In the 1990s, the market peaked for educational software with the birth of the CD-ROM industry and titles like Knowledge Adventure's "JumpStart Preschool" and Microsoft's "Encarta" encyclopedia prodcut. But as children became more sophisticated and more information was available from the Internet, educational software titles became increasingly obsolete, and educational software companies failed to innovate.
"In the 1990s, there was a one-size-fits-all mentality, and `Reader Rabbit' and `Carmen Sandiego' were big hits. They fit the customers' needs at that time," said Jessica Lindl, vice president of marketing for Riverdeep Inc., which now owns both those classic titles after a string of acquisitions. "But the customer has changed dramatically over the last five years, and we were not meeting our customers needs."
In order to increase their market, software companies have big plans to make titles more 3-D and game-like in their interface. There will be more Web-based features and versions for handhelds. But, jump-starting sales won't be easy, analysts say.
The educational software market does have one good thing going for it—parents. Parents have always been willing to buy software that helps kids do their homework and prepare for tests. And that's where these companies are aiming.