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Medium Launch Decision Risk Analysis Go/No-Go Decision

Novelty Games

#Gaming #Consumer Electronics #Technology
ProHub Comment

This is a complex strategic decision case requiring candidates to balance quantitative financial analysis with qualitative risk assessment. The case tests ability to structure a multi-dimensional problem involving revenue optimization, cost analysis, reputational risk, and competitive positioning under time pressure.

Estimated Time 15 minutes
Difficulty Medium
Source ESADE
50 / 100
Novelty Games, a gaming company, is launching their new generation gaming console, “Novel 2.0”. The Chief Product Officer’s team has discovered a hardware issue with the console, which results in a 5% probability of the console burning out within one year of usage. The CEO of the company seeks your services to assess whether to go ahead with the launch or not.

Clarifying Information

  1. The company is planning to launch the product in the next 3 months.
  2. According to the R&D team, it will take at least 12 months to solve the technical issue.
  3. There are 3 primary competitors in the market. However, in terms of market share, Novelty Games is the leader in the industry.
  4. The main competitors already have products with similar technology. The Novel 2.0 launch is already 1 year behind these competitors.
  5. The company provides a standard one-year warranty covering servicing and replacement (only if needed) for all products. For Novel 2.0, the company plans to offer an exclusive door-to-door replacement service.