By the time your child is ready for kindergarten or school, they should be able to recognize their own name and other simple written words. The sounds of each letter of the alphabet should be familiar to your child, and they should understand the principle of reading from left to right, which way to hold a book, and possibly even be starting to read three and four-letter words.
Ideally, children who have been introduced to reading modeling behavior enter kindergarten and first grade ready and eager to read on their own. For most children, the formal teaching of reading begins in these grades. Most educators, homeschool or otherwise, use a combination of phonics programs, worksheets, and actual books to teach reading. These are all tried and true methods and can result in reading success. A relatively new methodology, syllabics, extends the focus of phonics programs on the sounds associated with the consonant letters to simple rules for correctly using the variable sounds associated with the vowels.
This will include counting to ten, recognizing shapes and colors, being able to hold a pencil or crayon properly, and coloring in without scribbling. Basic math concepts such as recognizing patterns, understanding quantity and some simple addition and subtraction will be useful.
Just because your child will be playing fun online games doesn't mean the same value won't be there. Create a comfortable study zone. Turn off outside distractions such as cell phones, radios or TVs.