Royal Cinemas, a NYC theater chain facing declining ticket sales, considers converting theaters to luxury cinemas. The case explores market opportunities, financial implications, and entry strategy. Key analyses include evaluating the luxury cinema market growth, calculating potential revenue increases, determining breakeven point, and brainstorming differentiation strategies. The recommendation supports entering the luxury market due to projected growth, higher revenue potential, and differentiation opportunities. Risks include competition, renovation costs, and reliance on concession revenue. Next steps involve organizational preparation, marketing strategy development, and exploring partnerships.