This paper discusses the design of a digital Chinese character composition game with the paper-interface named as ARC (Augmented Reality-based Chinese Characters) and its implementation in a Singapore primary school. The ARC game is designed to help beginning Chinese as second language (L2) learners to develop Chinese orthographic knowledge and improve quality of collaboration. Underlying sociocultural perspectives of learning, it seeks to enable learners to complete the game collaboratively in classrooms, and in this process to build a deep understanding of linguistic knowledge in solving in-situ language-related problems that emerge in language use. The results of a quasi-experiment indicate that ARC is an effective system for improving Chinese character learning performance and collaborative learning quality. It suggests that the augmented paper, enabling natural interactions, allow more and potentially young students to engage with educational content and collaboration. The problematizing scaffold should be embedded in the game design to elicit more opportunities for collaborative dialogue.