Emotiv Case Analysis
Introduction: Emotiv Systems Inc. has developed a headset called EPOC. This product uses EEG technology transmit brain signals wirelessly to a computer. While the product has several potential applications, the most lucrative market seems to be video games. Emotiv systems management needs to decide whether they wish to market to the PC gamers only or to be integrated on one of the gaming consoles. Further, decisions regarding the marketing mix need to be made.
Segmenting and targeting: The video game market can be segmented as per the chart in Exhibit 1. The PC gamers largely comprise hard core gamers and the segment is shrinking. However, the console market has seen a tremendous growth in casual gaming segment (specifically Wii). Moreover, this segment offers the following advantages over the PC and hard core console gaming segments: 1. Precedence of accessory-focused successful games – Wii and Guitar Hero 2. Opportunity of co-branding with console makers 3. Hard core gamers prefer fast reaction games to which EPOC is less suitable
This being said, there are also certain disadvantages of the console based casual gaming market: 1. Game developers are more concentrated 2. Software development kit required from console manufacturers 3. Casual gamers more price sensitive than hard core gamers
On balance, given the tremendous growth potential of the casual console gamers, these should be EPOC’s target customers. Moreover, Emotiv should target collaboration with Sony for the PS3 console, though without dilution of the EPOC technology.
Demand Forecast: Assuming that Emotiv manages to strike a deal with one of the console manufacturers, the demand for EPOC can be calculated using the sales of Guitar Hero as a benchmark (Exhibit 2). As a conservative estimate, the sales should be close to 21,000 units in the first year and cross a million units in the third year. Marketing Mix: Assuming that Emotiv strikes a deal with a console maker, we can
Segmenting and targeting: The video game market can be segmented as per the chart in Exhibit 1. The PC gamers largely comprise hard core gamers and the segment is shrinking. However, the console market has seen a tremendous growth in casual gaming segment (specifically Wii). Moreover, this segment offers the following advantages over the PC and hard core console gaming segments: 1. Precedence of accessory-focused successful games – Wii and Guitar Hero 2. Opportunity of co-branding with console makers 3. Hard core gamers prefer fast reaction games to which EPOC is less suitable
This being said, there are also certain disadvantages of the console based casual gaming market: 1. Game developers are more concentrated 2. Software development kit required from console manufacturers 3. Casual gamers more price sensitive than hard core gamers
On balance, given the tremendous growth potential of the casual console gamers, these should be EPOC’s target customers. Moreover, Emotiv should target collaboration with Sony for the PS3 console, though without dilution of the EPOC technology.
Demand Forecast: Assuming that Emotiv manages to strike a deal with one of the console manufacturers, the demand for EPOC can be calculated using the sales of Guitar Hero as a benchmark (Exhibit 2). As a conservative estimate, the sales should be close to 21,000 units in the first year and cross a million units in the third year. Marketing Mix: Assuming that Emotiv strikes a deal with a console maker, we can