Phonemic awareness is a critical component of reading. It is the ability to hear and manipulate the spoken parts of words. (It falls under the umbrella of phonological awareness).
Phonological and phonemic awareness activities change the reading brain and can bridge the gap between phonics and decoding.
The game in this book uses phonemic awareness skills to build skilled readers. Segmenting and blending sounds can be very tricky for young children. Try to have a shorter wait time between sounds when you are practicing this skill if a child is having trouble hearing the word.