Software for kids grows up - Computer Product Retailing

Discount Store News, Jan 1, 1996 by Pete Hisey

NATIONWIDE CPR REPORT -- Software aimed at kids is a booming business. The category now accounts for 15% of overall software sales, up from a mere 2% a few years ago, and at the mass level, publishers estimate that the figure may approach 30%.

Find/SVP studies credit this rise to the increased use of PCs in middle-class and lower middle-class families--mass merchants' best customers. Consequently, retailers are beefing up their selections--and so are publishers.

The past few months have seen significant shifts in the marketplace, among them improved packaging, deeper content, sharper price points and an increased use of licensed properties.

Pricing changes have not been as dramatic as forecasted a year ago, but significant numbers of "A" titles are now less than $30 at retail, and some are less than $20.

"We're looking to grab a slice of the 98% of people who don't regularly buy software," noted Saban's David Koch. "At $15 or so, a kid can save up his allowance to buy one of our titles, and a parent can buy it without agonizing over price."

Softkey's rapid growth, with its purchase of MECC and The Learning Company, will undoubtedly push prices down in the coming year. The budget-priced giant can offer highly visible titles at bargain prices, forcing other upper-end developers to match the price.

Sanctuary Woods' Suzie O'Hair noted that mergers and the move into blue-collar homes have changed the sales proposition. "We're not selling to two MBAs with a BMW in the garage anymore."

In packaging, the industry seems to be shifting to smaller, tougher and more retail-friendly packs. Saban has led the way with crush-proof, slim packages that can be stacked, pegged or shelved with ease.

The major change this year, though, is the sheer quantity and ever-increasing quality of kids' software.

3- to 6-year-olds

With the outpouring of titles aimed at children ages 3 to 6, brands familiar to consumers are becoming a necessity. Publishers targeting this age group include:

* Viacom: Nick Jr. Math, which kids can play alone or with parents, keeps a running scorecard on the child's progress to help parents isolate trouble spots.

* IBM Multimedia Studio: Its new Kid Riffs musical title teaches kids to play the keyboard through simple games that involve clicking on animals to pick out tunes that can be played back. In the upcoming The Jungle Book, kids learn animal languages and communicate with game characters through a microphone and voice recognition feature.

* Palladium Interactive: The start-up is preparing titles for '96 based on the PBS hit show "Wishbone," about a winsome puppy that stars in literary classics. The software, due this fall, will incorporate educational components. About half of Palladium's output (four multi-packs featuring hit titles by front-line publishers, priced at about $30 for a fivepack) will involve licenses. The others will feature characters developed in-house.

* Davidson: Reading Blaster Jr., the first early-learning title in its Blaster series, is already shipping. Characters in an intergalactic Blastership send players personalized e-mail as the crew makes its way to four planets, each concentrating on a particular reading skill. Younger kids get phonics training, eventually writing their own storybook.

* Kid's Count: The startup's first title, Jack's House, imparts practical lessons as preschoolers explore a surprise-filled house, as well as suggesting family activities away from the computer.

* GT Interactive: The publisher has signed exclusive agreements with L'il Critter and The Berenstain Bears creators Mercer Mayer and Jan and Stan Berenstain.

* Living Books: Dr. Seuss' ABC will be followed up with a rollout of titles based on Dr. Seuss characters, with a focus on pre-reading and pre-math skills. Also coming are Just Dad and Me and Just Mom and Me. These are follow-ups to Just Grandma and Me, only with greater interactivity.

* Digital Kids: Kids On Site gives youngsters an up-close look at the everyday world of construction and challenges them to operate the machinery.

* Maxis: Maxis enters the preschool market with Marty and the Trouble with Cheese, a voice-activated title in which characters respond to spoken instructions as the child helps a mouse forage for cheese and sneak it past a sleeping cat.

6- to 9-year-olds

Children ages 6 to 9 have too often been lumped together with younger siblings. While many still are fascinated with animation and cute characters, they need products suited to their sensibilities. Publishers producing software for this group include:

* Sanctuary Woods: NFL Math, the newest title, is aimed at kids ages 7 to 10, and uses NFL statistics and players to provide math lessons. Franklin's World of Math, due this quarter, is aimed at 4- to 7-year-olds and features the popular turtle character from Scholastic Books.

* Digital Impact: Ozzie's Travels-Destination: Mexico explores Mexican history, challenging kids to design a pyramid, create an Aztec calendar or build a pinata. The activities and a built-in coloring book and drawing program deliver an educational message. Titles exploring Japan and India will arrive later this year.