Industry Description & Outlook
The global game-based learning market reached a value of US$ 5.8 Billion in 2020. Game-based learning aims to motivate students and capture their interest by using video game design and elements in learning environments. Using this method helps in simplifying complex topics and provides an interesting and entertaining pathway for learning. Moreover, it gives ownership of learning to the students, inspires them to switch to a lateral thinking approach, offers them opportunities to study different fields and makes the learning process more viable. As a result, game-based learning is one of the fastest growing trends in the education sector across the globe.
Global Game-Based Learning Market Drivers
The rising demand for quality education with a modern and interactive approach has resulted in an increase in the adoption of game-based learning techniques by several educational institutions. In addition, the introduction of tablet and e-learning methodologies in schools across the globe has created a positive outlook for the global game-based learning market. Apart from this, an increase in the usage of Augmented Reality (AR) and Virtual Reality (VR) in educational gamification has helped in providing a more immersive and interactive experience. The other factors influencing the growth of the market include the rapid emergence of social media, rising income levels, increasing penetration of smart phones, rising access to high speed internet, etc. Looking forward, IMARC Group expects the global game-based learning market to exhibit strong growth during the next five years.
- Based on the platform, the market has been segmented into online and offline.
- Based on the revenue type, the market has been segmented into game purchase, advertising and others.
- Based on the end-user, the market has been segmented into K-12 game-based learning, higher game-based learning. The K-12 game-based learning segment currently represent the biggest segment.
- Region-wise, the market has been segmented into North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.
- The competitive landscape of the market has also been examined with some of the key players being Badgeville, Bunchball, Classcraft Studios, GoGo Labs, 6waves, Recurrence, Fundamentor, Gametize, GradeCraft and Kuato Studios, BreakAway Games, Filament Games, LearningWare, Playgen, Tangible Play and Toolwire.
Who are the Buyers?
There are eight Game-based Learning buying segments analyzed in this report: consumers, three academic sub-segments (preschools, primary schools, and secondary schools), tertiary & higher education institutions, federal government agencies, provincial/state/prefecture & local government agencies, and corporations & businesses. A report from Metaari breaks out the global revenues for each of these segments and provides a detailed breakout by these segments for the US.
Source: Metaari’s 2019-2024 Global Game-based Learning Market
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The corporate segment has the highest growth rate for learning games at a breathtaking 47.5%. There are two catalysts driving the growth in the corporate segment: the rapid uptake of psychometric job candidate evaluation games and the continued adoption of business simulation games. Revenues will more than double in all eight global buying segments over the forecast period and will surge more than six times in the corporate buying segment. Yet the market drivers are unique to each segment. For example, the corporate demand is being driven by the booming demand for pre-employment assessment and evaluation games; the corporate segment has the highest growth rate out of all eight segments at a breathtaking 47.5%.
By 2024, the consumer Game-based Learning market will essentially be a commodity market; volume sales and revenues will be very high but unit prices will decline. In a commodity market, suppliers tend to compete on price. That said, the demand in the consumer segments across the globe is very high and the revenues for Game-based Learning will be heavily concentrated in the consumer segment throughout the forecast period.
The PreK-12 segments are broken out by the three sub-segments because the buying behavior and the user demographics are quite different in each cohort. The demand is being driven by data showing that games in preschool can accelerate the transfer of both developmental abilities and basic academic skills.
Games have been proven to be quite effective at teaching young children social and emotion learning (SEL) skills. The large for-profit preschool chains (particularly in the US and China) are the top buyers of educational games for preschoolers. They license games from commercial Game-based Learning companies.
The revenues for Game-based Learning will spike over five times in four of the eight buying segments over the forecast period.
Game Types & Trends
The types of games used in the primary and secondary sub-segments are very different as they map to scaffolding curricula. For example, STEM games are more common in middle school and high school programs. Several recent trends could greatly accelerate the adoption (and the revenues) of serious games in the academic segments. Perhaps the most significant catalyst is Microsoft’s entry in the serious games industry when they launched their Minecraft: Education Edition in November 2016. In just one year, they had over two million licensed users across the planet. Microsoft continues to add resource packs (coding and chemistry are the latest) making the platform more attractive to the academic segments. By June 2019, they had over 40 million teacher licenses across 115 countries.
The granular breakouts of the PreK-12 segment by the three subsegments provide visibility into the demographics and revenue opportunities in specific grade brackets. There are other major trends impacting the uptake of Game-based Learning in the global PreK-12 sub-segment:
- One of the most successful Game-based Learning suppliers in the PreK-12 segments across the planet is Norway’s Kahoot!. In January 2019, they reported that they had surpassed 90 million users. They claim their game is being played by more than half of all US-based PreK-12 students (45 million students). Kahoot! claims to be the fastest growing learning brand in the world with a 75% year-over year growth rate.
- In June 2018, Roblox launched their Roblox Education program, which is a Game-based Learning platform. The bundle is free for educational institutions and includes lesson plans. “The curriculum is available now and includes everything educators need to teach kids, ages 10 and up, technical and entrepreneurial skills on Roblox, such as step-by-step tutorials, handouts, lesson guides, and more. Roblox’s roots have always been steeped in STEM education.” Roblox had over 90 million active users by June 2019. In June 2019, they reported that they had ” reached more than 650,000 students worldwide through its education initiatives in 2018, and it expects to more than double that number in 2019.”
- Ubisoft’s Assassin’s Creed is one of the most popular games in the gaming industry. Their Assassin’s Creed Origins game was released in late 2017 and sold over 1.5 million copies in the first week. In February 2018, Ubisoft launched their new (non-violent) Discovery Tour by Assassin’s Creed: Ancient Egypt game that is “a new educational and entertaining tool which lets anyone explore the entire interactive 3D recreation of Ancient Egypt.” The game “is a unique experience at the intersection of entertainment and learning. As both a game and a learning tool, it is quite a unique asset for teachers to integrate as part of their history classes.” According to Ubisoft “Discovery Tour by Assassin’s Creed: Ancient Egypt a completely new type of edutainment tool.”
VR Classroom Kits
A major trend driving the adoption of VR-based games in the PreK12 segment is the availability of so-called VR classroom kits that include headsets, chargers, routers, carts and most importantly, packaged educational content. This has created a growing distribution channel for development companies that partner with the kit companies. The growth rate for serious games in the higher education and tertiary segment is a healthy 15.4%. Business simulation games that incorporate role playing are now common in sales, finance, business, and marketing programs in higher education institutions across the planet. The demand for business simulation games is quite high in all the developed countries. The buying behavior in the two government segments analyzed in this report is similar in that games are used for civilian employees, military personnel, public safety employees, and first responders. Agencies hire developers to create custom games for various civic initiatives. The growth rate for Game-based Learning in the federal government agencies across the planet is 29.4% and 32.8% in the local and state government agencies. The growth rates are essentially on par for the two segments. Yet, there are unique buying patterns in both segments and they are discussed in great detail in the demand-side analysis.
A critical workforce challenge in the United States is the skills gap, particularly among jobs that require either a high school diploma, postsecondary certificate, or associate’s degree. Jobs requiring these “middle skills” outnumber the adults in the workforce who possess them, and this gap presents a barrier to American economic competitiveness. There are 30 million jobs in the United States that do not require a bachelor’s degree that pay median earnings of $55,000 or more. CTE provides an important avenue for young adults to gain these skills beginning in high school. How do we engage a new generation of young Americans and prepare them for rewarding careers? Last year, Congress reauthorized the Strengthening Career and Technical Education Act for the 21st Century (also referred to as Perkins V), the federal legislation that supports CTE programs and whose purpose is to address these critical issues. (U.S. Department of Education, 2021)
The 2019-2024 Global Game-based Learning Market
Serious Games Industry in Boom Phase (Adkins, 2019)
This report forecasts revenues for three types of Game-based Learning products and services: packaged retail games sold by unit or by subscription, custom educational game development services, and tools and platforms designed to create and deliver serious games.
The growth rate for custom content development services is quite high at 47.5% and revenues will spike over seven times over the forecast period. There is a vibrant (and growing) cottage industry of custom Game-based Learning developers across the planet. The major buyers of custom services are corporations and government agencies although tertiary institutions (particularly business schools) also hire developers to create custom learning games. Corporate-facing custom developers tend to specialize in specific industry verticals. Government facing developers tend to be very specialized. The growth rate for Game-based Learning authoring tools and platforms is a robust 39.3%. Revenues will surge over five times over the forecast period. Dedicated Game-based Learning tools are relatively new on the market but new specialized rapid authoring tools continue to come on the market at a rapid pace. This report identifies over 70 new Game-based Learning tool companies.
Suppliers are bringing authoring tools to the market designed for specific demographics, buying segments, and verticals. For example, tools designed to create educational games for museums and tourist venues are specialized for those verticals. Specialized tools are also available now for preemployment assessment and evaluation games used in the organizational segments. There are highly-specialized authoring tools designed to create games for children. And of course, the tools used to author AR, VR, and AI-based learning games are quite unique and very new on the market. There are at least twelve specialized types of learning game authoring tools and they are identified in this report. The five-year compound annual growth rate for packaged retail games is 31.7%. Revenues for packaged retail educational games (for all eleven types combined) will nearly quadruple over the forecast period. The vast majority of revenues for Game-based Learning will be derived from packaged games throughout the forecast period.
The educational game framework provides suppliers with a precise method of tapping specific revenue streams and a concise instructional design specification for the development of pedagogically-sound and profitable educational games.