This is a fairly familiar game for most Early Years Teachers and one that is very popular with the children. The focus here is to sound out, read, sort in to real and fake words and discuss meaning of words. This is a very useful game in Year One leading up to the Phonics Screening Test and a discrete way of introducing those fake words.
Personally and excellent resource is PhonicsPlay which has a different game for each of the sounds meaning you don't always have to be thinking of words with today's sound. This particular game is free on Phonics Play but subscription is only £12 and I highly recommend. Below is a flash video of the game :) Enjoy!
Alternatively, you can download from Twinkl a custom version of the game that a group of children can work on or be set up as an independent activity.
Or to be even more impressive, get into character, grab a few resources and dress up as a pirate and get the children involved for some role play!