Whether they’re aimed at teaching basic knowledge to schoolchildren, fighting social problems, or helping older adults keep their minds sharp, games with a purpose are catching on. And in a niche with lots of room for innovation, it may be better to be a small player than a big one.

Canadian startups find opportunity in educational games

In four years as a graduate student at the University of Guelph, Jeremy Friedberg developed a passion for teaching, but also learned how difficult it could be to teach complex biology concepts with words, paper and a blackboard.

When he asked for advice and a former professor suggested plasticine, Friedberg started on a path that eventually led him to build an award-winning software startup.

Three-dimensional models were so helpful in the classroom that “I started using those techniques more and more, and I started experimenting with 3D animation,” Friedberg recalls. In 2007, he founded Spongelab Interactive, a company that makes educational games for school and consumer use and does custom game development for publishers, universities and others.

Toronto-based Spongelab has only eight full-time employees, but won the National Science Foundation’s International Science and Engineering Visualization Challenge award for interactive games two years running. Its games – including The History of Biology and Genomics Digital Lab – are used in 65 countries, Friedberg says.

The firm is just one example of a burgeoning set of start-ups across the country that are finding a lucrative niche in the educational games market. While large video game studios are focused on the multi-billion dollar consumer market, smaller studios are raking in big revenue by creating so-callled serious games that are put to use for social good – as learning tools for students, healthcare assistants for those with chronic disease, and mental exercises for the elderly.

At about the same time as Friedberg was launching Spongelab, Michael Cole started Vivity Labs Inc. in Vancouver. Vivity’s line of FitBrain games are designed to improve memory and concentration. Cole says the biggest market is adults between 30 and 60.

“I wanted to build games that had a more positive impact,” says Cole. He had previously co-founded Mountain View, Calif.-based Quixit, now HappyNeuron, Inc., to make cognitive training games. He left there to start Vivity with the goal of creating more entertaining educational games, and did so in Vancouver because “this is a world-class hub for gaming.”

Cole raised capital for Vivity in 2008 from a handful of major B.C. technology investors. He says the global recession meant the company grew slower than he had hoped, but about 250,000 people visit its web site monthly. This year Vivity launched its first iPhone and FaceBook games, and in January it plans a new iPhone game to promote walking for exercise.

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Ferma Ravn Greenway was a social worker teaching schoolchildren about ecology when she, her animator husband and a third partner who is a programmer decided to try using an online virtual world to get the message across. They founded Ecobuddies in Vancouver in 2007. Greenway says educational games are becoming more and more popular.

Another Vancouver company, Ayogo, developed a FaceBook game called HealthSeeker that helps diabetics improve their lifestyle. Ayogo worked with the Berkeley, Calif.-based Diabetes Hands Foundation and  the Joslin Diabetes Center in Boston, and received funding from Boehringer Ingelheim Pharmaceuticals, Inc.

Michael Fergusson, Ayogo’s co-founder and chief executive, says people like the idea of playing while at the same time accomplishing something of value. “I think people have got their heads around the idea that games and play are not just something for kids,” he says.

And Fergusson says it makes sense that startups are doing well in this space, for a couple of reasons. First, it’s an emerging market. “In any new space,” says Fergusson, “the startups always have the advantage. We can do something that makes us a million dollars – we don’t have to make $10 million.” And the niche nature of the market not only makes it less attractive to big companies, but also makes interaction with individual customers more important.

But there are challenges. For those designing games for the educational system, one of the biggest is the rigidity of the system and the difficulty of change. “Teachers are so overworked and there’s only so many hours in the day,” Friedberg says. Introducing new technology can be difficult because of security concerns and bureaucracy. Spongelab tries to minimize the problems by designing games that can be played through a browser and offering single-user licenses for $20 so teachers can try them easily.

Educational and serious games must also meet expectations created by slickly produced, big-budget consumer games, says Cole. Children especially are used to high-quality graphics and effects, so educational games must strike the right balance between the educational component and entertainment.

Part of the key to that is having the right mix of skills. Vivity – with 12 full-time employees – has both educational and game-building expertise. Some of its programmers and artists previously worked at games giant Electronic Arts. “I have people who’ve built like $25-million games,” Cole says.

Greenway says many of the kids who join Ecobuddies are there primarily for the fun. “Our goal is to be a really fun game and then to have education content in the background,” she says.

Of course, Greenway adds, the recession made things tougher. “It made getting funding a lot harder.” She credits government programs, such as the Scientific Research & Experimental Development (SRED) tax credit and the National Research Council’s Industrial Research Assistance Program (IRAP) for helping Ecobuddies get its product to market.

Despite the challenges, some Canadian educational games companies are thriving. They may not  be as big as Electronic Arts or Microsoft, but as Friedberg puts it, “we’re doing something that is important and we feel very good about the work that we’re doing.”

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