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Entry in the East Coast Venture Challenge 2009 business plan competitoin
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Touché
A gathering place for family and friends
The OPPORTUNITY
Video games have displaced board games
The video screen is a “glass wall” that isolates players
Side-by-side, or over the web, the social engagement is lost
Gamers are increasingly engaged, but increasingly isolated
Insights
Wii, Guitar Hero are breakthrough video games Social interaction that spans generations, but still “eyes
front”
Board Games are more conducive to social engagement
Kids want to play video games with parents and grandparents / Seniors want to play board games with grandchildren
Touch-screen user interface is current and intuitive (e.g. iPhone)
There is latent demand for an unintimidating interface to the internet – Significant opportunity for sales to the “tech-excluded”
Touché – The SOLUTION
Provide all the fun and entertainment that today’s gamers demand
Move the video screen out of the way Learn from and build on iPhone
interface – good for gamers and web-excluded users
The Best of All Worlds SOCIAL INTERACTIVE …and mostly, FUN!
Touché - Product and Features
HOME Version: $2,000 Price Point 22” Widescreen w/ Touch Web-capable w/ browser 10 Software Titles Included:
• Bejeweled• Go• I-Spy• Solitaire
• Net Nanny
• Scrabble• Texas Hold-Em• Finger paint• Backgammon• Insane AquariumThe best gaming, and the best casual PC user system EVER!
How Will We Do This?
GEN 1 Off-the-shelf
PC Platform Selected off-
the-shelf titles Light porting
of a few key titles
KILLER industrial design
Showcase at key restaurants and retailers
GEN 2 Build on Gen
1 exposure Incorporate
Gen 1 lessons Cost
reduction / feature add
Roll out new titles and developer toolkit
GEN 3 Incorporate
Gen 2 lessons
Product Line Expansion Up and Down
Significant new titles, including 3rd party content
The Customers
Commercial – appeals to gamers and surfers Arcades – A compelling, “sticky” experience Restaurants – Order entry, entertainment
while waiting, customer premium contests Coffee shops, hotels, waiting rooms…
Home – Appeals to gamers, and tech-adverse “A gathering place for families”
The Competition
Surface Tension Arcade Coffee Table (UK)
£3,000 - £3,500 19” LCD Flat
Screen Retro games, no
touch, no internet
Chicago Gaming Arcade Legends Console
$2,500 - $3,700 25” TV tube Retro games, no
touch, no internet
Microsoft Surface $12,500 30” projection
display Multitouch Not a home
product
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
Touché Product Line Directions
Smaller, portable $1,000 Retail 17” Touch Screen
Bigger, premium
$3,500 retail 40” Touch Screen
Addressable Market (US only)
Arcades @ 1 each ~10,000 Amusement
Arcades ~7,000 Bowling Centers
Restaurants @ 2 each ~13,000 McDonald’s ~10,000 Starbucks
Households @ 5% penetration 30.2 Million w/ income $75K
TOTAL:
Units 17K
46K
1,510K
______1,573K
Dollars $51M
$138M
$2,416M
________ $2,605M*
*Does not include sales of software, accessories, or services
Strategy for Reaching End Users
Commercial Market Arcades – work with distributors to
sample machines in high-traffic venues Restaurant – Direct contact with major
chains. High-value chains demand and deserve custom solutions
GOAL: Cumulative sales to 25% ofaddressable market in 4 years
Strategy for Reaching End Users
Home Market Initial distribution through Costco or Best Buy Costco is surprisingly high-end in
customer demographics and turnover of major electronics
Best Buy has an assisted sales floor and the Geek Squad for support
GOAL: Cumulative sales to 4% of addressable market in 4 years
Projected Sales (Home & Commercial)
Year 1 Year 2 Year 3 Year 4
Fixed Costs ($K)
$1,253
$5,416
$11,133
$18,027
Var. Cost (H/C)
$625 -
$2,629
$7,362
$6,810 $2,723
$21,915
$9,043
Units Sold (H/C) 781 - 3,755 4,090 11,350 7,484 36,525 5,652
Sales $1,328 -
$5,782
$12,270
$14,660
$22,452
$43,830
$16,259
Net $(550)
$2,646
$ 6,445
$11,104 Cumulative Sales (Units): Home: 52,411 /
Commercial: 17,226NOTE: Only 4% and 25%, respectively, of addressable market
Income and Expense Assumptions The greater of $600K/yr or 10% of Sales
will be spent on Advertising and Promotion
Gross margins on hardware ~50% 10% Returns Allowance 20% retail margin for home version 30% distribution margin for commercial
version
Touché – Cash Flow Summary
-5000
0
5000
10000
15000
20000
Net Cash
Income
Expense
Breakeven @ 19 mo. – $1.8M Peak Debt – 200% ROI in 3 Years
Additional Revenue
Leasing (for commercial applications)
Onscreen Promotion and premium play for restaurants
Software (Download or hard copy sales)
Accessories (Keyboard, wireless printer)
Repairs / Upgrades
International Markets
Barriers and Strategies
No fundamental IP protection on the platform
No significant technology barrier to implementation
“First Mover Advantage” may be a disadvantage•Leveraged Supply Chain – technology and financial
•Placement with best retailers and restaurant outlets
•Content licensing – with a skilled Advisory Board
•Iconic and Functional Product Design
Exit – Acquisition
Potential Purchasers of Touché: Traditional Game Company: e.g. Hasbro,
Mattel
Arcade company, e.g. Chicago Gaming Company, Williams Gaming, etc.
Purchase by Tech company – HP, Philips, Microsoft
Business Partners
SECURED: SMART Technologies – mass produces various
touch-screen related productsPOTENTIAL / STRATEGIC: Game publisher – Content and Production SocioFun Furniture – HK/China furniture mfg. Costco/Best Buy – Retail Distribution McDonald’s / Starbucks – Restaurant
Showcase BMI Gaming / thePinballStoreOnline.com –
Arcade Distribution
Founders
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.
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.
Advisors
In addition to the above, the following have graciously agred to as advisors and Subject Matter Experts to Touché:
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.
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.
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.
Advisors
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.
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.
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.
QUESTIONS?