Scott Forbes of General Electric

Speaker 1: 1

Wake Up and Smell the Innovation: How Traditional Media and IT are Rejoining the Game

April 17, 2008 LSI Telecoms 2008 Scott Forbes, Ph.D. Technology Ventures

“Don’t shoot! I’m with the science team…” --Half-Life (1998)

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 1/ GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 2

Cathode Ray Tube Amusement Device • DuMont Labs • June 1938: first electronic TV sold to public • 1946: Founded first licensed TV network • 1948: US#2,455,992

Tennis for Two (1958)

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 2/ GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 3

Pong (1972)

Pong Lawsuit (1974) • Magnavox sued Atari; Atari settled for $700K • US#3,728,480: Television Gaming and Training Apparatus

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 3/ GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 4

How Lucas Made Bank

Video Game Market Size 2007 ($B) Hardware = printers Software = ink

RoW $24B

US $16B

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 4/ GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 5

Console Sales

Sample of Multi $B Franchises

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 5/ GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 6

Top Video Game Franchises Game Mario Pokemon Sims Final Fantasy Grand Theft AutoNFL Madden Tetris Fifa Legend of Zelda Donkey Kong

Sold 200 165 100 80 70 70 70 65 52 50

Released 1981 1996 2000 1987 1997 1988 1985 1993 1986 1981

Retrospective & Consolidation: EA $3.09B revenues (2007) 24 titles >1M copies Trying to buy Take Two

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 6/ GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 7

Overpaid Executives: Peter Moore • President, EA Sports • Base salary of $45,833.33 per month or $550,000 annualized • Bonus target is 75% of base salary • Non-Qualified Stock Option to purchase 350,000 shares of EA stock • 50,000 Restricted Stock Units (RSUs) • $1,500,000 bonus • $300,000 moving expenses

Halo3: “Biggest Entertainment Launch in History” (2007) • $170M sales in first 24 hours – Star Wars: Revenge of the Sith: $50 million – Pirates of the Caribbean 3: $55 million – Spider-Man 3 : $59 million • $300M sales in first week • 1.7M preorders • 1M online players in first 24 hours – 3.6M hours of gameplay first day – 40M hours in first week • $10M spent on marketing

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 7/ GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 8

WoW (2004): Ultimate Service Blizzard ~10M Subs 5.5M Asia Subs 2.5M North America 2M Europe $2B Annual Cash Flow Mods Matter

Franchises Spread Like Viruses Activision •2 years, 14M units, $1B Revenue •Download: 5M; ~$6 each=$30M

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 8/ GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 9

Video Games and VoIP • 2004: Xbox Live • 2004: Nintendo DS • 2006: Sony PS3

"We thought a lot about what's the essence of games, and so much of it is about sharing the experience with someone else…Without it, you don't feel who's on the other side; you don't feel the emotion. To a certain extent, you might as well be playing against the machine.” --Scott Henson, Xbox (2004)

Patent Lawsuits • Sony vs. Immersion (2007), $97.2M – Haptics, force feedback

• Gibson vs. Activision’s Guitar Hero (2008) Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 9/ GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 10

“Make Love, Not Warcraft” (2006)

“We were excited to hear that the creators of 'South Park' were interested in featuring World of Warcraft in the opening of their new season, and we really enjoyed collaborating with them to make this happen. We're looking forward to sharing the experience with our employees and our players as well when the season debuts this week.”—Michael Morhaime, Blizzard Cofounder

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 10 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 11

High Media Currency

“More Crap” (2007)

Director Seth Gordon Gets deal

Could I Make This Up?

Ursula will play the lead role and cover model in a global video game by THQ, “Juiced 2: Hot Import Nights” soon to be released on consoles such as XBOX360 and Playstation 3. This video game will also have a special DVD featuring Ursula just for the fans. Her commercial for Juiced 2 will air in the fall of 2007 and will also be seen worldwide. Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 11 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 12

Games Lending a Helping Hand…

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 12 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 13

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 13 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

• • • •

Speaker 1: 14

Began in 1999, Private, For-Profit Reviewed > 6,300 business proposals Invested in > 100 companies Tech Priorities – Application Software and Analytics – Bio, Nano, and Chemical Technologies – Communications and Infrastructure – Digital Identity and Security – Embedded Systems and Power

• 3-D design software that makes design exploration more accessible • Groups throughout the federal government, defense, and first-responder communities have a critical-mission need for tools that can accelerate the process of creating 3-D environments for rapid mission planning and rehearsal, training, and post-facto situational analysis.

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 14 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 15

Google Earth: Ctrl+Alt+A = Flight Sim

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 15 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 16

Sony, Toshiba, IBM: Cell Processor

Started in 2001 $400M+ Georgia Tech

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 16 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 17

Stanford: 3-D Image Processing; 30K

3-D Image Processing • Mayo Clinic ported and optimized their Image Registration Application on the IBM BladeCenter® QS20 "Cell Blade" – 50x image processing • The advance significantly aids image registration – Computer-enhanced alignment in 3-D space of two medical images obtained at different dates or by using different imaging devices. Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 17 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 18

Computer Graphics & User Interfaces Lab

Goblin XNA is a platform for research on 3D user interfaces, including mobile augmented reality and virtual reality, with an emphasis on games.

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 18 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 19

Last Frontier: Mobile “7.5 million people downloaded and played a game on their phone, outnumbering other mobile activities - like listening to music and participating in social networks. Smartphone users in particular are avid consumers of games, with 7.3 percent downloading a game in the month--more than double the market average.”—Seamus McAteer, Senior Analyst for M:Metrics , March 2008

Open Handset Alliance Software

Handsets

Semiconductors

Mobile Operators

Other

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 19 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 20

Wi-Fi Army (2008)

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 20 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 21

Wi-Fi Army Screenshots

What is WiMax?

(Worldwide Interoperability for Microwave Access)

• Fixed and Mobile Wireless Data – Last mile wireless broadband access – 802.16e supports mobile access – Up to 268 Mbps and ~30 miles; 10/2 more likely • Presently 175+ trials. By 2010: – $16.4B service revenue – 15.4M subscribers – 41% subscribers in Asia Pacific markets

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 21 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 22

Wi-Max Ecosystem Licensed/Unlicensed Spectrum 2 to 66 GHz

Network Service Provider

Licensed 2.5 GHz most common in US

Wi-Max Equipment Provider Chipset Provider

Core Equipment Minor Players

XOHM • Intel spending $2B to fund Sprint+Clearwire WiMax effort in 2.5 GHz – Intel and Motorola invested $900M in 2006 – Clearwire 350K subs; Spring 54M

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 22 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 23

WiMax and Healthcare • Intel Australia and Airspan Networks • Australian Grand Prix • Improve communication flow between the on-site trauma unit and medical specialists at the Alfred Hospital 3km away

WiMax and Healthcare • Clinicians received live feeds from the track on the TV. The wireless camera on top of the TV provided two-way video conferencing with the Alfred hospital.

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 23 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 24

WiMax and Healthcare • A bed area. A notebook wirelessly connected to the wireless LAN, which was then linked using WiMax.

WiMax and Healthcare • Medical workers used a portable xray machine to send x-ray images from the field back to the hospital via the WiMax network.

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 24 / GE ‹footer› / ‹date/time›

Scott Forbes of General Electric

Speaker 1: 25

Branches on Regulatory Tree • • • • •

Consumer Protection Data Protection Accessibility Law Enforcement Access Emergency Services Access

Wake Up and Smell the Innovation: How Traditional Media and IT are Rejoining the Game

April 17, 2008 LSI Telecoms 2008 Scott Forbes, Ph.D. Technology Ventures

Law Seminars International | Telecommunications Law | 04/17-18/08 in Seattle, WA 25 / GE ‹footer› / ‹date/time›