Ecvc Competition Touche Presentation 1 May 09 Rev 7


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Entry in the East Coast Venture Challenge 2009 business plan competitoin

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Ecvc Competition Touche Presentation 1 May 09 Rev 7

  1. 1. Touché A gathering place for family and friends
  2. 2. The OPPORTUNITY <ul><li>Video games have displaced board games </li></ul><ul><li>The video screen is a “glass wall” that isolates players </li></ul><ul><li>Side-by-side, or over the web, the social engagement is lost </li></ul>Gamers are increasingly engaged, but increasingly isolated
  3. 3. Insights <ul><li>Wii, Guitar Hero are breakthrough video games </li></ul><ul><ul><li>Social interaction that spans generations, but still “eyes front” </li></ul></ul><ul><li>Board Games are more conducive to social engagement </li></ul><ul><li>Kids want to play video games with parents and grandparents / Seniors want to play board games with grandchildren </li></ul><ul><li>Touch-screen user interface is current and intuitive ( e.g. iPhone) </li></ul><ul><li>There is latent demand for an unintimidating interface to the internet – Significant opportunity for sales to the “tech-excluded” </li></ul>
  4. 4. Touché – The SOLUTION <ul><li>Provide all the fun and entertainment that today’s gamers demand </li></ul><ul><li>Move the video screen out of the way </li></ul><ul><li>Learn from and build on iPhone interface – good for gamers and web-excluded users </li></ul><ul><li>The Best of All Worlds </li></ul><ul><ul><li>SOCIAL </li></ul></ul><ul><ul><li>INTERACTIVE </li></ul></ul><ul><ul><li>… and mostly, FUN! </li></ul></ul>
  5. 5. Touché - Product and Features <ul><li>HOME Version: </li></ul><ul><li>$2,000 Price Point </li></ul><ul><li>22” Widescreen w/ Touch </li></ul><ul><li>Web-capable w/ browser </li></ul><ul><li>10 Software Titles Included: </li></ul><ul><li>Bejeweled </li></ul><ul><li>Go </li></ul><ul><li>I-Spy </li></ul><ul><li>Solitaire </li></ul><ul><li>Net Nanny </li></ul><ul><li>Scrabble </li></ul><ul><li>Texas Hold-Em </li></ul><ul><li>Finger paint </li></ul><ul><li>Backgammon </li></ul><ul><li>Insane Aquarium </li></ul>The best gaming, and the best casual PC user system EVER!
  6. 6. How Will We Do This? <ul><li>GEN 1 </li></ul><ul><li>Off-the-shelf PC Platform </li></ul><ul><li>Selected off-the-shelf titles </li></ul><ul><li>Light porting of a few key titles </li></ul><ul><li>KILLER industrial design </li></ul><ul><li>Showcase at key restaurants and retailers </li></ul><ul><li>GEN 2 </li></ul><ul><li>Build on Gen 1 exposure </li></ul><ul><li>Incorporate Gen 1 lessons </li></ul><ul><li>Cost reduction / feature add </li></ul><ul><li>Roll out new titles and developer toolkit </li></ul><ul><li>GEN 3 </li></ul><ul><li>Incorporate Gen 2 lessons </li></ul><ul><li>Product Line Expansion Up and Down </li></ul><ul><li>Significant new titles, including 3 rd party content </li></ul>
  7. 7. The Customers <ul><li>Commercial – appeals to gamers and surfers </li></ul><ul><ul><li>Arcades – A compelling, “sticky” experience </li></ul></ul><ul><ul><li>Restaurants – Order entry, entertainment while waiting, customer premium contests </li></ul></ul><ul><ul><li>Coffee shops, hotels, waiting rooms… </li></ul></ul><ul><li>Home – Appeals to gamers, and tech-adverse </li></ul><ul><ul><li>“ A gathering place for families” </li></ul></ul>
  8. 8. The Competition <ul><li>Surface Tension Arcade Coffee Table (UK) </li></ul><ul><li>£3,000 - £3,500 </li></ul><ul><li>19” LCD Flat Screen </li></ul><ul><li>Retro games, no touch, no internet </li></ul><ul><li>Chicago Gaming Arcade Legends Console </li></ul><ul><li>$2,500 - $3,700 </li></ul><ul><li>25” TV tube </li></ul><ul><li>Retro games, no touch, no internet </li></ul><ul><li>Microsoft Surface </li></ul><ul><li>$1 2,500 </li></ul><ul><li>30” projection display </li></ul><ul><li>Multitouch </li></ul><ul><li>Not a home product </li></ul>
  9. 9. Touché Product Line Development Premium Exclusive Home Gen 1 Affordable Gen 2 Mass Home Gen 3 Commercial Starbucks Commercial Educational Commercial Waiting Area (Airport, Office) Mass Portable Mass Featured Commercial McDonald’s Gen 2 ?? Bowling Pin Model Commercial Arcade Gen 1
  10. 10. Touché Product Line Directions <ul><li>Smaller, portable </li></ul><ul><li>$1,000 Retail </li></ul><ul><li>17” Touch Screen </li></ul><ul><li>Bigger, premium </li></ul><ul><li>$3,500 retail </li></ul><ul><li>40” Touch Screen </li></ul>
  11. 11. Addressable Market (US only) <ul><li>Arcades @ 1 each </li></ul><ul><ul><li>~10,000 Amusement Arcades </li></ul></ul><ul><ul><li>~7,000 Bowling Centers </li></ul></ul><ul><li>Restaurants @ 2 each </li></ul><ul><ul><li>~13,000 McDonald’s </li></ul></ul><ul><ul><li>~10,000 Starbucks </li></ul></ul><ul><li>Households @ 5% penetration </li></ul><ul><ul><li>30.2 Million w/ income $75K </li></ul></ul><ul><ul><li>TOTAL: </li></ul></ul><ul><li>Units </li></ul><ul><li>17K </li></ul><ul><li>46K </li></ul><ul><li>1,510K </li></ul><ul><li>______ </li></ul><ul><li>1,573K </li></ul><ul><li>Dollars </li></ul><ul><li>$51M </li></ul><ul><li>$138M </li></ul><ul><li>$2,416M </li></ul><ul><li>________ </li></ul><ul><li>$2,605M * </li></ul>*Does not include sales of software, accessories, or services
  12. 12. Strategy for Reaching End Users <ul><li>Commercial Market </li></ul><ul><ul><li>Arcades – work with distributors to sample machines in high-traffic venues </li></ul></ul><ul><ul><li>Restaurant – Direct contact with major chains. High-value chains demand and deserve custom solutions </li></ul></ul>GOAL: Cumulative sales to 25% of addressable market in 4 years
  13. 13. Strategy for Reaching End Users <ul><li>Home Market Initial distribution through Costco or Best Buy </li></ul><ul><ul><li>Costco is surprisingly high-end in customer demographics and turnover of major electronics </li></ul></ul><ul><ul><li>Best Buy has an assisted sales floor and the Geek Squad for support </li></ul></ul><ul><ul><li>GOAL: Cumulative sales to 4% of </li></ul></ul><ul><ul><li>addressable market in 4 years </li></ul></ul>
  14. 14. Projected Sales (Home & Commercial) Cumulative Sales (Units): Home: 52,411 / Commercial: 17,226 <ul><ul><li>NOTE: Only 4% and 25%, respectively, of addressable market </li></ul></ul>  $11,104   $ 6,445   $2,646   $(550) Net $16,259 $43,830 $22,452 $14,660 $12,270 $5,782 - $1,328 Sales 5,652 36,525 7,484 11,350 4,090 3,755 - 781 Units Sold (H/C) $9,043 $21,915 $2,723 $6,810 $7,362 $2,629 - $625 Var. Cost (H/C)   $18,027   $11,133   $5,416   $1,253 Fixed Costs ($K) Year 4 Year 3 Year 2 Year 1  
  15. 15. Income and Expense Assumptions <ul><li>The greater of $600K/yr or 10% of Sales will be spent on Advertising and Promotion </li></ul><ul><li>Gross margins on hardware ~50% </li></ul><ul><li>10% Returns Allowance </li></ul><ul><li>20% retail margin for home version </li></ul><ul><li>30% distribution margin for commercial version </li></ul>
  16. 16. Touché – Cash Flow Summary Breakeven @ 19 mo. – $1.8M Peak Debt – 200% ROI in 3 Years
  17. 17. Additional Revenue <ul><li>Leasing (for commercial applications) </li></ul><ul><li>Onscreen Promotion and premium play for restaurants </li></ul><ul><li>Software (Download or hard copy sales) </li></ul><ul><li>Accessories (Keyboard, wireless printer) </li></ul><ul><li>Repairs / Upgrades </li></ul><ul><li>International Markets </li></ul>
  18. 18. Barriers and Strategies <ul><li>No fundamental IP protection on the platform </li></ul><ul><li>No significant technology barrier to implementation </li></ul><ul><li>“First Mover Advantage” may be a disadvantage </li></ul><ul><li>Leveraged Supply Chain – technology and financial </li></ul><ul><li>Placement with best retailers and restaurant outlets </li></ul><ul><li>Content licensing – with a skilled Advisory Board </li></ul><ul><li>Iconic and Functional Product Design </li></ul>
  19. 19. Exit – Acquisition <ul><li>Potential Purchasers of Touché: </li></ul><ul><li>Traditional Game Company: e.g. Hasbro, Mattel </li></ul><ul><li>Arcade company, e.g. Chicago Gaming Company, Williams Gaming, etc. </li></ul><ul><li>Purchase by Tech company – HP, Philips, Microsoft </li></ul>
  20. 20. Business Partners <ul><li>SECURED: </li></ul><ul><li>SMART Technologies – mass produces various touch-screen related products </li></ul><ul><li>POTENTIAL / STRATEGIC: </li></ul><ul><li>Game publisher – Content and Production </li></ul><ul><li>SocioFun Furniture – HK/China furniture mfg. </li></ul><ul><li>Costco/Best Buy – Retail Distribution </li></ul><ul><li>McDonald’s / Starbucks – Restaurant Showcase </li></ul><ul><li>BMI Gaming / – Arcade Distribution </li></ul>
  21. 21. Founders <ul><li>Eric C. Peterson – PhD student at Rensselaer Polytechnic Institute, with 25 years of experience, including 10 years at GE and 9 years at Hasbro. Mr. Peterson will handle technical, sourcing, and executive matters. </li></ul><ul><li>Lauren Sacks – Majors in Electronic Arts and Management (co-terminal degrees) at Rensselaer Polytechnic Institute, with experiences at leading schools, such as RISD and the Art Institute of San Francisco. Ms. Sacks will handle content, creative, and design matters. </li></ul>
  22. 22. Advisors <ul><li>In addition to the above, the following have graciously agred to as advisors and Subject Matter Experts to Touché: </li></ul><ul><li>Dale Siswick – Former GM of Hasbro Games and Puzzles, with 35+ years of experience in the toy and game industry. Mr. Siswick has held senior management positions in Sales, Marketing, and R&D at Hasbro, and is extremely skilled in establishing and negotiating open innovation technology and IP agreements. </li></ul><ul><li>Thomas Dusenberry – Currently head of Dusenberry Entertainment, Tom was the founding visionary and CEO of Hasbro Interactive. Mr. Dusenberry is well-known in the electronic entertainment and gaming industries, and has been a keynote speaker at COMDEX, Game Developer Conference, and the American International Toy Fair. </li></ul><ul><li>Susan W. Sanderson, Ph.D. – Dr. Sanderson’s teaching areas include marketing, entrepreneurship, innovation and product development. Her current research focuses on winning with “beacon products” and how outstanding product innovations can trigger market takeoff and effectively bridge the gap between early adopters and the mass market. </li></ul>
  23. 23. Advisors <ul><li>Mark F. Radcliffe – Distinguished alumnus of Harvard Law School, prominent IP attorney and a partner at DLA Piper in the heart of Silicon Valley. He concentrates in strategic intellectual property advice, private financing, corporate partnering, software licensing, Internet licensing and copyright and trademark. </li></ul><ul><li>Benjamin Lee – President of 2n Productions, an independent game studio in San Francisco. Mr. Lee has over 15 years of game industry experience, designing and building games for a wide range of platforms and major software publishers. He graduated from Cornell University with a BS and MEng in Electrical Engineering. </li></ul><ul><li>Smart Modular Technologies, Inc. – Smart is a ~$1B Silicon Valley company with extensive experience in embedded PC platforms, touch-panels, and kiosk systems for public and harsh environmental conditions. Their Applications Engineering department is a valuable resource for both current product and future trends of relevant technologies. </li></ul>
  24. 24. QUESTIONS?