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Emotiv

System

Its the Thoughts that Count

Team 8
Strategic Management of New
Technology

Agenda
Company Background
Q1 : PC vs Console ?
Q2 : Marketing Strategy
Q3 : Demand for Each Scenarios
Q4 : Guitar Hero Analogy ?
Q5 : Alternative Application for Emotive
Q6 : Tan Le & Nam Dos Vision

Emotiv Company
Background
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.

Emotiv Technology
Background
EEG (electroencephalography)
is used as the basic theory for
Emotivs technology.
Brain Wave Detector
Emotiv spent 25000 hours for
the 1st working prototype
Emotive took 4 years to
complete EPOC headset

Q1 : PC vs Consoles ?
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

Q1 : PC vs Consoles ? (cont..)
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

Q1 : PC vs Console ? (cont..)

Q2 : Marketing Strategy
Product- ready for commercial launch

Co-develop the platform with a strategic partner- our choice SONY PSP3
Note- 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 pricingemotiv 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.

Q3 : Demand for console


ONLY
scenario

Scenario 1:

emotiv manufactures less


than 1 million units. Cost of
production= 110$, add 50$
for fixed costs (salary and
rent), no cost for advertising
and distribution (because of
strategic partnership with
SONY)
It launches with only 250,000
PS3 Bundle offers (0.25% of
the PS3 market share)
Generates revenues of $ 40
million

Entry level pricing for emotiv would have long term


marketing benefits of inducing user trials, generating
proof concept and gaining traction in other verticals

Scenario 2:

emotiv manufactures more


than 1 million units. Cost of
production= 60$, add 50$ for
fixed costs (salary and rent),
no cost for advertising and
distribution (because of
strategic partnership with
SONY)
It launches with only 1,000,000
PS3 Bundle offers (1% of the
PS3 market share)
Generates revenues of $110
million

Premium could be charged by emotiv for exclusive


long term strategic agreement with SONY and the
margins could be improved at the time of
negotiations.

Note- SONY sold approximately 100 million PSP

Q3 : Demand for PC ONLY


scenario

Scenario 1:

emotiv manufactures less than 1


million units. Cost of production=
110$, add 100$ for fixed costs
(salary +rent+ advertising and
distribution )
Add retail margin of 80$=
consumer price will be 290$
It is able to sell 250,000 EPOC
through retail outlets, globally
Generates revenues of $ 72.5
million

Note- the user will have to download


the SDK in order to use EPOC

Emotiv has to factor in higher distribution and


advertising cost to go global and capture this
estimated market initially, which may skew the price
upwards.

Scenario 2:

emotiv manufactures more than 1


million units. Cost of production=
60$, add 100$ for fixed costs
(salary +rent + advertising and
distribution )
Add retail margin of 80$=
consumer price will be 240$
It is able to sell 1,000,000 EPOC
through retail outlets, globally
Generates revenues of $ 240
million

Note- the user will have to download


the SDK in order to use EPOC

Penetration pricing could again be deployed to gain


initial traction in the retail side of the business, but
that will hurt margins and delay break even and
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.

Q4 : Guitar Hero Analogy


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.

Q4 : Guitar Hero Analogy


(Cont..)
Can be used for all
games

RP
G

Actio
n
Casu
al

Spor
t
Musi
c

Tactical

UI / UX

UI

Only 1 Genre of Game


Musi
c

Q5 : Alternative Applications
for Emotive
Medical
Self healthcare- thought controlled self help healthcare management for paraplegics
Mental heath management.

Military
Thought-controlled and operated weapon systems.
Communication channel

Marketing
Accurate and real time information from customers.
Detection of emotional engagement

Lifestyle
Thought controlled home entertainment systems.
Thought controlled home appliances.

The Business
opportunities..

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

Q6 : Tan Le & Nam Dos Vision


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 dont want to use headset all the
time.

Q&A