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Google Cardboard

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These slides use concepts from my (Jeff Funk) course on Business Models at National University of Singapore to analyze the business model for Google Cardboard. Google Cardboard provides users with a virtual reality experience for a much lower price than that from Occulus Rift. It combines a fold-out cardboard mount with an Android smart phone to enable users to feel as though they are part of a video or game. It is light, does not require wires, and content will be available from YouTube and Google Play. Young males are expected to be the largest users of Google Cardboard. Google expects to make money from sales of content through Google Play. The slides describe the value proposition, method of value capture, customers, scope of activities, and method of strategic control for Google Cardboard.

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Google Cardboard

  1. 1. Foo Lin Xuan Ho Jun Loong Daryl Li Shi Nicholas Wong Guo Fan Ning Jin TeamMembers
  2. 2. Agenda 1. Introduction 2. Product Description 3. Current Ecosystem 4. Market Outlook 5. Value Proposition 6. Customer Selection 7. Value Capture 8. Strategic Control 9. Future Possibilities 10.Conclusion
  3. 3. 1. Introduction Virtual Reality (VR)  Technology to create the illusion of presence in a simulated environment  Artificially creates sensory experiences through interacting with the artificial world
  4. 4. 2. Product Description Google Cardboard  VR platform developed by Google  Fold-out cardboard mount for smartphone (Screens up to 6 inches)  Paired with app to create “3D” Vision
  5. 5. 3. Current ecosystem
  6. 6. 4. Market Outlook  Apple App Store  Amazon App Store  Facebook  Dailymotion  Youku  Tudou Competitors Sony Project Morpheus End-users Content Oculus Rift Oculus Rift Sony Project Morpheus
  7. 7. 5. Value Proposition End Users Content Creators
  8. 8. 5. Value Proposition “A more immersive video and gaming experience”  Head tracking allows users to feel as though they are part of the video / game Example • Mythbusters: Sharks Everywhere End Users
  9. 9. 5. Value Proposition “A more immersive video and gaming experience”  Head tracking allows users to feel as though they are part of the video / game Example • Mythbusters: Sharks Everywhere End Users
  10. 10. Affordable VR  Can be made using homemade materials  Relatively cheap price of ~40 SGD Accessible to anyone with a smartphone  Android  iPhone 5. Value Proposition End Users
  11. 11. Light  Allows users to watch videos for extended periods of time without feeling strain on their neck Wireless  Users can use it everywhere in the house  Not restricted to being near a console or a computer Lots of content available for Google Cardboard  Many YouTubers and music companies are experimenting with virtual reality videos 5. Value Proposition End Users
  12. 12. GC versus competitors Google Cardboard ($40) Oculus Rift ($488) Project Morpheus (unannounced) End Users
  13. 13. Smartphone Gaming PC PlayStation 4 Google Cardboard Oculus Rift Project Morpheus Accessibility Magnetic Button Keyboard and Mouse PlayStation controller Control Scheme
  14. 14. Eve: Valkyrie (Project Morpheus / Oculus Rift) Rollercoaster (Google Cardboard) Graphics Google Cardboard Oculus Rift Project Morpheus
  15. 15. Strategy Canvas 0 1 2 3 4 5 6 7 8 9 10 Cost Weight Content Accessibility Control Scheme Graphics GC Oculus Morpheus End Users
  16. 16. End UsersCustomer Selection Google Cardboard Oculus Rift Project Morpheus Casual gamers Hardcore gamers
  17. 17. Customer Selection :Based on usage  Smart phone users  People who play casual games  YouTube viewers  Early adopters who want to experience VR while waiting for public release of Oculus Rift/other VR viewers End Users
  18. 18.  Young adults that are interested in new technologies  Usually male  19 – 45  Low income  Students Customer Selection : DemographicEnd Users
  19. 19.  Why only males?  VR does not add as much value for YouTube content targeted at females  Make-up tutorials  Dramas  Why not hard-core gaming audiences?  Cannot compete with Oculus Rift and Project Morpheus Customer Selection : DemographicEnd Users
  20. 20. Video Creators  Attracts audiences due to a revolutionary way to experience content  360 degree videos have attracted over a million viewers on YouTube  Video making equipment easily accessible to big YouTubers  Free Jump camera rigs in every YouTube Space  Saves time and money for YouTube video creators 5. Value Proposition Content Creators
  21. 21. App Developers  Can attract more gamers due to the more immersive gaming experience  New genre of games – first mover advantage Both  Large hype and demand for VR content  1 million Google Cardboard units shipped out as of May 2015 5. Value Proposition Content Creators
  22. 22. GC versus competitors : Game DevelopersContent Creators Google Cardboard Oculus Rift Project Morpheus  Casual gamers  Usually spends less on games  Larger pool of audience  Everyone has a smartphone  Hardcore gamers  Willing to spend more  Smaller pool of audience  Requires gaming PC or console  Established consumer base  PC - Steam  PlayStation 4 Revenue Consumer base
  23. 23.  Low cost of development  Repetitive stages  Simple game mechanics  High cost of development  High expectations from hardcore gamers  Graphics  Game mechanics  Story design  Complexity introduces more bugs Cost GC versus competitors : Game DevelopersContent Creators Google Cardboard Oculus Rift Project Morpheus
  24. 24. Customer Selection : Video Creators YouTubers  Specifically those who wants to attract the targeted end users demographic  Video games (Lets Plays)  Minecraft Lets Players  PewDiePie  Tech reviews  YouTubers that want to provide a different form of entertainment for their viewers  Video blogs Content Creators
  25. 25. Customer Selection : : App Developers Mobile game developers  Experienced in developing casual games that suit the VR format – RPGs and Action Games  Mojang, King (Activison Blizzard)  Games that require more types of input can also be made possible through the use of Bluetooth controllers Content Creators
  26. 26. content creators $(Product) $(Advertisement) $(Commission)$(Revenue) $(Revenue) 7.Method of Value Capture Google Play YouTube SDK game players users
  27. 27. 1) End users of YouTube • 360 degree videos--only available on YouTube. • Emphasize existing customer users Google and content creators SDK game players $(Product) $(Advertisement & subscription)$(Commission) $(Revenue) $(Revenue) $(Product) 7.Method of Value Capture
  28. 28. 2) Games on Google Play • No licensing fee • Google Cardboard takes a cut of 30% from Google Play users Google and content creators SDK game players $(Product) $(Advertisement & subscription)$(Commission) $(Revenue) $(Revenue) $(Product) 7.Method of Value Capture
  29. 29. Google Cardboard Oculus Rift Price $40 $350 (around 9 times) Advantage of price Extremely affordable for general public Great marginal revenue generated for every piece sold Comparative advantage in manufacturing No Yes Major methods of value capture Indirectly from YouTube and Google Play Sales of physical units Google’s unique way of value capture
  30. 30. . • YouTube Content Creators • App developers • GoPro • Advertisers Key Partners More realistic gaming and video watching experience Value proposition • Develop SDK & video creating resource • YouTube maintenance Customer Relationships • Development of Google Cardboard SDK • Upgrade Google Cardboard Key Activities • Cardboard SDK (intellectual) • Android Platform Key Resources • Online DIY resources • 3rd Party Manufacturer • Advertisement Distribution Channel • End Users • Content Creators Customer Segments • Development and maintenance of YouTube • Jump rig • Development of Google Cardboard SDK Cost Structure • Shared revenue • Advertisement • Royalty from 3rd party • Sales revenue Revenue Streams GOOGLE CARDNOARD Google Cardboard Business Model Canvas
  31. 31. 8.Strategic control More motivation to create VR contents More users in Google Play store, Youtube More VR apps & More VR Youtube videos Low Pricing Make Google Cardboard available to more customers First mover’s advantage Make VR accessible to more people Before the launch of Oculus Rift Network effect: Promote Google PlayStore, a key complimentary asset. Cardboard SDK & JUMP Make VR accessible to developers
  32. 32. 9.Future possibilities Cardboard Expeditions  Classroom of the future Journalism to the virtual reality realm  Immersive experience  More impressive and effective
  33. 33. 9.Future possibilities VR for MV & Concert  Collaborate with media companies  Breakthrough for MV and concert  Attract female audiences VR for phobia treatment & post-traumatic-stress-disorder
  34. 34. 9.Future possibilities Google’s VR Headset. (focus on interactive experience)  Compatible with controller  Targeting Stronger gamer Compatible with other VR Headset (focus on visual experience)  Accessible to YouTube Videos Oculus Rift Project Morpheus
  35. 35. 9.Future possibilities VR Telecommuting  Gathering  Meeting
  36. 36. 10.Conclusion  Google should foster closer relationships with content creators due to strong network effects  Target customers within a certain demographic before crossing the gap to the mass market
  37. 37. Q & A
  38. 38. References • http://www.businessinsider.sg/stats-on-googles-revenues-from- youtube-and-google-play-2015-7/#.Vi-Q-bcrLIV • https://www.youtube.com/yt/press/statistics.html • http://www.forbes.com/sites/ewanspence/2014/06/25/google-has- 93-of-android-users-on-the-latest-google-play-service-outperforming- apples-ios7-adoption-rate/ • http://www.wareable.com/vr/wareable-why-google-cardboard-not- oculus-rift-will-drive-the-future-of-vr-976

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