It’s the Thoughts that Count Team 8 Strategic Management of New Technology
Company Background Q1 : PC vs Console ? Q2 : Marketing Strategy Q3 : Demand for Each Scenarios Q4 : Guitar Hero Analogy ? Q5 : Alternative Application for EmotiveQ6 : Tan Le & Nam Do’s Vision
Founded in Sydney in December 2003. President & co-founder : Tan Le CEO & co-founder : Nam Do Emotiv hired PhD engineers and undergraduate students to cut cost.
EEG (electroencephalography) is used as the basic theory for Emotiv’s technology. “Brain Wave Detector” Emotiv spent 25000 hours for the 1st working prototype Emotive took 4 years to complete EPOC headset
Why Console? Money Money Money Far bigger market size with consoles The Console-enabled market has high demand for accessories-related innovation Co-branding with console can create big demand Lack of blockbuster game in PC segment. Unclear demand for EPOC for PC hard-core gamers
Why PC? Higher margin in PC games PC-Gaming segment is much less concentrated Platform of choice for very hard-core gamers High willingness-to-spend of this hard-core gamers Speed to launch the product
Product- ready for commercial launch Co-develop the platform with a strategic partner- our choice SONY PSP3Note- SONY is not doing well and would be most open to accepting cutting edge path breaking technology to regain domination in this space, and generate superior revenues. Price- penetration pricing Offer a sweet deal to SONY as a partner with very competitive penetration pricing- emotiv needs traction and acceptance with both its partner , SONY and the consumer and this strategy, by offering a “BUNDLE” with PSP3 and emotiv EPOC headset could be a win- win for both partners Place- through strategic partnership with one of the leading game console providers Emotiv would gain global traction through SONY retail channels with this strategic partnership at the cost of minimum margin (penetration pricing) Promotion- strategic partnership will enable emotiv to considerably reduce promotion costs through cross subsidy Emotiv would gain through this cross selling platform when the BUNDLE PSP3 is offered to the gaming community. If it goes it alone the costs of promoting its application would be considerable and a drag on its break even.
Scenario 1: Scenario 2: emotiv manufactures more than emotiv manufactures less than 1 1 million units. Cost of million units. Cost of production= production= 60$, add 50$ for 110$, add 50$ for fixed costs fixed costs (salary and rent), no (salary and rent), no cost for cost for advertising and advertising and distribution distribution (because of (because of strategic partnership strategic partnership with with SONY) SONY) It launches with only 1,000,000 It launches with only 250,000 PS3 PS3 Bundle offers (1% of the Bundle offers (0.25% of the PS3 PS3 market share) market share) Generates revenues of $110 Generates revenues of $ 40 million millionEntry level pricing for emotiv would have long term Premium could be charged by emotiv for exclusivemarketing benefits of inducing user trials, generating long term strategic agreement with SONY and theproof concept and gaining traction in other verticals margins could be improved at the time of negotiations. Note- SONY sold approximately 100 million PSP consoles in 2011.
Scenario 1: Scenario 2: emotiv manufactures less than 1 emotiv manufactures more than 1 million units. Cost of production= million units. Cost of production= 110$, add 100$ for fixed costs (salary 60$, add 100$ for fixed costs (salary +rent+ advertising and distribution ) +rent + advertising and distribution ) Add retail margin of 80$= consumer Add retail margin of 80$= consumer price will be 290$ price will be 240$ It is able to sell 250,000 EPOC It is able to sell 1,000,000 EPOC through retail outlets, globally through retail outlets, globally Generates revenues of $ 240 million Generates revenues of $ 72.5 million Note- the user will have to download the Note- the user will have to download the SDK in order to use EPOC SDK in order to use EPOC Emotiv has to factor in higher distribution and Penetration pricing could again be deployed to gain advertising cost to go global and capture this initial traction in the retail side of the business, but estimated market initially, which may skew the price that will hurt margins and delay break even and upwards. profits.Note- in 2011 the PC game market was worth $ 18 billion, of which 30% was from China,worth an estimated $ 6 billion. Total PC gamers population is estimated to be 54 million.
SIMILARITIES : Guitar Hero changed the game playing experience, developed by Harmonix Emotiv is also trying to change the game experience. Accessories-related game. Emotiv is also an accessory related game. Guitar Hero is compatible in multiple console (Xbox, PS3 & Wii) Emotiv should aim for the same compatibility in the future.
Can be used for all games RPG Action Sport Tactical Casual MusicUI UI / UX Only 1 Genre of Game Music
Medical• Self healthcare- thought controlled self help healthcare management for paraplegics• Mental heath management.Military• Thought-controlled and operated weapon systems.• Communication channelMarketing• Accurate and real time information from customers.• Detection of emotional engagementLifestyle• Thought controlled home entertainment systems.• Thought controlled home appliances.
Zynga announces its initiative to launch a full fledged gamers social platform. United States DOD and their contractors like Northrop Grumman, Lockheed Martin, Boeing, General Dynamics working on military applications of thought controlled weapon systems. Mind controlled toys- hobby aircraft and drones
The Vision:“A World where we all have headsets on all the time, doors open when we approach them because our brain generates a signal that is received by the sensor on the door; entertainment medium modifies or proposes appropriate content; ads are served that best fit the type of products you are thinking about. Ultimate way to interface with the digital world.” The vision is similar to what we have about the future. The world where digital technology create digital life that replace manual process. However, we don’t want to use headset all the time.