In a series on gamesandlearning.org, Sande Chen is digging into the state of educational games. (We discussed Part I of her series here.) In Part II, she analyzed funding sources for educational game developers.
Overall, the news about funding is mixed. There are more sources now than there were in the golden age of educational games (the 1990s), but there’s more competition and red tape, too.
Funding sources include foundation grants, government grants, contracts with textbook companies, corporate sponsorship, and venture capital. And lots of educational game developers use the old-fashioned bootstrap method to get their games out there—that means they fund much of the development themselves.
One notable funder is the U.S. government’s Small Business Innovation Research (SBIR) program, which provides more than $2 billion a year for research and development. The big advantage of SBIR grants is that they have no restrictions on commercialization. That means the developer gets to keep all the profits. In 2015, 27% of ed game survey respondents said they had applied for a government grant. That’s compared to 16% in 2005. The downside is that applying for these grants can be both competitive and complex.
Corporate sponsorship can also be a way to go for game devs, but it can be tricky to navigate ethical concerns about marketing to kids—and to stay on the right side of the COPPA privacy laws. Chen’s advice? “When approaching corporate sponsors, think about what would be compatible with the game. If it’s a game about recycling, would a waste management company be suitable? Think about the game’s target demographic and why it would be advantageous for the corporate sponsor to reach this age group. If done tastefully, corporate sponsorship may turn into a mutually beneficial partnership.”
Another source of funds for devs is, of course, crowdfunding. Kickstarter and other crowdfunding sites offer developers a chance to get their games off the ground, but it’s not easy. Campaigns take a lot of time and effort and oftentimes fail.
For developers of mobile games for young kids, venture capital may be an option. Games that teach kids to code are a hot commodity, too, and they’re expected to remain so. (For examples of good educational apps for kids, check out Nicole Tanner’s Ana’s Apps series.)
The takeaway? While Chen’s survey of educational game developers found that there are a lot of sources out there, it also found that developers struggle to build sustainable businesses. Even if a game is ready to go, marketing and distribution takes a lot of additional capital. Chen observes: “In 2009, after evaluating the business of serious games, Merrilea Mayo, then of the Ewing Marion Kauffman Foundation, discovered that games supported by grants or made in universities don’t tend to get proper marketing. One reason could be that academics are rewarded more for peer-reviewed journals than the commercial success of a game. Furthermore, it takes money to market a game, generally 40-50% of the budget.”
That’s not so much of a problem for the entertainment game developers who are beginning to develop educational support or special educational versions of their games. MinecraftEdu.com is a leading example of this trend. We look forward to Part III of Chen’s report, when she’ll address that aspect of educational game development.