As silly as it may seem, literacy within video games is a fantastic development for children to be introduced to. For example, I know many of us have heard of Skyrim recently. The fantastic part of this game is that there is almost an unlimited number of characters and books to interact with. All of the books contain some sort of "diary" entry, history of Tamriel (the world the game takes place in), or some sort of "instruction manual" for something random.
Speaking as a nerd, I absolutely love delving into the ones that deal with the history of the countryside, even if it is completely fictitious. It provides a fantastical mental journey that I can enjoy even more because it helps me become better immersed within a world not like this one, which is the exact point of fiction, is it not? Playing a game like Scrabble or Boggle or something along those lines is a great way to practice vocabulary and exercise creativity with what's provided. In just as valuable a set-up, I feel that being able to have people read within a game that they are already fully enthralled in is absolutely one of the better ways in which we as educators could get children to be enthralled.
I also recently found out that some schools overseas use the game Little Big Planet in order to teach physics, general problem solving, and enhance creativity. While I don't know how I feel about this as an educator, as a student I think I would be in heaven if a teacher incorporated "real-world issues" into something as simple as a game that I enjoyed. It may be going too far to incorporate video games into the classroom, but I also know that making and sharing a text-based adventure game and a simple craps game in Computer Science were amongst the top memories of my college classes.