Can Leapfrog survive given the declining price points of multi-purpose devices (i.e Fire, Ipad) and the proliferation of high quality educational apps for children?

Actually, the price point of Leapfrog's iPad-influenced LeapPad is $100, and that could work for three reasons:

• As a parent or gift-giving uncle, I'd rather buy the kid something for $100 than $200 (Fire) or $500 (iPad). Less fear of it breaking at that price point.

• It's not general purpose like Fire or iPad, so I don't have to worry about non-kid-friendly-content working its way on there.

• The Kindle demonstrated that having a specialized device (that doesn't have distraction of non-educational games or the Web) can sell well.

So it all comes down to the LeapPad itself: is it good?

If so, yes, they can not just survive, but thrive.

I'm not so sure but an interesting perspective. Here's how I'd think about your points:

1) It actually depends whether you're a parent or gift giving uncle as you think about cost. As a gift giving uncle who is only giving one present, perhaps. As a parent, you need to factor in the cost of $20-25 modules going forward as well vs <$3 apps and a range of apps that are actually reasonably high quality and free (see Callaway Arts and Oceanhouse as example publishers)

2) I believe Fire has the ability to lock in a certain app so that kids dont have access to other non kid-friendly apps and I'd guess that the ipad/iphone will as well over time. I do agree that this is a real issue though.

3) We'll see whether that continues to be the case

My personal perspective is that Leapfrog and otehrs like it are dead men walking...

Justin, I like the concept of a locked-down Fire for kids.

Yes, once a kid uses an ipad or ipod touch s/he is hooked. If it were priced at $100 it would be unstoppable.

In any case Leapfrog will have to do like Nintendo Wii and be differentiated on something other than price. And even then it will have to compete hard.

I think the LeapPad is probably doomed, for a variety of reasons including that one.

Game console launches have a less than 10% success rate [cite needed]. For every incompatible new platform that sells in huge volume and gets a good library of games written for it, there are many that launch with a small set of games and die before more than a handful more are released. Sometimes it is breadth of titles that makes a winner. I think that is the case with the XBox. Porting PC apps was easy enough that nearly everything came out on it. For some, eg most of the successful Nintendo platforms, it is a single flagship game or franchise that forces people to buy the console.

They are trying price points that are rare in kids mobile apps. I don't think there is much in the Android store above $4. I have not looked for iPad and there is not much in the WebOS store at all and most of it is below $1. Selling $25 games in universe should be difficult.

I've no idea how easy their dev process is, but the fact that they don't seem to have many apps that are also available on other platforms implies that either access to their market is tough, porting existing games across is tough or that sales have not yet generated interest from other developers.

And yes, as you imply economies of scale will quickly make general purpose hardware that is much better sell at the same price.

The one thing LeapPad does have is shelf space in toy stores.

For now.

But your points are good ones.

Worst case, they pull a Sega and publish on the devices already in peoples hands. They've got a strong enough brand to become dominant in the app sore. Look how well established names are doing, such as EA and what not.

It is really hard for a hardware company to become a software company, but your examples of Sega and EA do light a potential path to success.