Upload
riki-yao
View
174
Download
2
Embed Size (px)
Citation preview
Video Game
• Industry & Forecast
• What Can Shopify Plus Do
• First Step: Ubisoft
• Implementation Plan
• Financial Forecast
Movie
• Industry & Forecast
• What Can Shopify Plus Do
• First Step: Warner Bros
• Implementation Plan
• Financial Forecast
Page of ContentRecommendation
Conclusion
Recommendation
• Develop Entertainment Industry segment in the Consumer Electronics and Consumer Goods Vertical
• Focus on Video Gaming and Movie Franchise Merchandising
• For Video Gaming focus on console and PC in-game merchandising API
• For Movies focus on unique Cinema based merchandising POS
Video Game Segments: Console and PC
Industry & Forecast
14
14.5
15
15.5
16
16.5
17
17.5
18
18.5
19
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
North American Gaming Revenue (billion USD) 1
North American Gaming Revenue (billion USD)
2013 North American Video Game Licensing Royalties Revenue: 266 Million USD3
Source: [1] http://www.statista.com/statistics/246895/value-of-the-north-american-video-game-market-by-component/[2] https://www.superdataresearch.com/market-data/north-america-digital-games-market-report/
[3] http://www.hollywoodreporter.com/news/licensing-revenue-royalties-rose-33-711887
U.S. and Canada Digital Games MarketBy Game Category (2014E) 2
Key Players
What can Shopify Plus do?
• Provide In-game merchandising channels to increase impulse purchases
• “The study also reveals that manufacturers looking to capitalize on impulse purchases should put a strong focus on packaging while retailers should focus on merchandizing”4
• “A survey of in-store impulse shoppers shows images or descriptions on game packaging ….extremely important to 40 per cent, while 25 per cent are swayed by in-store demonstrations of the game”4
• “15 per cent of impulse purchases were made online”5
• “Two years ago the market for Gaming Toys & Merchandise was estimated at around £60m and last year….£77m based on NPD Group figures. The increase…illustrates that retail are looking to other categories to drive revenue and margin”4
[4] https://www.npd.com/wps/portal/npd/us/news/press-releases/pr_111122/[5] http://www.licensing.biz/sector-spotlights/read/the-video-games-licensing-boom/026901
• Well know franchises Assassin’s Creed, WatchDogs, Rayman
• Established Online Store: Ubiworkshop
• Large North American Presence
First step: Ubisoft Entertainment
[6] http://www.newzoo.com/insights/the-top-25-public-companies-generated-54-1bn-game-revenues-in-2014-up-10-4-year-on-year/
Top 10 Public Companies by Game Revenues6
Comparison of FY2014 and FY2013 Revenue ($Bn)
Ubiworkshop7
[7] http://store.ubiworkshop.com/
Shopify Plus Business Model
[8] https://www.shivarweb.com/5043/shopify-plus-enterprise-ecommerce-platform-review/[9] http://wemakewebsites.com/blog/shopify-pricing-what-percentage-do-they-charge
• Goals: Growth and Value Generation
• Market Focus: PC and Console Video Game integrated merchandising
• Core Activities: API provision, Server hosting, Tracking and Analytics
• Transactional Structure:
• Monthly subscription for physical merchandise: $1000-$50008
• Profit Sharing: 1.00-2.00%9
Powered by
Implementation plan
• Two-fold introductory phase
Phase 1: Transition Ubiworkshop online to Plus
Phase 2: Implement in-game API for next major release
Implementation Plan Contd.
• Note: Test can be stopped If user base falls below 20% of initial adoption rate, we stop the test (depends on the game)
• Note: Plan is based on publicly available information. Release schedule can be altered based on release date provided by Ubisoft when in a partnership
Major Release Date for in-game API
March 8, 201610
[10] http://blog.ubi.com/the-division-an-update-to-our-beta-plans/
Financial Revenue Forecast for Shopify Plus
• Three Year Cumulative Revenue: 2.53 million
• Based on:
• Ubiworkshop traffic (120,000 views/month)11
• Shopify transaction charges (1.8% of rev, 20 cents/CC trans)9
• Shopify Plus monthly fees ($1000-$5000)8
• Assuming• At least half of Ubiworkshop views result in transactions (constant
60,000/month)
• $50 average transaction value (LOW BALL ESTIMATE)
• $1000/month for phase 1, $5000/month for phase 2
[8] https://www.shivarweb.com/5043/shopify-plus-enterprise-ecommerce-platform-review/[9] http://wemakewebsites.com/blog/shopify-pricing-what-percentage-do-they-charge
[11] http://www.mustat.com/ubiworkshop.com
Future Steps
[8] https://www.shivarweb.com/5043/shopify-plus-enterprise-ecommerce-platform-review/[9] http://wemakewebsites.com/blog/shopify-pricing-what-percentage-do-they-charge
[11] http://www.mustat.com/ubiworkshop.com
MoviesFranchise Heavy Selection
Industry & Forecast
• Movie and TV-related merchandise hit $51.4 billion in 2013, according to industry. Royalties from those sales climbed to $2.66 billion12
• The global box office is expected to grow at a CAGR of 5.4% over the next 5 years, to increase from 34 billion in 2013 to reach $44 billion in 201713
• The strong growth in global box office revenue will increase the proportion of box office revenues by 42%13
• Movie theaters generate revenues from 3 main sources:1. Admission2. Concession
3. In-theater advertising
• Concession generates significantly higher gross margins (~80-85%)13
[[12] http://www.therichest.com/rich-list/most-popular/10-movies-that-sold-the-most-merchandise/?view=all[13] 2014-05-07 Cinema Operator Industry Report May 2014 (www.redcapgroup.com)
Industry & Forecast
[13] ] 2014-05-07 Cinema Operator Industry Report May 2014 (www.redcapgroup.com)
Box Office Growth Outlook by Region Revenue Breakdown (2013)
Industry Analysis
• If a movie hits one billion dollars in sales, it’s a safe estimate that toy sales will average $250 to $300 million12
• Time Warner are well known for their Blockbuster movie figures such as Batman, Superman, Harry Potter, Green Lantern etc.
• Establish outlets in North America that sell merchandises in cinemas to audiences during “launch of new movies”.
• E.g. the upcoming “Batman v Superman movie” release in March 2016.
[12] http://www.therichest.com/rich-list/most-popular/10-movies-that-sold-the-most-merchandise/?view=all
Key Players
Shopify Plus Business Model
• Goals: Revenue growth and Value Generation
• Market Focus: box-office movie merchandising outlets
• Core Activities: API and Popify POS hardware provision
• Transactional Structure :• Monthly subscription for Popify service: $1000-$50008
• Revenue Sharing: 1.00-2.00%9
[8] https://www.shivarweb.com/5043/shopify-plus-enterprise-ecommerce-platform-review/[9] http://wemakewebsites.com/blog/shopify-pricing-what-percentage-do-they-charge
What can Shopify Plus do?
• Introduce new POS channels to encourage consumer impulse purchases directly within the cinema
• “…no less than 80% of Americans made an impulse buy in the past year”14
• “Its all about seeing the product ….the product will remind the customer of a problem that the product in question can solve” 14
• Creates “An overwhelming attraction to the product” 14
• Costco Effect: “…promotes impulse purchases by limiting peoples options to trendy, popular items…” 14
[14] http://www.virgin.com/entrepreneur/psychology-impulse-purchase
Implementation plan
• Phase 1 • Design Offline-Online POS service for purchase of movie
merchandise through the Popify channel• Integrate movie producers’ online stores into Shopify platform
• Phase 2• Use Ontario as a test market
• Phase 3 • Launch outlet parallel with
blockbuster movie • e.g. Batman v Superman
• Phase 4• If successful rollout to rest of
North America & later Internationally
Implementation plan
• Note: Plan is based on publicly available information. Release schedule can be altered based on release date provided by Warner Bros when in a partnership
Financial Forecast
• Three Year Cumulative Revenue: $143 million
• Based on:• Walk-in traffic (19.1 million tickets sold in 2013)13and15
• Shopify transaction charges (2% of rev, 0.2 cents/CC trans)8
• Shopify Plus monthly fees ($1000-$5000)9
• At 27.5% of Time Warner Outlets views result in transactions ($52 million)16
Assuming• $30 average transaction value (LOW BALL ESTIMATE)
• $1000/month for phase 1, $5000/month for phase 2,3,4
[8] https://www.shivarweb.com/5043/shopify-plus-enterprise-ecommerce-platform-review/[9] http://wemakewebsites.com/blog/shopify-pricing-what-percentage-do-they-charge[13] 2014-05-07 Cinema Operator Industry Report May 2014 (www.redcapgroup.com)
[15] http://www.statista.com/statistics/187289/box-office-market-share-of-warner-bros-in-north-america-since-2000/[16] http://www.therichest.com/rich-list/most-popular/10-movies-that-sold-the-most-merchandise/?view=all
Conclusion
• Develop Entertainment Industry segment and focus on Video Gaming and Movie Franchise Merchandising
• For Video Gaming focus on console and PC in-game merchandising API. Shopify Plus can first establish a partnership with Ubisoft Montreal
• For Movies focus on unique Cinema based merchandising POS. Warner Bros is an ideal candidate
• Launch test market in the next six months, and the cumulative revenue for the next three years is estimated to be $145.5 million
THANKS