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How Learning Games Get Funded

by Wick Perry on 04/30/18 06:18:00 pm   Featured Blogs

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The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

SUMMARY

Available funding sources, edu design challenges, and overall lessons.

[ Part 1: Case Studies | Part 2: Summary ]



These are my compiled notes from talking with a bunch of folks about how to make a living working on educational games. Unless something's in quotes, it's paraphrased.

Mikael Uusi-Mäkelä, TeacherGaming:

"We're not competing against each other, we're competing against existing practices."

Chris Walker:

"If there's a good easy solution, I haven't found it and I've been searching for two years."

Gonzalo Frasca, Dragonbox:

"If you want to make money, go make Math Blaster."

Sources of Revenue

Crowdfunding

E.g. Kickstarter, Patreon

For Kickstarter, small indie projects seem to have stabilized at around $16-$20k, but a good studio can pull off around $70k.

Not many devs can support themselves purely by crowdfunding — maintaining a Patreon requires being a fairly-constant charismatic web presence. Besides Nicky Case, I've only been able to find one other fully-funded Patreon in the science/nature/education game niche.

That said, I think Kickstarters are excellent ways to get a project off the ground & build an audience. For some projects, you don't need to get funding for the entire game — Crescent Loom's campaign was explicitly just to make the prototype's core engine, with the gameplay and tutorials and whatnot slated for additional development post-Kickstarter. Keep people happy by under-promising and over-delivering.

Chris Walker:

A secret sauce for campaigns is endorsements from influencers. These people generally know that they're gatekeepers and the best ones will be happy to help you out if you're nice and your project is worthwhile & relevant.

Gifs are the golden language. Get one that is funny/has a great hook and wield it with extreme prejudice.

Do be careful about not delivering on your promises. The internet can be quick to turn on you.

Jesse Schell, Schell Games:

Games simply cost more than Kickstarters bring in. It's only ever going to be a slice of the pie.

Grants

E.g. SBIR

Grants take a lot of time to write, are slow & hard to get, but the money is substantial (depending on the agency and phase, an SBIR can be anywhere between $150k to $1M) and you don't need to re-pay it.

In the U.S., the Small Business Innovation Research (SBIR) program is the most common one used by game studios (universities & other educational institutions have other options). Most sections of government (from the Department of Education to the Department of Defense) have some small slice of their budget dedicated to SBIR grants. They're grants that are designed to stimulate private research and development in the area that department is interested in.

Even with a copy of a successful grant to work from, it took me about a month of full-time work to put an SBIR application together for Crescent Loom. You need to do market research, explain how your product will turn a profit, demonstrate that it's actually innovative in some way, assemble a prospective team of developers, collect letters of support from prospective influential customers, and provide budgets and production timelines.

But SBIR isn't the only option! Check for grants from your country and local area. For Canada, Tabby Rose has listed Ontario Media Development Corporation, Bell Fund, CMF, CCA, and XL as examples. There are also sometimes one-off opportunities that come up if you keep your ears open, such as Underrepresented Puzzle Creators or VR for Impact.

Brooke Morrill, Schell Games:

  • National Institute of Health (NIH) has the largest budgets and thus the largest SBIR program, but has strict requirements that the project somehow impacts human health.
  • National Science Foundation (NSF) is at a sweet spot of having a fair-sized budget and willingness to fund cutting-edge, novel projects that advance basic science education.
  • Institute of Education Sciences (IES) typically awards less than a dozen phase I SBIR grants per year, so they're more conservative and tend to select awardees whose product has a high likelihood of impacting education.

Lindsey Tropf, Immersed Games:

"The NSF is more interested in funding something with innovative technology that has a technical risk, but the Dept. of Education wants a product with an educational impact as its focus."

Jesse Schell, Schell Games:

The long submission-review-resubmission cycle means that it can take years to build up to momentum to actually get a grant funded. Also, the people on the review board are human and use personal knowledge to judge how tenable a proposal is. If you have an established history and they've heard of you, they'll be more likely to believe in your capabilities.

Melanie Stegman, Molecular Jig Games:

The people writing your letters of support should be the ones who you'll be selling to. The letters should should essentially say, "I am X. If they make what they say they're going to make in this application, I would be interested in buying it."

You can even get a letter from Valve (or some other publisher/distributor) talking about their assessment of how well it would sell.

Day Job

Most commonly seen in the indie space. Pay your bills with something unrelated, work on the game part time/weekends. Will make everything take way longer, but it's so much less risky than sinking your savings.

A possible path is to make the initial prototype while working a day job, slowly build an audience via crowdfunding, and then transition to full-time dev work when/if it becomes self-sustaining.

Partners

E.g. publisher, hardware manufacturer

I don't think I've actually seen an example of an edu game actually getting funding through a traditional games publisher. That... might be telling us something about the market as a whole. Nobody has figured out out to make those bets be successful.

(Take-Two Interactive bought Kerbal Space Program, but only after it had already become one of the most best-selling science games out there.)

But hey, things could change! Might be possible to start with a traditional K-12 resource publisher like Rubicon Publishing, or hardware specialists like Leapfrog or Thames & Kosmos (like what Schell Games did with Happy Atoms, see Case Studies).

Lindsey Tropf, Immersed Games:

Around 2014, Amplify commissioned a bunch of educational games for the launch of the "Amplify Tablet", a touchscreen device intended for schools. Although their plans were cut short just a year later as Chromebooks established their dominance of the market, and the games have been spun off into Touch Press Games.

Also, STEMscopes, a large educational publisher, has licensed some Filament Games products and commissioned some new ones.

Contract work

E.g. museums, universities, brainPOP, local communities

Contract work: some other party approaches you with an idea/opportunity rather than the other way around. Different contracts can be at very different scales, from working with a local college professor to a big corporation like Disney.

Getting the work here is pretty much entirely a function of networking, making good impressions, and getting your name out there. Also, there's no guarantee that you'll find the kind of work you're interested in, making this option pretty close to just having a day job.

Jesse Schell, Schell Games:

A common model is that an institution wants a grant, but that grant has a requirement for some kind of public outreach. The institution puts out a request for proposals to known game companies. These companies can then pitch what they can do with that available budget, and the institution chooses which of those companies to subcontract the outreach requirement to.

It's a symbiosis; the institution takes on the work of securing the grant, the game company helps them get the grant with an attractive idea, and then they both get paid.

Brooke Morrill, Schell Games:

Schell Games takes a fair number of non-educational contracts in order to pay the bills, and then use the profit from those in order to develop its own games. Our experience developing educational games improves the way we approach developing entertainment games and vice versa, so the mix of projects yields the best possible product.

Andy Hall:

You get contract work by getting involved with your local community & letting people know what your deal is. Months later they'll hear somebody say that they need those skills.

Excellent example of this kind of local community is the Boston Indie Game Collective, where a bunch of indie devs work out of the same space and can pass overflow jobs to each other. (Wicknote: in Oregon, there's the Portland Indie Game Squad)

Unity has become a standard, so knowing it will make you a lot more hireable, able to jump onto many existing projects, and make it easier to collaborate.

Gonzalo Frasca, Dragonbox:

The problem with client-specific work — like museums — is that it doesn't scale up. You do the job and it's just done, as opposed to having something you can add to your portfolio & reap the long tail.

Private Investors

E.g. seed funding, angel investors, Indie Fund

Friends / Family: This completely depends on your situation, but it's possible for some to privately pitch to personal connections and raise enough to get started. Repayment plans correspondingly vary on situation. Be wary, though: nothing ruins a relationship quite like borrowing handled poorly.

Angel Investors: These are groups/individuals who pool their money and resources to invest in certain types of projects.

A particularly notable group for games is the Indie Fund: " a funding source for independent developers, created by a group of successful indies looking to encourage the next wave of game developers. It was established as a serious alternative to the traditional publisher funding model."

They have a particularly developer-friendly funding model — they take 25% of the game's revenue following release until they've doubled their initial investment or two years pass. You can bet that their inbox is swamped with submissions, so once again the answer is plain ol' networking.

See also: Fig, SeedInvest

Lindsey Tropf, Immersed Games:

There are angel groups you can find where 30+ angels have shared meetings. For some, you present and everyone invests separately, and in others members vote and invest together. These are very sophisticated and can take up to 6 months to close funding, depending on the group, too.

Venture Capital / Professional Investors: Venture capital can come fast and in very large quantities, but they'll be looking for a 5-10x return in 5 years. Consequently, you have to be able to scale fast and will face immense pressure to do what'll sell over what'll be most effective.

Lindsey Tropf, Immersed Games:

"Professional investors tend to invest in like 0.1% of people they screen/talk to, while SBIRs have more like a 10% acceptance rate (depending on which program). Investors CAN move faster, but that doesn't mean they will, depends on who and their state."

"The most important thing to keep in mind if you want to seek out private investors (whether angels or professional investors) is HOW they are going to get their financial return.

For professional investors, this means they expect you to have an "exit" — your business needs to be acquired, for example, and they get a proportion of those proceeds. With angels, you may be able instead to make other agreements like revenue sharing. But in general, you need to have a plan and understand these implications before you seek private investment."

Erin Hoffman, Sense of Wonder:

"Games are a hit-based-market, which is why VCs don't like to invest in it."

Entertainment Market

E.g. Steam, selling via your own site.

So, don't know if you've noticed, but there are a LOT of people making games these days. Making it in the market requires some combination of solid design, unique aesthetic, a viral hook, networking, and a lot of luck.

Saying "but my game is also educational!" will not save you. However! Making games that follow nature can bring us to new, never-before-seen designs. The stagnation of endlessly re-making the same genres starting to lift with the rise of diversity in our industry. We can ride this renaissance by making games that take some unexamined bit of reality and let people play with it.

That's my take, at least. A few particularly successful examples:

  • Pokemon: inspired by a bug-collecting hobby
  • Zelda: inspired by exploring forests
  • Kerbal Space Program: inspired by building backyard rockets
  • Niche: a straight-up genetics game

So: compared to other commercial games, we have an advantage in unique subject matter and access to education-specific resources like grants. But this is still a tough place to make it. :/

Education Market - Schools

E.g. "Steam for Schools" platforms, directly targeting teachers/districts

Gonzalo Frasca, Dragonbox:

"The school market is crazy. It's hard to tackle, for everyone."

You can have a groundbreaking game solution to teaching some topic, but the school systems aren't generally set up to widely incorporate piecemeal technology. They want a comprehensive approach. It's not enough to just sell software; for it to be worthwhile, you need to also provide the curricular supporting materials.

(Wicknote: Mystery Science does this really well.)

Dragonbox is trying to solve this by setting up an entire math curriculum: lesson plans and minigames and tests and textbooks for a whole semester.

Remember that those who make the decisions about what tools to use are administrators, not the end users. Something can make learning ten times faster, but it needs to actually appeal to the people running the school. Students are similar to inmates, and are kind of forced to play whatever is given to them.

As far as actually designing effective teaching software, you need to know that the only way to get students to actually consolidate the material & connect it to the real world is through group discussions. You can't just give someone a sandbox; critical thinking doesn't happen while you're immersed. You need to provide points where they break immersion, analyze what they've done, and discuss the material.

(Wicknote: Filament Games did a study that aptly demonstrated this; Extra Credits summary here)

Lindsey Tropf, Immersed Games:

While administrators do make the final purchasing decisions, teachers do have a good amount of influence on what products are chosen. Teachers have discretionary budgets, choose department budgets, and administrators I've talked to have wanted to talk with their teachers and get their feedback first. And if the kids aren't engaged or learning, they will stop using the product, and you'll lose the sale.

"There is research about the need to debrief as an essential part of the learning cycle, in whatever form that takes — it's hard for kids to generalize the info otherwise.

However, clearly you are critically thinking while you are playing a sandbox game. That's literally the entire process of a well-designed sandbox game: setting goals, problem solving, evaluating the results of that. Students just need some supports to make sure they do that well instead of randomly, and to help debrief the knowledge and solidify it."

Brooke Morrill, Schell Games:

A lot of our marketing for educational games involves personal networking and talking to individual teachers. There have been a few attempts by external entities to aggregate educational games, but most have been short-lived.

One problem is that of the dashboard; each game comes with its own system, but many teachers report that they don't want another system to manage. "Make it work with what I have." However, there's no standard; they're all different and don't talk to each other.

Another problem is that of pricing. $5-$8 per student per year is a ballpark typical price, but it depends heavily on how much value it adds for the teacher. A one-day activity is not worth as much as something that can fill a semester.

Teacher training is essential: "Teachers have their time and attention being pulled in a million directions constantly, so it's much more likely that they'll successfully integrate your product if you remove as many barriers to its use as possible (which would include providing materials and training)."

What a game developer considers quality isn't the same thing as what a teacher considers quality. For example, ABCmouse is a program full of simple art and short interactions; drills and minigames and multiple-choice quizzes. Wouldn't win any design awards, but teachers and kids love it because it's easy to use and fulfills their needs. It's difficult find something that elegantly teaches something and actually fits into a classroom environment.

Erin Hoffman, Sense of Wonder:

"Games like Slice Fractions and STmath — these games teach. You know, STmath is amazing if you look at the efficacy that Mind Research Institute is getting out of their games.

Game designers will look at those games and go 'wOoOo, looks like butt!' — but it really works in classrooms. Kids play it. Kids love GG the penguin. It's something you should be aware of if you're into learning games."

Jesse Schell, Schell Games:

School budgets are messed up; there's not consistency in who's buying, when, or how much they can spend. There's also no easy way to talk to them besides reaching out with 1-1 marketing efforts.

Since the educational system hasn't been able to support a unified game marketplace, I think the best solution might be some kind of game-PBS for schools. My dream is to see an organization set up that specializes in creating quality educational games and provide them for free to schools.

Dashboards sound like a great idea and everybody thinks they want one, but people don't actually use them in practice. It's like backwards-compatibility for consoles; people demand it as a security blanket, but then never use it. (Console manufacturers have handled this by including backwards compatibility in the first generation of the console and then quietly ditch it.)

Mikael Uusi-Mäkelä, TeacherGaming:

It's very dependent on region, but generally about 70% of devices in schools are Chromebooks these days. iPad had a foothold, but they've lost a lot of ground. Again, this is regional; the Middle East is still iPad-only, and Android devices dominate in developing countries.

July is the busiest month for schools making purchases, though sometimes you see a spike at the end of a year when they need to use up grant money.

Education Market - Parents

E.g. parents of young kids, homeschoolers

Gonzalo Frasca, Dragonbox:

Educational games have a much longer shelf life than entertainment games. Their longer tail means that a good portfolio of great apps can be a long-time breadwinner.

Home-schools require the same sort of curriculum material support as classrooms. Parents, like teachers, are motivated but aren't as likely to pour a lot of time time into setting up a 1-day activity. They also want something comprehensive.

The thing to realize about the market is that people buy these apps to scratch an itch, to address some pain point. In a broad sense, people mostly spend money to fix things they're afraid of. We have a game that teaches geometry — essentially Euclid's proofs — which beautifully teaches skills that people need in later math classes. But compared to our algebra game, it's been a complete flop. Parents aren't scared of shapes & geometry, they're scared of algebra.

There's a particular behavior that parents spend money on their kids when they're young (2-6 years old) but then stop. The idea is that they want to make sure their kids grow up right, and the way to do that is just expose them to the right activities early. Like, this crazy idea that if a boy plays with dolls, they'll turn gay, and if they play chess, they'll turn smart. The market works in a very cynical way. No matter what your game is about, frame it in a way that it scratches an itch.

(One way to find an itch to scratch is by going on Twitter and see what kids are cursing about.)


Summary

Main Takeaways

  • Nobody has found a way to just make high-quality educational computer games and sustain themselves purely by selling to schools.
  • The people who do make high-quality classroom games either:
    • ...subsidize them with grants and contract work (Filament Games, Schell Games)
    • ...rely on healthy commercial sales through the app stores (Dragonbox, Doduko)
    • ...or include them as part of a larger curricular product (Mystery Science, Dreambox)
  • The games that most widely end up in classrooms are either:
    • ...free to use (iCivics, Duolingo)
    • ...drill-based (TypingClub, Math Blaster)
    • ...or general-use instead of topic-specific (ABCmouse, BrainPOP, Minecraft Education Edition).
    • Additionally, they are all browser-based — with the exception of Minecraft, which has a Microsoft team on standby to help with installations.

Back in 2014, the Joan Ganz Cooney Center Level Up Gaming report had a similar finding:

"Few teachers are using learning games of the immersive variety, the kind that lend themselves to deep exploration and participation in the types of activities that set digital games apart from more didactic forms of instruction. Most teachers instead report using short-form games that students can finish within a single class period."

Designing for classrooms

Generally, the marketable value of an edu game increases with the larger a curriculum it covers — not necessarily how well it teaches. If your game has a narrow, one-day topic, it has to be free and browser-based. The more of a set-up cost (i.e. teacher learning curve, game price, and installation fiddliness), the more days it needs to fill.

This is what both Dragonbox and TeacherGaming's Desk are trying to address; by including curriculum materials, they help with the learning curve and number of days a game can be used.

Dashboards are actually functionally a negative in their set-up cost. You can help with this by using an existing system, staying browser-based, and being as cross-compatible as possible.

You can also take advantage of the fact that classrooms have basically the built-in social structure of a LAN party by making multiplayer games that require a high degree of cooperation (e.g. Tyto Online).

For the design process of actually developing an edu game, this talk by Erin Hoffman is absolute gold.

Where is our Steam for education?

Any kind of centralized marketplace for educational games that develops is not going to look like Steam. It's a problem of selling subscriptions to classes/institutions, not individual games to end users (see the GlassLab case study for why this is way harder).

It also needs to be focused on the curriculum more than the game itself: something that looks more either like Mystery Science (studio-sized resource developer), Teachers Pay Teachers (free-for-all marketplace), or STEMscopes (large comprehensive organization). This seems to be the strategy that TeacherGaming's Desk is taking.

My impression is that any games on such a platform will need to be browser-based or have some other way to effortlessly deploy on many machines. The lack of setup cost is huge — this is the way ABCmouse and BrainPOP already work.

An alternative, sneakier way to effortlessly get games installed on school computers is how the first generation of learning games (e.g. Oregon Trail) did it — by coming pre-installed on the machines sold to schools. This is what the Amplify Tablet tried to do, but it was cut down by cheap chromebooks. Probably no longer a viable option without either another major educational technology shift or substantial cooperation & investment from Google.

Indies

For basic funding, you're gonna need a day job, take on contract work, kick butt at crowdfunding, get a grant, or strike gold in the mainstream game market. Selling your game to educational institutions isn't going to be enough.

Even if you have a small scope/cost of development, it probably means you're not providing enough curriculum materials for the game to be worthwhile for schools to purchase. If you scale up your operation to provide those materials, I get the sense that cost of doing so is more than you get back from the increased school sales. It looks like the environment just doesn't make for good math right now.

(Though I could easily be wrong about this — it'll be interesting to see how things go with Dragonbox's development of a game-supplemented math curriculum)

If you do want your game to be used in classes, your best niche is probably browser-based micro-simulations that an entire class can visit and go through a set activity, e.g. Andy Hall's Gravity Simulator. It's also possible to reach out to a local teacher and work with them to make something that's integrated with their specific class, e.g. Tychos.

Final Note

Gonzalo Frasca, Dragonbox:

Ask yourself: who actually teaches with simulations?

People who, when they make mistakes, cause a lot of people to die. Surgeons, pilots, the military. Religious teachers working with kids in extreme poverty.

For most schools, the consequences of failing to teach kids doesn't show up for years to decades. But whenever there's an immediate pressure to teach people effectively, you see the same solution: simulations.


[ Part 1: Case Studies | Part 2: Summary ]


If you found this post helpful, I also have a monthly mailing list where I talk more about the hustle & design process of Crescent Loom, my neuroscience underwater creature-creation game.


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