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“Every guitar hero started at Guitar Zero”

“Every guitar hero started at Guitar Zero”. What is Guitar Zero?. Mission Statement : To spread the life-long enjoyment of playing guitar in a technique that is fun, effective, and constantly progressing. Our ultimate goal is to move you from the system to the stage.

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“Every guitar hero started at Guitar Zero”

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  1. “Every guitar hero started at Guitar Zero”

  2. What is Guitar Zero? Mission Statement: To spread the life-long enjoyment of playing guitar in a technique that is fun, effective, and constantly progressing. Our ultimate goal is to move you from the system to the stage. • Guitar Zero is basically the same Guitar Hero format, except you are using a real guitar. • Has introductory tutorials for even complete beginners • Start off with basic and end up playing most respectable guitar riffs

  3. Foot pedal… • Connect real guitar to game system via foot pedal • Pedal acts as ‘controller’: allows toggling between options and selecting them • Pedal is also interactive during game play

  4. Is this Possible? • Musical notes are air vibrations at a specific frequency (how tuners work) • While original game reads ‘green, red, green’ inputs from the controller… • Our game reads ’20.6 Hz, 30.87Hz, 20.6Hz’ (ex. notes E, B, E) • Hit the right note when it crosses the line

  5. Example I X---------------------------------------------------------------- X---------------------------------------------------------------- X---------------------------------------------------------------- X----------------0--1-2-----------------------0--1-2--------- X---------0--3-------------------0-0-0-0-3------------------ X-3b5--------------------3b5---------------------------3b5- Led Zeppelin's “Heartbreaker” • Each line represents a guitar string (top line is thinnest/highest) • Picture numbers moving left • As the number crosses the X, press that # fret on the corresponding string

  6. Example II X---------------------------3p0---------------------------------------- X-----------------------------------3p0-------------------------------- X-----------7--------------------------------2b------------------------ X--2-------7------7---------------------------------------------------- X--2-------5------7---------------------------------------------------- X--0---------------5---------------------------------------------------- ACDC “Back in Black” • Stacked numbers represent a chord (play all at once)

  7. Other Features • Note-by-note mode: allows beginners to take their time and learn by each note • Open Mic: allows you to play and practice on your own; basically turns the TV into an amp • Guitar Zero Live: new songs available for download each month via internet

  8. Customer Benefit Package Facilitating Goods and Services:

  9. Potential Market Opportunities Environmental Scanning shows: • 41.1% of households own gaming systems • Previous 5 years show 10%/yr increase in guitar starter packs • Over 100% increase in digital downloads for Guitar Hero Our Product is:A video game that teaches guitar with current downloadable songs. By following Guitar Hero’s lead in game design, we will be able to benefit from the same strong demand

  10. Customer and Market Requirements • Desire to learn to play the guitar • Access to Guitar and Gaming System • Interest in expanding playlist for anybody

  11. Market Competition • Guitar Instructors • Guitar Hero • DVD Tutorials • Esteban • Rock Band Ways to Overcome: • Much more affordable than lessons • Mixes video gaming fun with real results • Ability to learn what you want and constantly progress • Learn at your own pace Esteban

  12. Corporate Strategy Business of the Company: • Video Game Industry • Guitar Instruction Who are our Customers? • Aspiring guitarists • Current guitarists looking to learn more songs • Guitar Hero players open to learning real guitar

  13. Competitive Priorities: Innovation Quality Core Competencies: R&D team / programmers The majority of our assets is made of our team Our game is only as good as the people behind it Variety of songs to please anyone Management who stand behind delivering a game that will exceed expectations and fulfill promise Flaws in game programming or experience will result in certain failure Business & Corporate Strategy

  14. Dissatisfiers, Satisfiers and Exciters • Dissatisfiers (what customers expect): -Instruction Manual • Satisfiers (what customers look for): - Introductory tutorial - Interactive website • Exciters/Delighters (unexpected bonus): - “Open Mic” feature - Array of new downloadable songs - Website with user profile and sharing ability

  15. How the idea came about… = =

  16. Preliminary Design and Testing • Some of our team had little/no guitar experience • Using them as guinea pigs, we tested our game’s validity in the beginning • October 2006 – Jan. 2007: developed 5-song demo game using professional testers • March 2007 – July 2007: Demo game appeared in 15 largest Guitar Centers throughout the country • All participants filled out the following survey after playing demo…

  17. Demo Survey 1. My guitar skill level is…(circle one) Beginner Advanced Expert 2. I was able to play Guitar Zero… Easily With some difficulty With much difficulty 3. I rate Guitar Zero’s overall gaming experience… Exceptional Good Average Poor 4. I would be willing to purchase a full version of the game… Yes No 5. The most I would spend on Guitar Zero is… $75 $100 $125

  18. Final Design & Resources • Programmers complete final copy of game • Artists complete instruction manual and cover design • 10 employees using disc copier and printer make 1,000 discs/manuals a day • Discs, pedal, manual and cover design are bundled using plastic injection machine • Final product is boxed, labeled and shipped to various outlets

  19. Fixed and Variable Costs Variable Costs (per unit): - Foot Pedal = $15 - Packaging = $5 - CDs = $1 - Shipping = $3 - Cord= $10 - 3 Free Song Downloads= $3 - Labor= $1 TOTAL VARIABLE COSTS = $38/unit Fixed Costs (per year): - Programmers Salary = $750,000 - Designers Salary = $500,000 - Building Rent = $75,000 - Computers = $400,000 - Customer Service = $200,000 - Market Research = $15,000 - Demo/Advertising = $425,000 - Disc Copier(5) = $500,000 - Plastic Molding Machine(5) = $125,000 - Song Rights = $2,000,000 TOTAL FIXED COSTS/YR = $5,095,000

  20. Break- Even Analysis • Fixed Costs= $5,095,000 • Variable Costs= $38/Unit • Sale Price= $90 $5,095,9000 = 97,980 Units/ $8,818,200 Sales $90-$38 Our product will break even before the middle of the first year. Year 1 forecast = $35,705,000

  21. Activision Sales and Forecast (in thousands)

  22. Our Forecasts (in thousands) Based on 10% of Activision’s sales

  23. Demo Survey 1. My guitar skill level is…(circle one) Beginner Advanced Expert 2. I was able to play Guitar Zero… Easily With some difficulty With much difficulty 3. I rate Guitar Zero’s overall gaming experience… Exceptional Good Average Poor 4. I would be willing to purchase a full version of the game… Yes No 5. The most I would spend on Guitar Zero is… $75 $100 $125

  24. Tracking Signal & MAD (x1000) We do not expect any seasonality for our product

  25. Production Capacity • Plant will run at 50-60% capacity for first 1-5 years (50-60% = 1,000 units a day or 100 units an hour.) • Nintendo Wii example • Not meeting demand= LOSS • As our product continues to grow, we expect to be at 70-80% capacity around year 5. • Room to grow in assembly space as well as office areas.

  26. ROCK ON!!!

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