The most promising path involves a strategy of licensing intellectual property and partnering with experienced market players to bring the whole product to market. Licensing the device technology and game platform to an established player in the gaming market is the most likely scenario. Given the novelty of the approach, Design Anticipation must also remaining flexible in anticipating other market adoption patterns. No matter the outcome of the consumer market development effort, the long-term strategy of licensing intellectual property—as opposed to entering the market as an original equipment manufacturer—is preferred.
The market opportunity
Four major trends in technology adoption driving the development of the Polyopticon’s commercialization strategy:
• Motion detection and Haptics. From Microsoft’s recently-released Natal gaming interface to MIT Media Lab’s widely influential SixthSense demo , new modalities for interaction are beginning to emerge in force. Driven by the phenomenal adoption of Nintendo’s Wii, the confluence of technical development and market demand for new modes of interacting has opened new market opportunities for unique haptic-driven interface devices. Such an expanding market will support entry of a further transformative product such as the Polyopticon.
• Social-mobile networking driving new patterns of gaming and simulation adoption. Here we recognize the confluence the two large markets that are developing – mobile and social networking – into an emerging area of concern both for researchers (http://www.thesocialmobileweb.org/) and in the market. Of the applications driving this merging of trends and markets, gaming (Urban gaming, mobile mixed reality) is certainly one of the most compelling. As today’s Smartphones become ever more capable, it is possible to envision the emergence of specialized gaming environments that take advantage of ubiquitous connection. There will certainly be demand to drive large numbers of adopters throughout the product’s lifecycle, as the tools, networking resources, and sheer number of players on-line will continue to expand at double-digit growth rates for the foreseeable future.
• Cloud computing. The growing accessibility to large-scale server-based resources points to an emerging but potentially astronomical growth of applications running on virtual resources in the emerging cloud computing infrastructure. Google, Amazon, and Microsoft (among others) have fixed their eyes on the growth of consumer cloud availability alongside the expansion of applications for the commercial sector.
• Massive multiplayer gaming. Blizzard Entertainment, the publishers of World of Warcraft, have built a business engine that now generates over $1 billion per quarter for its parent Vivendi by maintaining more than 12 million global users of its online gaming engine. Growth in the market for on-line gaming remains robust . Evolving models of MMO games developed across clusters of resources are emerging. Platforms dwarfing World of Warcraft’s 12 million monthly paying subscribers, running on clustered and distributed virtual resources, are easily foreseen as emerging in the next three to five years.
Projecting the convergence of these three trends, it is clear that a huge opportunity exists in the emerging market for haptic-based controllers for complex gaming applications. In terms of developing a marketing strategy, the Polyopticon is now envisioned as a “super-smart” controller device driving a gaming system. Delivering this device into the $50 billion-plus (according to PriceWaterhouseCoopers) global market for computer gaming—a market still growing at double digits – yields the fastest route to the largest potential revenue. From our analysis, this device has the potential to achieve sales of over 100 million units worldwide by 2014. This outcome depends on development of gaming software that specifically takes advantage of the device’s novel temporal-haptic interface.
The initial plan is to partner with an existing gaming device manufacturer (and its associated partner network) to develop the entire market infrastructure. By developing a specialized application that can only be played using the Polyopticon, the unique capabilities of the device can be demonstrated and an entire new domain of game play using the device can be developed. This unique game –capable of being driven only by the Polyopticon–will serve as the means by which the market can be penetrated. The importance of developing the game play using the device – the “moves”, modes, and models used inside the game will cause a virtuous cycle between the game’s evolution and the device’s adoption. By developing the game – its environment, narrative structure and contextual frames, interfaces, processes, physics and other interfaces (e.g., communications, media) – the full capabilities of this unique temporal-haptic interface can be fully fleshed-out.
Imagine a massive multi-player game with users dispersed globally, all working together using the temporal-haptic interface to develop new cues, textures, and competencies using this device. Imagine being able to share full-fleshed out virtual scenarios inside the game play model that can be replicated, annotated, and modeled quickly into muscle memory. Building an entirely new set of game play and interface primitives requires widespread adoption of the device and a critical mass of user acceptance.
One of the reasons that we have focused on the strategy of working with a controller vendor on the gaming industry is that gaming is an area in which the US maintains competitive advantage. The entire ecosystem for the market around “super-smart” controllers can focus on US development resources. While a globalization strategy is vital, the target market for design and development is largely based in the US at this point.
The major challenge the Polyopticon will face while pursuing this commercialization strategy based on adoption in the gaming market is the price at which the device will be offered. Can the device be made sufficiently economical to reach a consumer marketplace? At present the device, as envisioned, embodies a number of state of the art technologies. But following a Moore’s law-type adoption path, it is readily envisioned that component costs for the device – particularly for OLED-type material – will drop rapidly in an 18-month window. Our best-case scenario foresees this device becoming available in the consumer marketplace in Q2 of 2011. At that point, the components will have dropped sufficiently to make an introductory $249 to $299 retail price range feasible. Once a sufficient number have been adopted and are in use, and as the surrounding development and support infrastructure develops, prices will predictably drop.
Figure 2. Commercialization Strategy Matrix
Returning to the discussion about maximizing this technology’s potential for revenue generation, we looked at the technology as a platform, and examined the extent to which the given applications yielded themselves to scalability – the potential for network effects to generate a large and emerging array of follow-on products. We also looked at the potential markets and saw the raw number of devices that could be sold. Given our inference about the drivers for the gaming market, the resulting chart shown in Figure 2 illustrates that applying the Polyopticon in the game controller niche—with the intention to expand that niche around this unique platform—is the preferred strategy.
Finally, the path of taking the results from the two SBIR phases and getting into the business of building and marketing the devices is not considered a viable strategy. Finding uptake and commercial viability for the whole product platform the device represents requires focus on building various strategic and intellectual property licensing partnerships as the primary focus. Further, we have found that the market for venture and private equity funding would not likely support such a potentially risky device, no matter how novel and desirable its capabilities. The effort to bring this device to successful commercial fruition will require one or more deep-pocketed partners with established, targeted channels in the market, bringing as well sophistication in integrating this complex portfolio of intellectual property into a new product offering.
Our commercialization timeframe is based upon assumption that the novel components the device comprises – bendable displays, high performance portable processors, high performance accelerometer arrays and high-speed wireless networking – all reaching price points within the next 18 to 24 months that will make the device viable at consumer price points. While the marketplace has been rapidly adopting portable applications, the limitations imposed by these portable devices – their size, lack of resolution, and lack on intrinsic spatial awareness will begin to reach rather hard limits. The Polyopticon is seen as a device that can move into a niche that will be seen as a hybrid between a smartphone and a netbook. It will provide capabilities that systems based on legacy designs will not.