Math Blasts a Niche in Video Game Market : Computers: Two South Bay software companies are successfully blending education and entertainment.
Give kids Nintendo and they play nonstop for hours. Throw a few lessons in and they start yawning.
Such has been the thinking in the computer game business.
But two South Bay computer software companies have capitalized on a growing demand for educational software, bucking conventional wisdom that youngsters go for bloody fighting games such as Mortal Kombat to the exclusion of programs with characters who add and subtract.
The companies’ successes have been a result of combining entertainment with education. Recent software products teach children how to do math, find places on a map, even balance a budget, but still let them zap asteroids or wind their way through a maze.
Sales of such “edutainment” software helped propel Torrance-based Davidson & Associates from a small start-up business in 1983 to a company that made almost $60 million in sales last year. Davidson’s Math Blaster has sold 1.6 million copies, making it the world’s second-most-successful educational software, after the Carmen Sandiego series produced by Broderbund Software.
And Torrance-based Image Smith is trying to repeat Davidson’s success, which sales expected to double this fiscal year to $6 million.
“There’s a pent-up demand (for educational software),” Image Smith President Dominique Claessens said. Parents want tools to supplement their children’s classwork, he said.
Analysts see the industry growing as more schools move away from traditional textbooks and embrace computer programs.
“The educational software market is not that huge,” said Seth Feinstein, a research analyst at Crowell, Weedon & Co. in Los Angeles. “It’s less than $500 million. But it has a huge potential to be a billion-dollar industry.”
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When Rancho Palos Verdes educator Jan Davidson tried to sell computer programs more than a decade ago, few software companies had considered marketing educational games.
“I was wondering if personal computers could have a positive effect on learning,” said Davidson, 50, president of Davidson & Associates. “At that time, there was no software.”
Her goal was to make educational software as exciting as computer games. Among the first was Math Blaster. In it, a player who answers a problem correctly gets to shoot a man out of a cannon.
But software giants weren’t interested. So Davidson’s husband, Bob, encouraged her to start a company of her own. In 1983, she used their three children’s $6,000 college fund for capital and started selling and distributing Math Blaster and two other titles from their Rancho Palos Verdes home.
“We did everything ourselves,” she said. “We had something like a hair dryer to shrink-wrap the titles. On Thanksgiving, the whole family worked all day assembling the product.”
The company sold $400,000 in software in its first year. Soon Davidson’s business outgrew her home and moved into a Gardena facility. Its biggest growth has been since 1991, when personal computer prices dropped, putting the technology within reach of many families, industry executives say.
Educational software also has started to turn toward CD-ROM technology, compact discs that incorporate sound, music and visuals on a personal computer. Many mainstay programs, such as Math Blaster, have been introduced in CD-ROM versions. Another CD-ROM title allows users to create a computer scrapbook with words, pictures and narration.
In February, Davidson signed a deal with Simon & Schuster, a subsidiary of Viacom, to develop curriculum-based software with the publisher’s educational books division. The two companies also plan to create products for Simon & Schuster’s list of 300,000 consumer titles. Included will be a multimedia investment guide based on Peter Lynch’s bestseller “Beating the Street” and an interactive children’s book called “Chicka Chicka Boom Boom,” featuring singer Ray Charles.
“The idea is not to dump a book on a disc,” said Bob Davidson, who joined the company as chairman in 1989. The Lynch book, for example, will graphically describe Lynch’s investment strategy, with the Wall Street wizard offering anecdotes and advice.
Still, industry analysts say that store shelves already are flooded with software and CD-ROM titles. The Davidsons--who control their own distribution network--should not have much trouble, but smaller firms might, said Feinstein, the research analyst.
“It’s much more difficult to get established now than it was 10 years ago,” he said. “It’s gotten much more competitive.”
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Image Smith, which started in 1991, has depended on cartoon characters such as those from Peanuts and the Flintstones to grab the attention of children and their parents, rather than creating its own characters.
“There’s tremendous recognition,” said Claessens of Image Smith. “No doubt that you can save some in advertising. But a lot (of the licensing agreements) cost 10% of sales.”
The company’s Yearn 2 Learn titles--one focusing on Peanuts characters and another on Snoopy--have sold more than 150,000 copies since first released in January, 1993.
Claessens got his start on the design side of the computer business. In the 1960s, he and his father developed an electronic graphic design system that was used by clients such as Heineken, the beer-maker, to develop logos and packaging. For a time, they marketed the graphics system hardware to companies until they sold the system for $50 million in 1989. Claessens launched his software company two years later.
“Until recently, there was not money in (educational software), so no one went after it. Everyone went after games,” Claessens said. “Now the potential for growth is faster than other areas.”
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From the former headquarters of a Sepulveda Boulevard machine shop, Image Smith’s employees put the initial touches on a new Flintstones program. Computer animators use Hanna-Barbera guidebooks that describe how the likes of Fred Flintstone and Barney Rubble should look, walk, talk and eat.
The first title, a Flintstones coloring book, debuted in June, and Claessens is encouraged by the sales. It is part of a deal with Turner Publishing, which owns the marketing rights to the animated Flintstones.
Even using cartoon characters, Claessens has not lost sight of educating his young customers.
In an upcoming Peanuts program, players try to piece together all 50 United States. If a player puts a state in the wrong place, characters say “Oh, bummer, man.” But when the youngsters get it right, the characters give them a cheer.
