Serious Play Conference
Earlier in my career I headed a prominent PR agency in the entertainment video games industry. I began to wonder, “Why are kids so addicted, that they will play for hours, day after day”? Then one day, a developer called to ask me to promote his game – to teach kids math. I was hooked.
So when I launched the first Serious Play Conference 14 years ago, I thought we were going to focus on the use of games for education. But at the first conference, trainers in healthcare, military, government and education researchers showed up. These early pioneers had all begun to experiment with game-based elements for training and education and they felt they could learn from the experience of others. Today, our annual conference in June is the only event to offer a full track of sessions for all the major applications for serious games and simulations.
Learning through game-based learning has come of age. The growth rate for Game-Based Learning in the U.S. is currently 21.9%. Revenues will more than double to $10.6 billion by 2026, according to the latest figures from Metaari, the leading industry research firm in the game-based learning market.
Now we have substantial research showing that employing game play in learning products better engages learners and produces more retention.
The most significant pattern in the current market is M&A activity. Large global tech and educational publishing companies are “buying their way in”; legacy eLearning companies are expanding their portfolios with additional learning games and an extraordinary flood of startups are entering the market.
Market conditions for serious game developers competing in the U.S. could not be more favorable, with high demand, intense investment available and opportunity in all industry segments. Consumers are currently the top buying segment. A huge demand exists for games for kids with special needs, early childhood learning games, coding games, language learning games, and brain training games (both for kids and adults). Healthcare remains a strong opportunity, but Corporations will be the top buyers by 2026.
In the last 5 years, healthcare simulations have led market growth in the U.S. By all consulting firm forecasts, the global market for that segment is predicted to reach almost $4 billion by 2025 (doubling the market in 2020)
Simulation has been at the core of healthcare training since the beginning of medicine, because you can’t let students actually operate on human bodies. So the realization that training could be done in a digital format, with the medical student actually feeling like he was actually touching a body, just blew people away. It is much more “real.”
This is not the market that American companies dominate, however. We have some big players, but many of the large healthcare simulation companies are in Canada, Norway, Sweden and Japan. American companies started catching up by capturing revenue for HC simulations for medical schools, contract formerly won by European companies that really were ahead of us in the use of serious games and by pitching and winning some major contacts with the DOD to train military medics.
A major factor has been the releasing of tools to young developers by Epic and Unity. Epic, in particular, is offering free technology to start-ups with a long payback agreement. The company’s Epic 5 UnReal Engine platform is putting their developers in a place to qualify for Virtual Reality training programs for the military as well as cutting edge new applications that could revolutionize healthcare
After a slow start, Corporations have become the largest buyers of Game-based training products in the U.S. The CAGR growth rate in the U.S. corporate segment is almost 50% and revenues will spike to just over $4 billion by 2025, according to Metaari.
Corporations have been buying packaged pre-employment assessment games for several years. But now companies are using game-based applications for skill assessment and performance evaluation in all departments — sales, IT, marketing, product development, finance. Also for team building. Some very clever, creative teams building leadership and employee development games will be at Serious Play Conference this June, demonstrating cutting edge programs. Another recent growth area for corporate training is in cybersecurity, using simulations and role playing games.
The big new trend in corporate is toward developing these game-based assessments in house. All of the new assessment game companies provide tools for company authoring with guidance on design, so clients are able to tailor their training games and simulations to their specific requirements.
Overall, the current demand is so high for good corporate training games that the market is expected to grow by around 50% over the next five years. That means there is still plenty of room for new startups – at least until major consolidation starts to occur.
Government is not a high growth sector for game-based learning, but there is a steady flow of purchase. One of the first game-based product contracts under the DOD was with the Veterans Administration — to treat PTSD and other disabilities from combat duty.
Typically, government has bought services from established suppliers that have long track records of serving the sector. Trainers spend a great deal on custom content. But recently, procurement approvals have been obtained for software, opening the door for virtual training. The most sophisticated virtual trainers developed in VR and using artificial intelligence assessment in use today are being developed for the military.
Local and state government agencies purchase Game-based Learning products for first responders, public safety personnel, and healthcare employees.
This summer, Serious Play Conference will for the first time have a whole track dedicated to helping start up game and tech entrepreneurs get funding from Federal government agencies and even how to win contracts with the DOD. All of those sessions will be recorded and available for sale after the conference.
The growth rate for Game-based Learning products in the U.S. primary school sub-segment is still healthy about 10 %. That is still mostly a parent purchase commodity – games to help kids learn math, coding or another subject, or brain teasers. Another hot area is social and emotional learning (SEL). Revenues will reach a half billion by 2025.
An interesting trend is that enterprising “ed tech” teachers are finding ways around that by developing their own “play: activity in class. And Librarians are joining them. I had so many applications from K12 teachers this year that I decided to offer a free bonus track on Saturday devoted just to teachers showing the games they have developed for use in class.
Games for high school kids are about twice the market of the lower grades and will reach $400 million within 5 years. The key subjects are STEM, but also History, Literature Chemistry.
The old Computer Clubs have been replaced by Robotics clubs and another relatively new phenomenon – Esports, a HUGE rapidly growing market, in high school, college and life. Kids learn team play, collaboration. Off line, eSports Tournaments can have winner pool of $10, 20- 25 million, and 40% of spectators have not themselves participated in eSports. Currently, they just watch.
Higher Education and Vocational Education is a slower market in terms of games faculty are using to teach classes but a big market in terms of a boom in departments encouraging students to pursue careers in some aspect of games – entertainment initially because the kids come in looking for that, and serious games later when professors educate them that the money is in serious games for health, education and other sectors.
Several catalysts are driving the growth of the serious games and simulation industry. Most of the catalysts are cross market technologies impacting all industries.
The key catalyst is the rise of Extended Reality — AR and VR and other forms of learning involving the extension of belief — Hands-on participation where you feel you are actually doing the activity involved because you are wearing the googles.
Sales of VR games, across all segments will have an almost a 50% growth rate and reach nearly a billion in revenue by 2025.
The most significant new catalyst to be looking out for is the advent of AI-based learning games. With AI applied, the degree of learning can be properly assessed.
FASTEST GROWING SECTORS
In terms of industry sectors, for the next couple of years at least, the Corporate market will be the strongest, with pre-employment assessment and evaluation games still in high demand.
The second-highest revenues will be in healthcare and government markets, generated by the sales of VR-based learning games. Corporate has not figured out to use VR in a significant way yet. It may happen.
Some software companies have licensing deals with hundreds of companies across the planet. Rapid authoring tools designed to create game-based tour guides and travel-related games are a niche market for tool suppliers:
Assembling Games with Premade Components
A major catalyst for Game-based Learning is the growing number of marketplaces that sell (or give away) premade virtual 3D objects, 3D virtual lifeforms, and even virtual worlds.
Unity and Epic have massive catalogs of “assets” in their online store. It is a commercial store but does contain just under 6,000 free assets including hundreds of assets designed for early childhood learning. They both also have a generous royalty sharing model for developers that sell assets in their online stores.
Historic Levels of Investment – Heavily in Start ups
One thing is clear: Historic levels of private investment are flowing to Game-based Learning companies. Big companies with deep pockets are “Buying Their Way In” to the Serious Games market — evidence that they believe in the viability of the product type an see long term growth. Large companies don’t create markets, they wait until large revenues are clearly visible and then “buy their way in.”
If you are interested in more detail, Metaari, an analyst firm we believe in, will deliver its annual 5 year report this summer at Serious Play Conference.
And the full 2021-2026 Industry report will available for sale at our website June 1. Go here also to see various reports on segments of the market.