Old School, New Tricks: e-Learning Games Thrive in Covid-19 Pandemic

Old School, New Tricks: e-Learning Games Thrive in Covid-19 Pandemic​

The Story

With schools around the world shutting their doors due to coronavirus, online learning games have been making the grade. The Covid-19 pandemic, disrupting over 1.7 billion students’ education, is widely seen as having accelerated the growth of the education app market, which will be worth an extra $47 billion, or 26%, by 2024 (EdTechX; Technavio). Duolingo, a language-learning tool, gained 30 million new users during March and April last year, while Quizlet, a digital flashcard service, saw a threefold increase in interest from outside the US (EdSurge). Olso-based Kahoot! also scored top marks, with around two billion people taking part in its multiple-choice quiz games in 2020.

Education apps typically adopt a ‘freemium’ model; a basic version of the app is available without charge but there is the option to subscribe for extra features or no in-game advertising. Around 80% of Duolingo’s $200 million revenue last year came from the 4% of its users who subscribe (Wall Street Journal). Similarly, only around 5% of the 100 million students who use Canadian maths app, Prodigy, are on a paid plan (Financial Times).

Though not all agree with ‘gamified’ learning, many argue that it is a “refreshing way to teach”, which engages students by tapping into their “primal competitive streak” (Financial Times). Furthermore, it can be both helpful and motivating to visualise a given topic as a game level, which users can ‘pass’ by completing several exercises. “People love filling up progress bars”, explains Luis von Ahn, Duolingo’s founder; “if … you get somebody to 75% of that bar, they will go to 100%” (Financial Times).

Gamification has also been recognised as a means of enhancing corporate training. Hiscox, an insurance company, recently commissioned an underwriting simulation which takes staff through a number of realistic scenarios. Meanwhile, PepsiCo has created a virtual warehouse and bespoke training tasks within popular video game, Minecraft.

What It Means For Law Firms And Businesses

Law firms have been advising e-learning companies and their investors on various fundraising rounds to provide capital for future expansion. Fenwick & West represented Quizlet in its $30 million Series C round, while Duolingo turned to Latham & Watkins for advice on a $30 million Series F round. Just last month, TPG Growth led on Prodigy’s $125 million Series B fundraising, advised by Weil Gotshal & Manges. Such are the perceived opportunities in the education technology sector that some venture capital firms focus on it exclusively. One example is Owl Ventures, which recently closed two new funds worth $585 million, with Cooley acting as legal counsel.

Increasingly, legal advice is being sought on partnerships between education apps and other technology companies. Kahoot! quizzes will soon be able to be integrated into Zoom calls, and TikTok users can already include links to Quizlet study sets in their videos.

Challenges lie ahead, too. Processing children’s data comes with special requirements, in particular the need to obtain parental consent under Article 8 of the GDPR in the EU and §312 Children’s Online Privacy Protection Act 1998 in the US. Then there is the question of how education apps advertise to younger users; a complaint filed last week with the US Federal Trade Commission alleges that Prodigy’s in-game advertising “subject children to relentless commercial pressure” (Financial Times). These are serious concerns; ignoring them would be a schoolboy error.

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