Presentation on EMOTIV Technologies EPOC EEG headset suggested strategy for the gaming market

1. It’s the Thoughts that Count
Team 8
Strategic Management of New Technology

2. 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 Do’s Vision

3.  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.

4.  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

5. 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

6. 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

8.  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 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.

9.  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 million
Entry level pricing for emotiv would have long term Premium could be charged by emotiv for exclusive
marketing benefits of inducing user trials, generating long term strategic agreement with SONY and the
proof 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.

10.  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.

11. 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.

12. Can be used for all games
RPG Action Sport Tactical
Casual Music
UI UI / UX
Only 1 Genre of Game Music

13. 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.

14.  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

15. 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.

16. Q&A