Microsoft Corporation &
4Kids Entertainment, Inc.
Table Of Contents
ESL Games – The New Market Opportunity 4
The Need For B1 Games and 4Kids ESL
Erikson’s Stages of Development 5
ESL and Branding: The Perfect Marriage 8
B1’s Innovative Media-Based ESL Program 8
Viva Piñata! 9
Revenue Model for ESL Games 11
Sources of Revenue 11
B1 at a Glance 13
Exploiting New Technology 13
B1 Games Mission/Vision Statement 14
Appendix A: Distribution Channels 15
Appendix B: Consumer/Marketing Mix 16
Appendix C: Games Produced by B1 17
ESL Games – The New Market Opportunity
Baby Einstein: A Case Study:
Despite marketing claims, parents who want to give their infants a boost in learning
language probably should limit the amount of time they expose their children to DVDs and
videos such as "Baby Einstein" and "Brainy Baby."
Rather than helping babies, the over-use of such productions actually may slow down
infants eight to 16 months of age when it comes to acquiring vocabulary, according to a
new study by researchers at the University of Washington and Seattle Children's Hospital
The scientists found that for every hour per day spent watching baby DVDs and videos;
infants understood an average of six to eight fewer words than infants who did not watch
them. Baby DVDs and videos had no positive or negative effect on the vocabularies on
toddlers 17 to 24 months of age. The study was published in the Journal of Pediatrics.
"The most important fact to come from this study is there is no clear evidence of a benefit
coming from baby DVDs and videos and there is some suggestion of harm," said Frederick
Zimmerman, lead author of the study and a UW associate professor of health services.
"The bottom line is the more a child watches baby DVDs and videos the bigger the effect.
The amount of viewing does matter."
Co-authors of the study are Dr. Dimitri Christakis, a pediatrics researcher at Seattle
Children's Hospital Research Institute and a UW professor of pediatrics, and Andrew
Meltzoff, co-director of the UW's Institute for Learning and Brain Sciences. 1
The Need for B1 Games and 4Kids ESL Brand
We feel there is a great opportunity in creating and selling ESL Games using high profile
and successful properties. Riding on certain brands’ built-in audience and dollars spent on
marketing those brands, we believe ESL Games will sell substantial units in this
marketplace. Globally, ESL is growing significantly. B1 believes that an opportunity
exists by launching products and services that meet this vital market demand while
strategically targeting this new market.
Erikson’s Stages of Development
The best way to learn is to have fun. Interactive games are intuitively fun while teaching.
Eric Erikson (June 15, 1902 – May 12, 1994) was a developmental psychologist and
known for his theory on social development of human beings. Erikson developed a stage
theory about how children grow and develop psychosocial skills. Psychologists consider
Erikson’s Developmental Stage Theory the standard to understanding the stages of
learning and growth in children through adulthood.
Eriksons Stages of Development are:
Level Name Characteristics
Stage 1 Hope
Trust vs. mistrust
A child will only learn trust if its
mother meets their deep need for
attention and affection
Stage 2 Will
Autonomy vs. shame and doubt
(Around age 3)
If the exploring child receives
encouragement in their search for
autonomy, they will learn trust,
otherwise they learn shame and
Stage 3 Purpose
Initiative vs. guilt
(Around age 4)
If the questioning child is
encouraged in their ideas and
games, they will gain confidence,
otherwise they feel guilty about
initiating things themselves.
Stage 4 Competence If encouraged and praised by
Industry vs. authority
teachers, the child will increase
efforts to learn. If always
criticized, they will learn to feel
It is to these Stages of Development that we will cater and create a variety of ESL Games.
The breakdown of the games will follow the various development stages in children and
address the basic learning needs and characteristics of that stage.
We live in the information age where knowledge and the ability to communicate is
paramount. With the rapid onset of globalization, English has rapidly become the common
language of the world. Learning English in traditionally non-English speaking countries
has transformed from an elective for the privileged elite to a requisite of basic education
for the masses. To speak and understand English has become virtually a requirement in
our global world.
It is estimated that currently one billion people around the globe are learning English as a
second language. In the next ten to fifteen years, this market is expected to double to two
billion. The British Council estimates that global revenue for ESL education in 2002 was a
staggering $652 million. With the continued emergence of untapped markets worldwide,
particularly those in China and India, these numbers can be expected to grow exponentially
in the coming years.
Increasingly, consumers across the earth will be seeking all methods possible to learn
English as a second language in order to be part of the new global society. More
importantly, they will be seeking products that can teach their children in an effective,
efficient, and fun manner.
Technology innovation is transforming entertainment. As consumers adopt new
technologies, they are demanding more for their dollars. This market presents an
enormous opportunity for ESL Games to take a significant market share. This being a
fairly new market, and one in which is growing at a sizable rate, the upside for revenue in
this category is substantial.
The penetration of DVD players is reaching nearly every household. At the CES
convention in January of 2006, it is estimated that sales of DVD Players in 2005 has
increased over 10% from the year before increasing DVD penetration into almost 75% of
ALL households in the U.S. This increase means that the Installed Consumer Base of
DVD players amounts to over 150 Million US Households that have at least one DVD
player. This is a tremendous installed base of existing machines that is fueling the growth
of this emerging market.
As consumers have a variety of entertainment choices – we are seeing another phenomena.
In 2006 DVD Households will surpass Internet Households for the first time. In addition,
NDP, a leading market analyst for the game and consumer electronics industries, has
reported that 2005 was a Sales Boom for Consumer Electronics and Information
The explosive growth in Digital Television Set Sales coupled with the explosive growth
(as illustrated below) of DVD Players is creating a new home theater experience for the
American consumer – it is for this reason that consumers are demanding ever growing
choices for their entertainment dollar. ESL Games represent an opportunity for growth in
an exponentially growing installed consumer base.
Another area of growth for ESL Games is in the world of online casual gaming and ‘safe’
community sites for children. The internet is the primary distribution channel for casual
Millions of today’s kids are supplementing the activities of the traditional hardscape with
virtual, more-animated worlds. There, they can become penguins, elephants, fashion
stylists to the stars and yes, Piñatas.
Most casual games are either downloaded as limited-time trials or delivered as Flash or
ActiveX objects embedded in a web page. Some websites, such as Pogo.com, create
casual games as a web-only experience first, then follow up with more advanced versions
as "downloadable" games.
We see this with the added component and ease of a DVD product as well. In addition to
online portals, casual games are increasingly available at major retailers, particularly Wal-
art, Target and Best Buy.
While the rising demand for ESL products is undeniable, there is a surprising lack of
quality content on the market. Surely this lack of content, and particularly a lack of
branded content present an excellent market opportunity. The demand is present and
growing. The market is light on product. The next step, clearly, is to meet the demand
with excellent products.
ESL and Branding: The Perfect Marriage
Branded ESL learning programs are a perfect opportunity to meet this clear need for both
established and emerging markets around the world. The combination of educationally
proven programs delivered by internationally recognized brands and characters is a perfect
solution to meeting this unprecedented demand.
With the current and growing prevalence of accessible media technology around the world,
more and more consumers will seek interactive, media-based ESL programs that they can
follow in their own homes.
B1 Game’s Innovative Media-Based ESL Programs
To this end, B1 Games has developed an innovative, UCLA and USC educator-endorsed,
multimedia, ESL learning program. Based on a series of engaging, interactive games, the
youth-targeted system can be applied to ESL learners from all countries. This program
then integrates branded characters from nearly any property in an entertaining manner that
reinforces brand identity. Our initial programs have been DVD-based to take advantage of
the format’s extremely high market saturation. However, the system is easily adaptable to
any media, including computer, web, and console games. Initial iterations were designed
for appeal to boys and girls ages 3-9, matching property demographics for youth-focused
clients such as Disney.
B1 developed the templates for several different language learning games in association
with educators from USC’s American Language Institute and UCLA’s Department of
Applied Linguistics. The games teach English to kids using words associated with the
films they accompany. The words were chosen with the approval of the educators. The
narrator’s dialog is kept very simple to facilitate non-English speaking children in learning.
Words are reused from game to game to help reinforce learning.
For international versions, the games are recorded in English with the instructions recorded
in the region’s language. The narration of the game can be recorded in the regional
language while the words to learn are spoken in English.
All the games begin with a “Presentation” where the child learns the words for that game.
Next, a demo is shown to illustrate how to play the game. Then the child plays the learning
game either by seeing a word onscreen and finding the associated item, or an object is
shown onscreen and they must choose the correct word associated with it.
1. Piñata Pop-Ups:
• 3 versions of the game with 3 different backgrounds, 10 piñata words in all.
• The piñatas are hidden all around the garden. One by one, they pop out
from hiding. For instance, as the elephant appears, his name - “elephant” -
will show up on screen as the narrator says, “That is an elephant.” The
character and the word will disappear and the next piñata will pop out. Once
we’ve seen them all, the name of one of the characters will appear. The
player must not only remember which piñata character is associated with
the word, but also where there are hiding. Once they have found all the
piñatas, everyone comes out at once to congratulate the player.
2. Piñata Patch!
• 3 versions of the game, 12 words in all.
• We will show three areas of the island. The words will appear one at a time
to teach the names of the 4 items and highlight them. The items will then
disappear from the scene and appear on an interface. The player will be
shown one of the words and asked to select that item form the interface to
place them back in scene where they belong to redecorate the garden. The
player will select each item on the interface and it will move into the
background. Once all the items are back in place, all the items in the setting
Revenue Model For ESL Games
The opportunity in ESL Games is offering the consumer ESL Games that are based on
successful properties and proprietary technology. Revenues will be generated by
distribution of the products through multiple channels. First and foremost will be
traditional brick and mortar as well as through online downloads and programs.
Sources of Revenue
Primary revenue will be generated from domestic and International retail sales of the ESL
In addition to retail sales there are also many partnership opportunities that can generate a
tremendous amount of secondary revenue. Secondary revenue is a bit misleading of a term
because the ‘second tiers’ can make as much if not more than the retail distribution of the
products. There is a tremendous upside to establish partnerships for these games. In
addition to traditional distribution through brick and mortar stores, there is also a huge
upside for these products in i) direct-response advertising, ii) educational distribution to
schools, iii) tutoring sites, iv) sponsorship advertising.
Another area of great potential for exploitation, and one that is growing tremendously is in
the area Casual Games for the web and VOD. We see a revenue being generated from on-
line downloads of the game as well as licensing the game to third party web sites. In
addition to the potential financial opportunities that these partners may bring, they also can
certainly add value in a number of other ways as well.
Casual Games: The term "casual games" is used to describe a rather large and rapidly
growing segment of the game industry. Casual games tend to be those that have simpler
game play and engaging game design.
DFC Intelligence (Game Industry Intelligence Report) has estimated that the online casual
gamers market is estimated to grow to $1.56 billion (USD) in 2008. Emphasizing why
companies and brands need to be involved in the casual games industry, combined, the
audience of consumers attracted to casual games is estimated to be over 150 million
worldwide and growing each year. What this suggests rather clearly is that casual games
have succeeded in expanding the overall games market. This is an area that is presently
underserved in ESL games.
VOD: Since the mid-1990's, video on demand (VOD) was touted to emerge and be the
next big thing. It took until 2004 for VOD to be rolled out in significant numbers. Only
now is the number of video streams measured in the billions.
Kagan Research predicts that subscription VOD will become a $1 billion-plus business by
the end of the year. That number is when people pay for the content in some way. Telco's
with their IPTV offering will generate about $22 million in combined PPV and VOD
revenues, says Kagan. "Approximately $757 million was spent on cable VOD
programming in 2005. Kagan forecasts that number will pass $1.1 billion in 2006."
Kagan estimates there were 26.2 million VOD homes through the last six months of 2006,
growing to as much as 65 million homes within 10 years, it predicts.
Kagan sees a healthy future for ad-supported free VOD, saying: "The increased reach and
reliance on free content has resulted in robust usage trends, making the use of advertising
models increasingly viable…".
It was estimate that advertising on cable VOD was just under $50 million for 2006.
However, Comcast and Time Warner project this market to become very significant by
2009 as more households adopt VOD usage and band-with expands. The companies are
presently expanding bandwith at breakneck speed.
In regards to Marketing and Promotions, their are numerous partners that can create
promotions and promotional tie-ins. The advertising value of these tie-ins has the potential
to gain millions of dollars in media buys that the partners would be responsible for. These
media buys would have a far greater impact on the sales of the items at the retail level than
just the promotion alone. Retailers from Wal-Mart to Bloomingdales love to know that, no
matter what the promotion, the product is getting tens of thousand of impressions.
B1 at A Glance Summary
What is B1 Games creating?
B1 Games is creating revolutionary ESL Games to sell both domestically and
internationally. B1 Games are truly interactive game experiences where children can learn
ESL along with their favorite 4Kids characters.
What experience does B1 have?
B1 Media—the sister company of B1 Games—has been in business for over 10 years
creating groundbreaking games for major studio clients including Disney, Warner
Brothers, Fox, Universal and New Line Cinema. B1 Media has produced over 100 DVD
set-top, DVD flash and DVD ROM Games.
Who is the market?
Families with children from nine months to 6 years of age.
Why are we able to penetrate this market?
With our experience in creating children’s games, our high profile licensees, and our great
partners, we can take a substantial share of the market.
Exploiting New Technology
B1 Media is currently working in new technologies for its Studio clients. These
technologies include HD-DVD, Blu-Ray DVD, Video On Demand, Video IPOD, Cell
Phone Games, Internet Protocol Television and Personal Video Recorders, all of which are
vying to become the “next entertainment application.” B1 Games is in a unique position to
understand and take advantage of these new technologies.
We will be the first game company to produce these games for this new platform. With
added interactivity, much like a console video game and a connection to the Internet, our
games will rise above the rest. Imagine selling a game once, then selling add on packs of
the game over the Internet that consumers can download.
This is an amazing opportunity to take advantage of B1 Games resources and knowledge.
We are planning to create versions of the properties for delivery in some of these new
formats including website, VOD, DVR. This presents a ripening opportunity for an
innovation that can enhance the learning experience for consumer’s and grab a leading
B1 Games Mission/Vision
Our vision is to help bring families together in the living room to share in a fun and
B1 Games is more than just another game company—it’s a social innovation and a world-
class lifestyle brand. Our belief is that audiences deserve compelling media experiences, a
principle which drives our behavior as a company. Our true measure of success will be
that our customers recognize this principle intuitively—that in their eyes B1 Games
becomes synonymous with the best ESL Game experience.
Customers will compare our brand of games to others in the marketplace and be able to see
and experience the difference. That difference in quality of production, higher level of
interactivity, and game play will move them to always look for products with the B1
There are a number of opportunities for B1, 4Kids and Microsoft to work together in
creating a number of cross-platforms for the exploitation and delivery of the ESL product.
Utilizing content from the 4Kids library – Jim Henson Designs, Teenage Mutant Ninja
Turtles, Yu-Gi-Oh!, Cabbage Patch Kids, and of course our favorite, Viva Piñata!
We see an immediate opportunity in creating ESL games for the upcoming Microsoft Viva
Piñata! website. Also, as we all know, Microsoft casual games team is looking for new
platforms for casual games – this too is an area for fun educational ESL product. Similarly
we see that alongside the new Viva Piñata! plush series and accompanying website, we can
also create and utilize our ESL DVD’s by adding a secret code embedded in the DVD that
can be sold alongside (or used as a promotional premium) with the plush. The DVD’s
secret code would work whereby the player puts the DVD in the computer and is sent to
the Viva Piñata! Web-site. A whole area on the site is unlocked whereby the consumer can
get additional games, episodes, or promotional content.
We feel the opportunity is right and we look forward to working with 4Kids and Microsoft
in bringing these innovative products to market.
The chart below shows a portion of the retailers that we expect the ESL Games will sell
into. This is a small sampling of the retailers that are targeted to place the product.
• Mass Merchants
- Best Buy
- Toys R Us
- Circuit City
- JC Penney
- Fred Meyer
• Department Stores:
- JC Penney
• ·Direct Mail/Catalogs:
• Drug Stores:
- Rite Aid
• Specialty Stores:
- KB Stores
- Barnes & Noble
• Grocery Stores:
• Warehouse Stores:
- Taco Bell
- Burger King
Action Venue Benefit
Publicity • National & local
• Critic reviews in
consumer press for
• Guerrilla and street
• Highly targeted to
• Low cost
• Brand development
• TV and Game releases
• Sweepstakes and other
• Promotional tie-ins with
local affiliates and
• Themed blocks,
& events, surrounding
holidays and events
• Highly targeted to
• Low Cost
• Brand development
Internet • Websites, links &
• Fan Databases
• Other children’s affiliate
• Highly targeted to
• Brand Development
• Direct consumer
Retail Distribution • Sales to Retail
• Catalog Sales
• Online Sales
• Highly targeted to
• Brand Development
• Low Production Cost
• High Net Returns
Print • Trade Publications
• Consumer entertainment
• Consumer Magazines
• Brand development
• Cost efficient demo
• Barter opportunity
• Mailing lists
• Opt-in email
• Continuity Campaigns
• Interactive web content
• Highly targeted to
• Brand development
Local Cable &
• X Box Live
• Expands awareness
• Moderate cost
• Brand development
Games Produced by B1
’24’: The DVD Board Game
A Bug’s Life
A Scooby Doo Christmas
A Very Merry Pooh Year
Alice in Wonderland
Alice in Wonderland: Virtual Wonderland
American Chopper DVD Board Game
Atlantis II: Milo’s Return
Batman Big Chill Challenge
Beauty and the Beast
Belle’s Enchanted Christmas
Belle’s Forte’s Challenge
Belle's Magical World
Bionicle: The Mask of Light
Disney Princess Party Vol. 1 & 2
Disney Princess Stories Vol. 1 & 2
Doug's 1st Movie
Harry Potter 4: Goblet of Fire
Harry Potter: To The Graveyard and Back
Inspector Gadget II
It’s Your Birthday With Winnie The Pooh
Justice League: The Brave and the Bold
Kangaroo Jack G’Day USA
Lilo and Stitch’s Island of Adventures
Lion King 1.5
Lion King II: Simba's Pride
Lion King Special Edition
Little Einsteins: Disneypedia
Little Einsteins: Meet The Team
Little Einsteins: Navajo Maze Set-Top Game
Little Einsteins 2: Spot It Set-Top Game
Many Adventures of Winnie the Pooh
Oliver and Company
Patch's London Adventure
Peter Pan II: Return to Neverland
Piglets Big Movie
Polar Express Christmas Challenge
Recess School's Out
Rescuers Down Under
Rainbow Brite and the Star Stealer
Scooby Doo and the Lochness Monster
Scooby Doo: Blast the Monster Challenge
Scooby Doo: Escape From the Ankh Chamber
Scooby Doo: European Travel Challenge
Scooby Doo DVD Board Game
Stitch! The Movie
Superman: The Last Son of Krypton
Tarzan & Jane
Teen Titans: Divide and Conquer
The Book of Pooh
The Country Bears
The Emperor's New Groove
The Santa Clause
The Santa Clause 2
Tom & Jerry: The Great Space Chase Game
Superman: Little Piece of Home
Who Framed Roger Rabbit