As kids start using smartphones and tablets at younger and younger ages these days, both teachers and parents are having to compete with screens to keep them engaged with learning at school and at home. One way to do this is by employing digital learning methods including educational games and AR technologies that teach foundational skills in math, English, music and science.

The widespread adoption of e-learning and tablet-based education has created a global market ripe for growth as both evergreen brand owners and emerging kids IPs jump into the highly lucrative gaming business. Kids educational games, in particular, generated US$4.19 billion in revenue last year, according to a report published in September by market consulting firm Kings Research. And as demand rises, this market is projected to grow by 22.59% year over year until it reaches US$20.5 billion in annual revenue by 2030.

Kids entertainment companies have several market-entry choices, from making games internally, to acquiring a studio, to licensing their IP to an experienced developer already working in the field.

Co-op action

To help bring Angry Birds into the classroom, Finnish video game developer Rovio Entertainment partnered with US-based Legends of Learning to create a series of STEM-focused games using settings and characters from the iconic franchise.

Angry Birds is naturally suited to the digital education market because its gameplay—which involves slingshotting characters into buildings and evil pigs—was already built around common educational subjects like physics, measurements and angles, says Katri Chacona, Rovio’s director of brand licensing.

The partnership has resulted in a game due out this fall that also taps into two major trends in education, adds Vadim Polikov, Legends of Learning’s CEO. “Teachers and administrators have realized that today’s students are used to a much faster-paced, interactive and engaging world outside of school, and they expect that same rich experience at school as well,” he explains.

“Teachers are now turning to learning games to supplement the traditional textbook curriculum, and students are responding with increased engagement and higher test scores. Second, many parents decided that they were going to take a more proactive role in their children’s education [during the pandemic], and that often led them to educational games that could engage their kids and supplement their learning.”

Legends of Learning’s primary platforms are Chromebook laptops and online browsers, which are the most widely accessible hardware for teachers in schools, notes Polikov.

“While this limits the types of games that can be built, it massively broadens their reach and allows us to make a real impact on learning in schools today.”

More than a million monthly users play games through the Legends of Learning platform, which features a catalogue of more than 2,000 instructional titles and videos. And online games like the ones curated by Legends hold the largest market share at 62% as of 2022, according to the King Research report.

Opportunity acquired

In Spin Master’s case, purchasing an experienced developer and its gaming library was the strongest move to make. The Canadian toyco has worked with several games studios, including Activision and Outright Games, but only its San Francisco-based mobile app developer Originator specializes in educational titles.

Spin Master acquired Originator in 2021 for US$29 million in order to create new branded e-learning games and apps for its kids IPs, says studio co-founder and CEO Rex Ishibashi. Originator launched PAW Patrol Academy—the preschool franchise’s first e-learning app—in tandem with feature film PAW Patrol: The Mighty in September 2023.

Originator initially rolled out an English-language version of the game to app stores worldwide, so that kids from ESL countries such as China, Germany and France could try out the experience. The company plans to update the game with new languages later on to bring in more players, says Ishibashi, adding that Originator’s previous titles have had success using this strategy.

“From our internal research, 94% of kids ages two through 12 are playing digital games globally,” says Ishibashi. “The core audience for e-learning games is three- to six-year-olds, and while they’re only a couple of years apart, there’s a lot of development happening during that time, whether it’s letters, words, numbers or shapes.”

Since launching in 2013, Originator’s games have logged more than four billion hours of playtime among 10 million-plus users. And math and English are the most in-demand subjects, according to Ishibashi.

New ways to play

Although it’s not a dedicated e-learning studio, San Jose-based Nex started developing and manufacturing a new active entertainment system for TVs called Nex Playground after seeing demand for more casual and interactive gaming experiences from families.

The hardware will launch in December with more than 20 games and experiences for kids that use motion-tracking technology, including Nex’s original Active Arcade mini-game collection and its first licensed title, Peppa Pig: Jump and Giggle. Several of Playground’s games feature educational components such as algebra and puzzles to help teach kids problem-solving skills through movement.

“Productive playtime, like educational and developmental play, will be a big cluster of the content that we want to create going forward,” says Nex CEO and co-founder David Lee. “Not only are we creating games internally, but now we’re seeing interest from companies and IP owners in the kids space—like Hasbro, which wants to bring its brands to our platform.”

Lee notes that it has taken nearly five years for motion-tracking tech to get to a stage where the camera can track multiple users at once, and for manufacturing efficiencies to allow the game console to be sold at consumer-friendly prices.

During the December launch, Nex will roll out its Playground systems in four key markets first, before expanding into new territories later next year. “We are going to market first in the US, Hong Kong, Taiwan and South Africa,” says Lee. “We want to start in Hong Kong and Taiwan since that’s where our previous apps went viral. And retailers are already placing orders for the hardware because it serves a need for safe indoor activities at home.”

A similar demand for educational kids games is brewing in Asian territories, adds Kings Research. Last year, the APAC region accounted for 45.72% of revenue in the online education market, with rising populations in countries like India and China acting as key drivers of growth. Kings expects this market share to grow by 25.19% year over year until 2030 as more parents seek out accessible education tools for their children.

When it comes to developing e-learning games for kids, Lee, Ishibashi and Palikov all agree that striking a balance between entertainment and education is the key to success. The toughest challenge is ultimately making a game engaging and fun enough to replay for multiple sessions—because an educational app is next to worthless if the child doesn’t want to play it.