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With a mobile boom, learning games are a $1.5B market headed toward $2.3B by 2017 (exclusive)

Above: Teach With Portal

Image Credit: Teach With Portal

Educational games, also known as “serious games,” are going through a renaissance in part because of the acceptance of learning apps on mobile devices. That’s the finding of a new research report by Ambient Insight.

The forecast predicts the Serious Games market, which Ambient calls game-based learning, will grow from $1.5 billion in 2012 to $2.3 billion in 2017. The larger simulation-based learning market, which includes corporate training games, is expected to grow even more from $2.3 billion in 2012 to $6.6 billion in 2017. Altogether, the learning games market will grow from $3.9 billion to $8.9 billion in 2017. Much of the growth will come from apps that target the mobile market.

“Mobile has re-energized the market,” Adkins said.

Ambient Insight will unveil the data at the Serious Play Conference next week in Redmond, Wash. Sam Adkins, chief research officer at Ambient Insight, said in an exclusive interview with GamesBeat that game-based learning companies raised more than $111.7 million. The larger educational game market — including corporate training and educational consumer games — raised more than $1.5 billion in venture capital, more than at any time since the dotcom craze.

“For all of the eight combined learning markets we cover, that was the highest amount of money invested in learning capital ever,” Adkins said. But he noted that game-based learning is a small subset of that. He defines game-based learning as products that teach knowledge through gameplay (including some form of competition against oneself or others) and a reward/penalty system that functions as an assessment method. That includes games such as Teach With Portals, (pictured) a way to teach physics based on Valve’s Portal and Portal 2 video games.

Adkins sees two very different markets. The corporate training games include simulation programs that train people how to do their jobs, particularly in fields like healthcare where workers have to learn how to use expensive equipment. Game-based learning, on the other hand, focuses on teaching knowledge to kids or general consumers.

Both fields have had a rich history. Nintendo took game-based learning to a new level in 2005 when it launched Brain Age: Train Your Brain in Minutes a Day, on the Nintendo DS handheld. That game and its variants sold more than 37 million copies. JumpStart’s Math Blaster game has taught children about math for years, and now it has a mobile version. Today, companies like Lumos Labs (maker of Lumosity), MindSnacks, Tiny Tap, and Vivity Labs (maker of FitBrains) are carrying on that tradition. Across the spectrum of learning companies, there are hundreds of startups.

“Nintendo re-energized this market with products for older adults and now that trend has moved into mobile games and apps,” Adkins said. Learning apps now rank in the top 10 apps in many different countries, not just in Japan where the trend started.

“Mobile educational games are now outselling PC educational games,” he said. “And the entrepreneurs are incredibly passionate about what they are doing. What we find interesting is the interest among investors in mobile.”

Of 31 game-based learning companies that raised funding last yea, 23 were mobile. And 21 targeted consumers. Some of the projects look very promising, like GlassLab‘s project to create a learning game from SimCity. But it is very difficult to make money with educational games in the mobile market, unless you have a big brand like Sesame Street. DragonBox, made in Norway, is a math game that is outselling Angry Birds in that country, Adkins said.

Adkins noted that there’s a hole in the market for older kids. Early on, there are plenty of games for young children. There are also a lot of simulation games and hardcore learning games for adults. But after the fourth grade, classrooms use a lot fewer games to teach children.

“There’s a lot of debate still about the effectiveness of game-based learning, but it has long since proved its worth,” Adkins said. “I don’t know why we are still having that debate.”


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