Winning Space Game Biz Model

1. Winning Space Game Biz Model Sam Dinkin, Ph.D. CEO SpaceShot, Inc. www.freespaceshot.com

2. What have we done since last Space Access? • Validated math and science excitement amongst players • Validated ad model • Validated value proposition • Comprehensive marketing survey • Test marketing at air shows, sci-fi conventions, space conventions, schools, on the internet and in media • Launched freespaceshot.com • Offer free opportunities to win trips to orbit, trips around the Moon, scholarships and ZERO-G airplane flights

3. Market Opportunity

4. Suborbital Spaceflight Industry Revenue without Games From 8/24/06 white paper updating 2002 Futron Study Conclusions

5. Suborbital Spaceflight Industry Revenue Doubled with Games • 98% of families make less than $250k/year and cannot afford full-pay flights at first • Financing for flights has poor availability and games are self-financing • US suborbital games opportunity $125M 30% growth

6. Relevant Acquisitions • Fun Games $400 million (operates Virgin Skill) • Now 30 million players • IGN $600 million • 23 million unique users per month 2005 • Skype $4 billion • 54 million users when purchased, now 100 million users • You Tube $1.67 billion • 20 million unique users per month • Suggests subscribers worth $13-80 to Space Shot if Space Shot sells the company

7. Market Positioning

8. Positioning of pay game • Probability of play can be expressed as f(E*CA*CP*CC*T) • Kids excited, but have no means to pay. Adults have means to pay, but...

9. Positioning of free game • Kids most interested • Pre-sold on space • Parents say “you can be an astronaut” • Kids have most time available • Tweens (8-12) have computer access and computer proficiency and are most excited about the game

10. Positioning • Probability of free play can be expressed as f(E*CA*CP*T) • Ten times higher demand than pay game

12. Evolution 2008- • Once there are flights and winners, 17+ players will become more interested • New games needed to address all markets • Free drawing • Free poker

13. Competitors • Virgin Volvo 2005 Giveaway • 130,000 players expendable • Microsoft Rocketplane Vanishingpoint Game • 88,000 players expendable • Texas Lottery • 7 million players, $3.4 billion annual revenue • Party Poker • $1 billion 2005 revenue credit card pay illegal

14. Revenue Model • Revenue = Players * frequency * ad rate * ads per play • We are acquiring players at about $8 per player and trying to get that down to $2.50 per player • Frequency for our 2000 players is approximately one play per month (13000 plays made). Trying to get that to 90 per day. • Ad rate is $0.60/thousand (CPM)—business model works at $0.35 CPM and lower if we add milestones. Can get CPM to $15 for interstitials and $2-$3 for banners with 200,000 players • Need 1 million players (10% of kids 8-12 in US) for a year at 90 plays per day to award $300 million flight for two around the Moon

15. Cost model • Operations • Servers: $550/month • Call center: $300/month • Operator/referee: $800/month • Promotions: $120/month • Capital • Technical Services: $3000/month • Advertising/Marketing (above replacement): high • Volvo-Virgin, Microsoft: $12-20 per player

16. Early to Market • RpK not yet flying Rocketplane XP or K-1 • Constellation Services not yet flying • Bigelow not yet flying passengers

17. Business Goals • 200,000 daily players by 2012 • Subscriber acquisition cost down to $2.50 per player • New languages • Spanish 2008 • Japanese 2009 • New games • Free Drawing 2008 • Instant game requires hole-in-one insurance • (3x players for same profit) • Free Poker 2010 • New non-space prizes • Personal space is 3 parts in 10 million of economy • Cars are 1/25 of economy 2007 • Houses are 1/6 of economy 2008 • Cash is 100% of economy

18. Reach goals • More investors • School fundraising sales • Corporate sweepstakes sales

19. How can you help? • Tell your computer teacher friends who teach to kids 8-12 that we have a free lesson plan