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A SuperMinds 2014 Talk by Olivier Braet (iMinds - SMIT – VUB). How annoyed are you by the generalizations business gurus make about technological innovations? And how can we move away from the dreary world of airport management handbooks, that make grand and bland statements about how everything is about to change everywhere at the same time? Have they forgotten the insight that the future might be here, but it certainly isn’t evenly distributed? Without ignoring the profound impact that technological innovations are having on several industries, my presentation will showcase a sober look on industry disruptions, building on the case of educational games.
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Ignore Gurus
Machines will be capable, within 20 years, of doing any work a man can do
—Herbert Simon, 1956—
“ ”
Within a generaBon … the problem of creaBng ‘arBficial intelligence’ will
substanBally be solved —Marvin Minsky, 1967—
“ ”
From Structured best business pracBces to General Business
Models
• Sample of educaBonal games • Focus on revenue models
– Pay-‐per-‐download: ‘Direct revenues’, $0.99 to $3.99 – Freemium model: ‘Indirect revenues’ + for-‐pay features)
Centralized control
Decentralized control
Indirect revenues (advertising)
Direct revenues
Game
Game
Game Game
Game
Game
Game
Game Game
Game Outlier
Companies that ignored the control-‐revenues link were selected away
Or? Managers imitated successful examples from their industry.
What is the business model case, taking into account two disBnct groups?
Game developers want to earn money
Parents & schools want to teach children
BUSINESS MODEL SIMULATIONS • Parents willingness to spend is relaBvely high
=> €84/Y/child in retail market
• Schools’ willingness to spend is relaBvely low => €2/year/child
• 360.000 Flemish lower grade schoolchildren
OPTIMISTIC: 180k STUDENTS
03/06/14 10
€1.512.000
€360.000
€30.240
€1.841.760
€1.080.000 €432.000
€360.000
€21.600 €8.640
€1.841.760
REALISTIC: 90k STUDENTS €756.000
€180.000
€15.120
€920.880
€540.000 €216.000
€180.000
€10.800 €4.320
€920.880
PESSIMISTIC PARENTS + OPTIMISTIC SCHOOLS €378.000
€360.000
€7.560
€730.440
€270.000 €108.000
€360.000
€5.400 €2.160
€730.440
OPTIMISTIC PARENTS+ PESSIMISTIC SCHOOLS €1.512.000
€90.000
€30.240
€1.571.760
€1.080.000 €432.000
€90.000
€21.600 €8.640
€1.571.760
Local market for educaBonal games is under extreme pressure to offer high
quality educaBonal content
40% of the Fortune 500 companies in 2000 no longer existed in 2010
—And all the variaBons on this theme—
“ ” What’s the average company’s 10 year
survival raBo?
29%
Ignore Gurus, Trust yr fieldwork
