambient Insight 2014

38. Innovative Revenue and Distribution Options New app promotion services and new marketplaces Revenue Models: Distribution Channels:  Sponsorships (nonprofits & commercial brands)  Channel partners (BrainPOP, Edmodo, Learning.com, Florida Virtual School…)  Free, lite, and premium  Specialty app stores & programs  Subscription services  Partner with telecoms and device-makers  Public libraries  Commercial digital libraries adding mobile content, e.g. OverDrive  Crowdfunding  Ads  Partner with virtual schools, home school suppliers, device makers, publishers, and telecoms  Real-world goods  In-app purchases - virtual goods/ micropayments for virtual items  Personal Learning Devices Ambient Insight 2014

39. Revenue and Distribution: Brought to You by the Letter “S” for Subscriptions Sesame Street S’More is a bi-monthly interactive digital magazine for kids (ages 4+) March 2014 released subscription-based (in-app purchases £ 2.49; or auto- renewable £1.99)  Includes “together time” tips for parents  Allows children to record their voices in different languages  Ambient Insight 2014

40. Revenue and Distribution: Playsourcing - Games for Giving Back Play to Cure – Genes in Space Gamers steer a course to collect “Element Alpha,” through genuine DNA microarray data. Collective flight path gameplay contributes to massive data crunching behind the app to analyze real genetic data. Feed-A-Pet –For every level a player completes, the Pet Project donates money to feed homeless pets in need. (Donations funded by ads) Ambient Insight 2014

41. Q & A This presentation, the “Mobile Edugame Market Innovations 2014,” 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 2014