TECT Co – Virtual
Reality Case
Competition
Client Computing revenue has been decreasing at a 3% CAGR in the last 3 years
Client Computing Group – Revenue
TECT Co Segments - Revenue vs. Profit - 2016
32 908
Client Computing
10 646
17 236
Data Center
Programmable Sol.
All Other
TECH Co Security
-3%
32 219
32 908
2015
2016
7 520
2 638
585
Internet of Things
Non-Vol. Memory Sol.
34 872
2 576
-544
1 669
-104
199
-5 629
2 161
Revenue
Op. Profit
2014
400
Given that the Client Computing Group represents 83% of the operating profit, TECT Co’s strategy is to invest in new
technologies that increase PC use
Source: Capital IQ
VR has the potential to increase PC usage; however, it has not been adopted rapidly by
consumers
Emerging Technologies Hype Cycle
VR Consumer base (mm)
Expectations
According to Gartner, VR will
increase PC use faster than
other disruptive technologies in
the Hype Cycle, attracting more
than 100mm customers by 2020
Videogames
Leisure
Retail
Others
Videogames, Leisure and
Retail represents 95%
443
+33%
133
Innovation
Trigger
Peak of
Inflated
Expectation
Trough of
Disillusionment
Time
Slope of
Enlightenment
Plateau of
Productivity
44
2017
2020
2025
90% of potential users are interested in experiencing VR in gaming, leisure, and retail. Therefore recommendations to
increase awareness and adoptions should be based on analyzing those industries…
Source: Gartner & IDC – Hype Cycle curve in Appendix
TECT Co should focus on Core and Casual Gamers to drive growth in 6 – 12 Months
We have a ready base of gamers to leverage
Average gamer is 31 years old and has high
disposable income
%age of HH
60,0%
100
Total HH
50,0%
67
48
# of Gamers
Dedicated
Gaming Device
54%
53%
52%
30,000-49,999
50,000-74,999
More than 75,000
46%
40,0%
30,0%
20,0%
11
VR
3
PC/ Console VR
10,0%
0,0%
Less than
30,000/year
• There is high intend to purchase among gamers with 12% of all online users plan to buy VR in next 6 months
Given the low market penetration and high intend to purchase, TECT Co target customers through VR games at E-Sports,
bundling VR with PCs/ PC components and creating easily consumable content
Source: Entertainment Software Rating Board, The NPD Group, EEDAR and NewsZOO.
Live events, travel and physical activity will help VR to reach different segments
Live events: concerts and sports
Streaming: movies and TV shows
Awareness of the technology
Bundle sales with streaming and
physical activities
Source: Hollywood Reporter
Source: ReportLinker
Source: Business Insider
Source: SingularityHub
Part of this revenue can be
captured by VR in a new form of
watching these events
$100+ billion-dollar market
There is an interest to buy or spread
the word from people that already tried
Different segments need awareness of
anything beyond gaming
Bundle sales can increase
awareness and ease to buy with
pre setup and preinstalled apps
Service providers already have
the consumer trust
Retail partnerships can introduce customers to VR technology, which in-turn can drive PC-based VR
TECT Co should partner with major retail chains to
provide PC-based VR capabilities
•
•
E-commerce can be great platform to introduce users to
mobile-based VR
US E-Comm
Sales (M)
Several retailers such as Lowe’s home stores
and Northface are using VR to provide
customers with enhanced shopping experience
75% of surveyed consumers would prefer VR
experience in store while purchasing furniture or
apparel.
TECT Co should identify right content providers and match
them with retail chains to showcase exclusive VR content.
+9%
360
Fashion
70
Furniture and appliances
80
•
•
395
77
85
431
84
90
462
90
94
115
124
Electronic & Media
96
105
Food & Personal Care
Toys, hobby
39
76
44
49
54
84
93
100
2017
2018
2019
2020
60% consumers prefer apparel and Furniture related mobile VR
content
50% of respondents would explore PC-based VR after having
favorable mobile VR experience
TECT Co should partner with retailers and content providers to showcase capabilities of TECT Co-enabled VR to consumers
across US
Source: eshopworld.com
TECT Co should help the Gaming, Leisure and Retail industry to promote VR experiences
among consumers to accelerate adoption by following a three-step process
Alternatives
Bundle PCs & VR Headsets
1
a.
b.
Facilitate partnerships between Headset companies
and PC manufacturers to provide bundle deals
Promote VR games at Esports
Value vs. Effort
Value
High
Mid term
6-24 months
Short term
< 6 months
Long term
> 4 years
c
Bundle services and equipment with VR headsets
e
f
a
c.
2
d.
Partnership with streaming and live events content
providers to provide bundle sales in their channel
Partnership with equipment and physical activities
content providers to provide different experiences
g
b
Med
h
d
Support Retail Content Generation
3
e.
f.
g.
h.
Identify Retailers that can influence VR technology use
Create partnerships with retail content developers
Connect developers and retailers
Promote retail VR experiences in main retailer stores
Low
Low
Med
High
Effort
Risk and Mitigation
Risk
Description
High Pricing of VR
Headsets
Priced at >$600, PC-based VR headsets may be
too expensive for users
Bundling headsets and PCs with attractive
discounts
Dominance of mobile
VR
Mobile/Standalone VR technology grows
sophisticated enough to negate need for PCbased VR.
Support content providers through TECT Co Capital
to incentivize creative of advanced content in PCbased VR
Focus on Gaming
Conversations in gaming could position VR as
gaming only device
Work with partners to showcase and market
multiple use cases for VR
Complex buying
Process
Buying VR is becoming a complex process with
multiple platforms which are incompatible with
each other, leading to decision paralysis by
consumer
Work with industry groups to create standards to
simplify buying process
Incentivize content creators to work with different
platforms to break isolation
High
Low
Level
Mitigation
Next Steps
Invest in new
technology to
enable VR for
Mainstream PC
Gaming
Promote VR games
at Esports
Create VR bundles
with PC
components
Leisure
Create partnership
with service/content
providers like
Amazon, Netflix,
HBO, Comcast
Promote new
experiences to
users compete
while doing
exercises
Market pre setup
and pre installed
apps for a specific
use
Retail
Generate retail
content for PCbased VR
Form partnerships
with retail chains to
showcase TECT
Co-enable VR
Support creation of
mobile-based
content for ECommerce
0
