I game conference investing in educational technology


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Brief overview of investment trends in educational technology with an emphasis on games in education

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I game conference investing in educational technology

  1. 1. Moksa Ventures iGame Conference: Games in Education Investing in Educational Technology September 28 2013
  2. 2. Moksa Focus: Sectors of High Interest Capital Efficient Get somewhere on a few million dollars, not tens of millions Games and Game Layer Games and tech companies that use game design principles, mechanics, technologies, interfaces to meet business needs Early Stage After seed, with revenue in sight, before the big venture firms enter Games Digital health and wellness Educational technology Crowd-sourcing, distributed labor platforms Employee motivation, social task management Sensors, wearables, innovative human/ computer interfaces/AI Blended/augmented reality 2
  3. 3. Key elements of games – goals, rules, feedback and assessment, voluntary participation – are highly relevant beyond the entertainment sector. Entrepreneurs are building these “gameful” applications, technologies and interfaces in many non-entertainment sectors, drawing on game industry design and technology experience. What is a game and why care? Goal Rules Feedback and assessment Voluntary participation “A game is nothing but a problem-solving opportunity you engage in because you feel like it.” - game designer Jesse Schell Four elements of a game from Jane McGonigal, Reality Is Broken: Why Games Make Us Better and How They Can Change the World 3
  4. 4. framework for modern technology framework for connections: Facebook open social graph API framework for influencing behavior: under construction mechanics and tools to capture attention and influence behavior and leverage collective human/computer intelligence Digital Social Game layer The digital game industry pioneers technologies, mechanics and business models later adopted by non-game sectors. Useful lens for predicting mass market adoption and use of these technologies. Game mechanics and other conventions of the game layer are powerful tools for building engagement and influencing behavior in non-game sectors* What is the game layer and why care? *See Seth Priebatch’s 2010 TED talk. http://www.ted.com/talks/seth_priebatsch_the_game_layer_on_top_of_the_world.html 4
  5. 5. Digital Platform limited Solo/single player Hardcore limited market Keyboard/controller interface $50 box (US) Pastime for kids Digital + broadband + mobile Multi-platform Massively multiple player/ social Mass market/casual players Motion interface with device Digital download, virtual goods, subscription, “free” to play Mass entertainment + “serious” games Digital + broadband + mobile + cloud + SAAS Omni-platform; transmedia Open social graph Mass market + beyond games Motion interface without device/interface through any device Games + social layer + markets in attention and reputation + enterprise market for game mechanics Game layer of reality in serious games, augmented reality and other emerging explorations Digital Social Game layer Evolution of the digital game industry A lens for seeing the future: Games 5
  6. 6. William Gibson* on the Game Layer “The future is already here. It’s just not evenly distributed.” *American-Canadian speculative fiction novelist who has been called the "noir prophet" of the cyberpunk subgenre. Gibson coined the term "cyberspace" in his short story "Burning Chrome" (1982) and later popularized the concept in his debut novel, Neuromancer (1984). 6
  7. 7. Education Market Overview Education U.S. $1.45 trillion K12 U.S. $688 billion School Parents University/ Grad school U.S. $535 billion Credentialed/ Accredited Lifelong Learner Skills Enhancement U.S. $225B Professional/ Employee U.S. $131 billion Consumer $94B Languages U.S. $83B Test prep U.S. $11B Guitar, arts, programming?? 7 Sources: Moksa Ventures analysis, NeXt Knowledge Factbook , Trainingindustry.com, U.S. Bureau of Economic Analysis, American Society of Training & Development (ASTD) 2012 State of the Industry Report, GSV Advisors 2012 Education Sector Factbook eLearning Share: $5B -- $60B + apps $17B --$24B + MOOCs/apps $9.6B (pro/emp) $30B (language) + MOOCs/apps = “informal education”
  8. 8. EdTech Adoption Challenges Institutions vs. Consumers • Institutions (K12, University/Grad, Corporate)  Budget constraints  Long purchase cycle  Lack of proof of effectiveness  Cultural resistance  High consolidation (K12) BUT  Big dollars, big win if capture • Consumers  Fragmented, high spend to reach and acquire BUT  Eager, fast adopters, high growth rates, test models 8
  9. 9. Educational Tech Hype Cycle -- Gartner 9 Sources: Gartner
  10. 10. Venture Investment In EdTech 10 Source: National Venture Capital Association, Crunchbase, Edsurge $150m $580 m 0 20 40 60 80 100 120 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Educational Technology Deals Deals
  11. 11. Entrepreneurial Vigor In EdTech 11 Source: AngelList. 258 companies, 824 angel investors interested in educational technology, games in education 0 20 40 60 80 100 120 140 160 180 200 2010 2011 2012 2013 “Educational Games” Company Listings Educational Games
  12. 12. Areas of Investment Focus – Trends • Content ▫ Interactive texts, multimedia, online • Learning ▫ Adaptive learning and GAMES!!! • Learning infrastructure ▫ MOOCs and learning management systems • Validation/Assessment ▫ Credentialing, assessment, peer feedback platforms 12
  13. 13. Prominent Investors in EdTech 13 Non-Profit Return-Seeking/For-ProfitStrategic (Pearson) (MacMillan) $500 Million collectively pledged for education starting 2010 forward $2 Billion+ collectively invested for education in 2002 - 2012
  14. 14. Thank you For more information: Stephanie@moksaventures.com 310-210-2130 14
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