As a primary school teacher I am often sceptical about electronic phonic games as they are often phonically incorrect or have phonic 'flaws', however I bought this for my 'just' four year old and he loves it! It is phonically correct and it reads 2 letters as one sound when they make one sound for example e and a as 'ee' when in the word 'sea'. It uses letter names as well as sounds (something which is now mentioned within the new early years framework) and encourages children to play around with the words to make new ones, so good for pre-school children who may have only just started to be interested in letters.
The only reason it has lost a star is because for me it could reinforce the letter sounds a bit more though I guess that's me being a picky teacher! Definitely a toy that you will enjoy helping your child to use - particularly if you have no idea how to help to introduce your child to words and letters. It doesn't have to be on the fridge - works just as well on the table. As I mentioned definitely one of the best phonic/word games for 3+yr olds I have seen and it is a very reasonable price.