Touché

A gathering place for family and friends

The OPPORTUNITY

Video games have displaced board games

The video screen is a “glass wall” that isolates players

Side-by-side, or over the web, the social engagement is lost

Gamers are increasingly engaged, but increasingly isolated

Insights

Wii, Guitar Hero are breakthrough video games Social interaction that spans generations, but still “eyes

front”

Board Games are more conducive to social engagement

Kids want to play video games with parents and grandparents / Seniors want to play board games with grandchildren

Touch-screen user interface is current and intuitive (e.g. iPhone)

There is latent demand for an unintimidating interface to the internet – Significant opportunity for sales to the “tech-excluded”

Touché – The SOLUTION

Provide all the fun and entertainment that today’s gamers demand

Move the video screen out of the way Learn from and build on iPhone

interface – good for gamers and web-excluded users

The Best of All Worlds SOCIAL INTERACTIVE …and mostly, FUN!

Touché - Product and Features

HOME Version: $2,000 Price Point 22” Widescreen w/ Touch Web-capable w/ browser 10 Software Titles Included:

• Bejeweled• Go• I-Spy• Solitaire

• Net Nanny

• Scrabble• Texas Hold-Em• Finger paint• Backgammon• Insane AquariumThe best gaming, and the best casual PC user system EVER!

How Will We Do This?

GEN 1 Off-the-shelf

PC Platform Selected off-

the-shelf titles Light porting

of a few key titles

KILLER industrial design

Showcase at key restaurants and retailers

GEN 2 Build on Gen

1 exposure Incorporate

Gen 1 lessons Cost

reduction / feature add

Roll out new titles and developer toolkit

GEN 3 Incorporate

Gen 2 lessons

Product Line Expansion Up and Down

Significant new titles, including 3rd party content

The Customers

Commercial – appeals to gamers and surfers Arcades – A compelling, “sticky” experience Restaurants – Order entry, entertainment

while waiting, customer premium contests Coffee shops, hotels, waiting rooms…

Home – Appeals to gamers, and tech-adverse “A gathering place for families”

The Competition

Surface Tension Arcade Coffee Table (UK)

£3,000 - £3,500 19” LCD Flat

Screen Retro games, no

touch, no internet

Chicago Gaming Arcade Legends Console

$2,500 - $3,700 25” TV tube Retro games, no

touch, no internet

Microsoft Surface $12,500 30” projection

display Multitouch Not a home

product

Touché Product Line Development

Premium Exclusive

Home Gen 1

Affordable Gen 2

Mass Home Gen 3

Commercial Starbucks

Commercial Educational

Commercial Waiting Area

(Airport, Office)

Mass Portable

Mass Featured

Commercial McDonald’s

Gen 2

??

Bowling Pin Model

Commercial Arcade Gen 1

Touché Product Line Directions

Smaller, portable $1,000 Retail 17” Touch Screen

Bigger, premium

$3,500 retail 40” Touch Screen

Addressable Market (US only)

Arcades @ 1 each ~10,000 Amusement

Arcades ~7,000 Bowling Centers

Restaurants @ 2 each ~13,000 McDonald’s ~10,000 Starbucks

Households @ 5% penetration 30.2 Million w/ income $75K

TOTAL:

Units 17K

46K

1,510K

______1,573K

Dollars $51M

$138M

$2,416M

________ $2,605M*

*Does not include sales of software, accessories, or services

Strategy for Reaching End Users

Commercial Market Arcades – work with distributors to

sample machines in high-traffic venues Restaurant – Direct contact with major

chains. High-value chains demand and deserve custom solutions

GOAL: Cumulative sales to 25% ofaddressable market in 4 years

Strategy for Reaching End Users

Home Market Initial distribution through Costco or Best Buy Costco is surprisingly high-end in

customer demographics and turnover of major electronics

Best Buy has an assisted sales floor and the Geek Squad for support

GOAL: Cumulative sales to 4% of addressable market in 4 years

Projected Sales (Home & Commercial)

  Year 1 Year 2 Year 3 Year 4

Fixed Costs ($K)

$1,253  

$5,416  

$11,133  

$18,027  

Var. Cost (H/C)

$625 -

$2,629

$7,362

$6,810 $2,723

$21,915

$9,043

Units Sold (H/C) 781 - 3,755 4,090 11,350 7,484 36,525 5,652

Sales $1,328 -

$5,782

$12,270

$14,660

$22,452

$43,830

$16,259

Net $(550)  

$2,646  

$ 6,445  

$11,104  Cumulative Sales (Units): Home: 52,411 /

Commercial: 17,226NOTE: Only 4% and 25%, respectively, of addressable market

Income and Expense Assumptions The greater of $600K/yr or 10% of Sales

will be spent on Advertising and Promotion

Gross margins on hardware ~50% 10% Returns Allowance 20% retail margin for home version 30% distribution margin for commercial

version

Touché – Cash Flow Summary

-5000

0

5000

10000

15000

20000

Net Cash

Income

Expense

Breakeven @ 19 mo. – $1.8M Peak Debt – 200% ROI in 3 Years

Additional Revenue

Leasing (for commercial applications)

Onscreen Promotion and premium play for restaurants

Software (Download or hard copy sales)

Accessories (Keyboard, wireless printer)

Repairs / Upgrades

International Markets

Barriers and Strategies

No fundamental IP protection on the platform

No significant technology barrier to implementation

“First Mover Advantage” may be a disadvantage•Leveraged Supply Chain – technology and financial

•Placement with best retailers and restaurant outlets

•Content licensing – with a skilled Advisory Board

•Iconic and Functional Product Design

Exit – Acquisition

Potential Purchasers of Touché: Traditional Game Company: e.g. Hasbro,

Mattel

Arcade company, e.g. Chicago Gaming Company, Williams Gaming, etc.

Purchase by Tech company – HP, Philips, Microsoft

Business Partners

SECURED: SMART Technologies – mass produces various

touch-screen related productsPOTENTIAL / STRATEGIC: Game publisher – Content and Production SocioFun Furniture – HK/China furniture mfg. Costco/Best Buy – Retail Distribution McDonald’s / Starbucks – Restaurant

Showcase BMI Gaming / thePinballStoreOnline.com –

Arcade Distribution

Founders

Eric C. Peterson – PhD student at Rensselaer Polytechnic Institute, with 25 years of experience, including 10 years at GE and 9 years at Hasbro. Mr. Peterson will handle technical, sourcing, and executive matters.

Lauren Sacks – Majors in Electronic Arts and Management (co-terminal degrees) at Rensselaer Polytechnic Institute, with experiences at leading schools, such as RISD and the Art Institute of San Francisco. Ms. Sacks will handle content, creative, and design matters.

Advisors

In addition to the above, the following have graciously agred to as advisors and Subject Matter Experts to Touché:

Dale Siswick – Former GM of Hasbro Games and Puzzles, with 35+ years of experience in the toy and game industry. Mr. Siswick has held senior management positions in Sales, Marketing, and R&D at Hasbro, and is extremely skilled in establishing and negotiating open innovation technology and IP agreements.

Thomas Dusenberry – Currently head of Dusenberry Entertainment, Tom was the founding visionary and CEO of Hasbro Interactive. Mr. Dusenberry is well-known in the electronic entertainment and gaming industries, and has been a keynote speaker at COMDEX, Game Developer Conference, and the American International Toy Fair.

Susan W. Sanderson, Ph.D. – Dr. Sanderson’s teaching areas include marketing, entrepreneurship, innovation and product development. Her current research focuses on winning with “beacon products” and how outstanding product innovations can trigger market takeoff and effectively bridge the gap between early adopters and the mass market.

Advisors

Mark F. Radcliffe – Distinguished alumnus of Harvard Law School, prominent IP attorney and a partner at DLA Piper in the heart of Silicon Valley. He concentrates in strategic intellectual property advice, private financing, corporate partnering, software licensing, Internet licensing and copyright and trademark.

Benjamin Lee – President of 2n Productions, an independent game studio in San Francisco. Mr. Lee has over 15 years of game industry experience, designing and building games for a wide range of platforms and major software publishers. He graduated from Cornell University with a BS and MEng in Electrical Engineering.

Smart Modular Technologies, Inc. – Smart is a ~$1B Silicon Valley company with extensive experience in embedded PC platforms, touch-panels, and kiosk systems for public and harsh environmental conditions. Their Applications Engineering department is a valuable resource for both current product and future trends of relevant technologies.

QUESTIONS?