This session will present key findings from Ambient Insight’s latest market research. This presentation provides an overview of the current global Game-based Learning industry including revenue forecasts, technology trends, innovations, business models, market catalysts and inhibitors, and buying behavior in specific segments. The demand for Game-based Learning is different in each buyer segment in specific countries in the world and the audience will learn about innovations that appeal to specific buyers. Special attention will be given to North America and Asia due to the substantial revenues being generated in those regions. Identifying the buyer can be a daunting task in the Game-based Learning market and this session will provide a breakout by buying segment for these two regions.

1. 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

2. Ambient Insight 2014
Agenda
 Introductions - Research Taxonomy
 Worldwide Simulation-based Learning
Revenues
 Worldwide Game-based Learning Revenues
and Buying Behavior
 Game-based Learning Investment Patterns

3. Ambient Insight 2014
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.

4. Ambient Insight 2014
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-12
Corporations
- Businesses
Higher
Education
Federal
Government
State - Local
Government
Associations
& Non-Profits
Healthcare
Custom
Content
Cloud-based
Tools & Platforms
Value Added
Services (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 Regions
North
America
Latin
America
Eastern
Europe
Western
Europe
Asia Africa
The Middle
East

5. Ambient Insight 2014
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

6. Ambient Insight 2014
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
2018
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

7. Ambient Insight 2014
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.
Ambient Insight’s 2014 Learning Technology Research Taxonomy

8. Ambient Insight 2014
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
Ambient Insight’s 2014 Learning Technology Research Taxonomy

9. Ambient Insight 2014
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”

10. Ambient Insight 2014
2013-2018
Worldwide Simulation-based
Learning Revenue Forecasts

11. Ambient Insight 2014
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 $7.1 billion by 2017.
*** Includes custom content services and authoring tools revenue
Simulation-based
Learning by
Region***
2013
Revenues
in US$ Millions
2018
Revenues
in US$ Millions
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%

12. Ambient Insight 2014
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."
2013-2018 Worldwide Simulation-based Learning Market

13. Ambient Insight 2014
2013-2018 Worldwide Simulation-based Learning Market

14. Ambient Insight 2014
Sophisticated Mobile Healthcare Education Simulations Now
on the Market
http://www.3d4medical.com/

15. Ambient Insight 2014
2013-2018 Worldwide Simulation-based
Learning Five-year Growth Rates by Region
0%
10%
20%
30%
40%
North
America
Latin
America
Western
Europe
Eastern
Europe
Asia Middle East Africa
2013-2018 Growth Rates by Region

16. Ambient Insight 2014
2013-2018
Worldwide Game-based Learning
Revenue Forecasts

17. Ambient Insight 2014
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 $2.4 billion by 2018.
*** Includes custom content development services revenue
Game-based
Learning by
Region***
2013
Revenues
in US$ Millions
2018
Revenues
in US$ Millions
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%

18. Ambient Insight 2014
2013-2018 Worldwide Game-based Learning
Five-year Growth Rates by Region
0%
5%
10%
15%
North
America
Latin
America
Western
Europe
Eastern
Europe
Asia Middle East Africa
2013-2018 Growth Rates by Region

19. Ambient Insight 2014
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

20. Ambient Insight 2014
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

21. Ambient Insight 2014
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

22. Ambient Insight 2014
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.”

23. Ambient Insight 2014
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

24. Ambient Insight 2014
Longitudinal Analysis: The Global Game-based
Learning Market Enters Mature Phase
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.

25. Ambient Insight 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

26. Ambient Insight 2014
Worldwide Game-based Learning
Investment Patterns
Leading Indicators

27. Ambient Insight 2014
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

28. Ambient Insight 2014
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”

29. Ambient Insight 2014
Success: one teacher at a time.
Dreambox Learning obtained $14.5 million in funding in
2013 – They have raised $25.5 million since 2010
Investment Patterns: 2013-2018 Worldwide
Game-based Learning Market

30. Ambient Insight 2014
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.
Investment Patterns: 2013-2018 Worldwide
Game-based Learning Market

31. Ambient Insight 2014
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

32. Ambient Insight 2014
 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.”
Investment Patterns: 2013-2018 Worldwide
Game-based Learning Market

33. Ambient Insight 2014
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
Investment Patterns: 2013-2018 Worldwide
Game-based Learning Market

34. Ambient Insight 2014
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

35. Ambient Insight 2014
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

36. Ambient Insight 2014
Q & A
This deck is posted in Ambient Insight’s Free Resource Library
at:
http://www.ambientinsight.com/News/PublishedContent.aspx
Tyson@ambientinsight.com