Business Opportunities for the Educational Games Industry Guidelines for a Strategic Shift Rosário Cação ABSTRACT Companies that develop games for educational purposes have good reasons for defending the use of games in learning contexts. Yet, they face severe problems that commercial games companies do not have. We propose a group of solutions for educational games companies make a successful strategic shift. These solutions not only will bust their business but will also promote a more effective and frequent use of games in learning contexts. Author Keywords Games, educational games, commercial games, edutainment, learning, instruction ACM Classification Keywords K.8. Personal Computing: Games INTRODUCTION The competitiveness of a country or a company is played around the skills of the human resources. Maintaining or improving the competitiveness of the country, of its companies and the workforce competitiveness is a major concern. No doubts on this. The lack of consensus is how to do it. The effectiveness of traditional instruction models has been questioned and it has been recognized the need to understand better how students learn and to design and implement new tools and strategies that will improve learning outcomes that will enable progress. As Kelly (2005) claims, “progress is measured in four different ways, based on the extent to which a new tool or approach 1) increases the speed at which expertise is acquired and depth of understanding achieved; 2) increases a learner’s ability to transfer expertise acquired to the solution of practical tasks; 3) decreases the range of outcomes among learners; and 4) makes learning more motivating (and more fun), if only to get more time on task”. Games are a serious candidate to achieve this progress and to improve effective learning outcomes. They are a widespread social phenomenon and although some problems relating to their implicit violence, addictive and time consuming nature, they are being presented as an effective learning tool where the motivational power of games is harvested. The game industry has conquered millions of fans all over the world and generates enormous sales profits while strongly investing in design research. Meanwhile, some companies that develop games for explicit educational purposes - the so called ‘educational’ game industry, struggle with market fragmentation problems on a relatively small market, budget constraints, lack of efficiency validation, incompatibilities with the actual instruction paradigm, and some antagonism from parents and schools regarding the usage of games for learning purposes within classrooms. Facing severe problems, the educational games industry has to make some market positioning and strategic changes. These companies have to work hard to provoke a radical change in the actual instruction paradigm and prepare parents and teachers to a game-based learning. Moreover, the educational games industry has to focus off learning and declare fun as the primary feature of educational games. This paper starts by making a small note about the nomenclature problems and confronts commercial and educational games. It claims that games have an irrefutable role in contemporary societies, which makes them a serious candidate tool to be used in formal learning contexts. Next, the paper discusses the reasons why games should be used in classrooms, as well as the conditions for them to be effective. Finally, it presents some solutions to bust the educational games market and improve the financial health of the educational games company. The Nomenclature Problem Most of the literature dedicated to the study of the usage of games in educational contexts differentiates “commercial games” and “educational games” (British Educational Communications and Technology Agency, 2006a, 2006b; Entertainment and Leisure Software Publishers Association, 2006; Federation of American Scientists, 2006; Kirriemuir & McFarlane, 2006). The first includes games developed for pure entertainment and to be used in recreation situations. Their purpose is to provide engaging and motivating moments where fun is the primary output. The “educational” games include those that are developed with pedagogical concerns and are to be used in specific learning situations with well defined learning objectives. Also called edutainment (A. Mitchell & Savill-Smith, 2004), the educational games aim to combine education and entertainment and reflect the idea that entertainment can be educational. The commercial vs. educational differentiation is not very accurate for several reasons. First, most of the companies that develop games are commercial companies in the sense