SuperApp and other partners conduct a project called Memory Bites, a game concept to help seniors in delaying memory related problems. This article aims to build a business model for Memory Bites. The article discusses the need of Memory Bites and proposes a business model.

Authors: Huy Bao and Torsti Rantapuska

Introduction

Social public expenditure to the aging population is now one of key concerns in the European Union (EU) countries. In 2012, the expenditure on pensions among the EU-28 was around 12.8% of the total GDP (Eurostat, 2013). This figure for Finland in was 13%, and it has increased steadily since 2011. The aging of the population is likely to result in the increase of memory related diseases. As the population ages, more citizens suffer from memory disease. For instance, 95,000 Finnish citizens suffer from at least moderate dementia, and around 30,000-35,000 citizens suffer from a mild memory disorder (Finnish Ministry of Social Affairs and Health 2013,  7).

Universities and software companies have started to focus on the problem by developing applications that may help delay memory disease and even improve memory. In cooperation with other universities and companies, Lahti University of Applied Sciences is organizing an international project to develop social games to train and diagnose memory-related problems. The project called Memory Bites is a game concept that helps players improve their memory health and delay memory-related problems for at least one year for people of 45 years and older.

The aim is to create a business model that the project team can use 1) to improve its business and strategies and 2) to attract capital. In addition, the created business model clarifies the value Memory Bites provides for its end users and the society as a whole. The presents article introduces the following topics: 1) the need to find a solution to memory disorders, 2) games can improve memory, 3) perspectives and opinions from potential Finnish end users, 4) an overview of Memory Bites, and 5) a business model proposal for Memory Bites.

The need for Memory Bytes

According to the Finnish Ministry of Social Affairs and Health (2013,  7), the number of Finnish citizens older than 65 accounted for 20.5% of the total population in 2015.  The percentage of people aged 60 and over was 27.2. About 13,000 Finnish citizens suffer from a memory disease annually, and by 2020 about 130,000 of them are expected to have at least moderate dementia. Nonetheless, not only citizens who are over the working age have memory diseases. There are approximately 5,000-7,000 working-age citizens who have progressive memory diseases. 75% of patients who receive 24-care are diagnosed with a memory disorder, and in 2010 an average expense for each patient was €46,000 while home care services cost only €19,000 a year. The average cost of taking care of a person who suffers from dementia is €23,600 per year.

By delaying memory-related issues and maintaining the working ability of workforce for one additional year, the financial burden on the society is lightened significantly.

According to Dr. Tapani Frantsi from Susino Oy, it is possible to save €25,000 per year per person in health care costs related to maintaining working capability and to help continue working for one extra year, if memory diseases can be delayed.  The cost saving is approximately from €175,000,000 to 250,000,000.

The percentage of smartphone users in Finland is 69% of the total population (Statistics Finland 2016). In 2014, 58% of the Finnish citizens in the 45-54 age group owned a smartphone and 49% of the citizens over 55 years of age (Deloitte 2014, 4). The seniors are relatively conservative in using a smartphone. They do not spend money on games. According to a survey conducted by Deloitte (2014), only 19% of citizens in the 45-54 age group played games, and only 5% had spent money on games.

Figure 1. The frequency of social network use among Finnish seniors Q1, 2015 (Statista 2016)

The above chart illustrates that almost all the respondents aged from 45 to 74 used social networks in the first quarter of 2015, and approximately 45% of them used social networks daily. Therefore, the relatively high number of smartphone ownership and the growing trend in Finland is good news for the Finnish companies that are developing digital solutions for seniors.

Games can improve memory

Recent studies show that brain training games have positive effects on brain health. They improve executive functions, processing speed, and working memory in both young adults and elderly people (Basak et al., 2008; Boot, Blakely & Simons, 2011; Akitsuki et al. in 2012; Hashizume et al. 2013). The beneficial effects of games on working memory among seniors has also been convincingly demonstrated (Basak et al., 2008; Al-Hashmi et al., 2013; José et al., 2016). The games applied to conduct these studies were Brain Age and Tetris, which were 1) specifically designed to keep the brain active, (2) handheld games, and (3) simple to play. Working memory showed significant improvement in the young adult group who played Brain Age. These results have made video game companies to become more attracted to training games, and more and more brain training games, such as Big Brain Academy and Brain Age, have been released.

To conclude, it is scientifically proved that games with particular designs and features affect working memory, executive functions and processing speed. Thus, games, especially brain training games, can be considered as a simple, entertaining, and effective solution to memory related issues.

Perspectives and opinions from potential Finnish end users

Adults are also willing to adopt memory games. 70% of the respondents in our survey (10 Finnish citizens over 45 of age who own a smartphone) reported that they have felt a decline in their memory in recent years. Not all of them had experienced memory problems in daily life, but they revealed that they would need training or exercises in order to keep their brains sharp. The survey also revealed that if there were a game that could help improve its users’ memory and if the game were free, 80% of the respondents would try the game. The seniors in our interviews emphasized the simplicity of the game. If the game were simple enough, they would be willing to play the game from two to three times a week.

Overview of Memory Bites

The basic framework for the game with several fixed components and features has been established. The game would comprise three main elements: a front-end (games), database, and platform. The role of the game is to provide a channel to gather data from users for the platform, and the purpose of the platform is to analyze and diagnose users’ conditions. The database is the place to store data and the basis for analysis and diagnosis; it makes a difference between the database of memories and big data . The database also acts as user-generated content for the game. The diagnostic procedure will be implemented automatically followed geriatric professionals’ advice. There would be many game concepts that would be based on the available content. The diagram below describes the entire process.

Figure 2. The process of the platform (Huy 2016)

Business model proposal for Memory Bites

According to Johnson et al. (2008), a business model includes four elements: a customer value proposition, revenue streams, key processes, and key resources. In this article, the focus is on the customer value proposition and revenue streams.

Our survey and interviews provided the following two key finding: 1) the majority of the respondents have memory problems and, because of this, some have encountered difficulties in daily life; 2) the majority of the interviewees have not tried any brain training exercises. Therefore, they require brain training activities. Furthermore, simplicity and relaxation have to be prioritized.

Memory Bites will be available first in Finland. Because of the aging population and the high number of citizens suffering from memory disorders, Finland is a potential market where to start building and developing a customer base and brand.

The customer value of memory-improving games has been scientifically proven. Games can be considered as an economical, entertaining, and effective solution to prevent memory disorders. In addition, playing games can be good exercise in keeping the brain sharp. Below are the particular solutions and value that Memory Bites offers to its end users:

• An economical, entertaining, and effective solution to prevent memory disorders: Memory Bites will be a simple and relaxing game that aims to help its players improve their memory and delay memory related problems. The game can also be used as a part of a treatment plan or procedure. Memory Bites will provide information about the condition of its users’ memory, thereby allowing timely treatment. Memory Bites will be available for free.
• Mental exercise for the brain: as the human body, the mind also needs exercise. By playing Memory Bites, users can exercise their brains in order to keep them sharp.
• Promoting social communication and reminiscing of one’s own life: The game will require users to interact with other people, especially with friends and relatives. Furthermore, there are several game concepts that will be based on content provided by users themselves, particularly content related to the users’ past such as pictures.

In addition to the value offered to end users, Memory Bites also brings value to the society. By delaying memory related issues and maintaining the working ability of the workforce for one additional year, the financial burden on the society is significantly lightened.

The revenue stream is somewhat complicated. Memory Bites will be provided for free, so the game itself cannot generate revenue. Therefore, a multiple-revenue-stream strategy is applied.  The following are the revenue stream proposals for Memory Bites:

• Selling the data for medical centers / medical professionals: The game can gather data about the memory condition of its users, and this data can be commercialized by providing it for medical centers and/or experts. However, applying this method requires the users consent.
• Selling / Licensing the game to medical centers or nursing homes with development and maintenance services: There could be a particular version of Memory Bites sold to medical centers or nursing homes. The game could then be used as a part of a treatment plan or procedure.
• Licensing the game platform: SuperApp could license the game platform to another technology company or developers.
• Partnership with mobile network operators or phone manufacturers: Smartphones come with many preinstalled applications from mobile network operators and third parties. For instance, in South Korea, a new Android phone is sold with an anti-virus application and LG Uplus (LG U+), a cellular carrier. Samsung, on the other hand, offers its Galaxy users premium third-party applications through Galaxy Gifts. This trend does not exist in Finland yet. However, if this method were applied, it could be effective because Memory Bites would be readily available when a user buys a new smartphone. Our survey revealed that the number of respondents who have not actively downloaded applications is relatively high and only 26% of the respondents keep themselves updated about new applications.
• Providing advisory service: The core team of the Memory Bites project includes geriatric experts and doctors. Therefore, Memory Bites can provide users an advisory service on their condition.
• Advertising: Advertising is still the most common way to monetize free applications. A well-designed advertisement not only makes users engaged but also brings in revenue. According to Unity’s case studies, video advertisements seem to be highly effective.

In addition to the customer value proposition and the profit formula, the business model proposal for Memory Bites also includes certain key resources and key processes. While the suggested key processes are indispensable activities involved in the process of developing and commercializing Memory Bites, the key resources are essential to deliver the customer value proposition. The key resources include both physical assets and intangible assets. The image below summarizes the business model proposal for Memory Bites.

Figure 3. Business model proposal for Memory Bites (Huy 2016)

Conclusion 

In conclusion, the business model proposal for Memory Bites includes four essential elements, and the proposal can act as a framework when the project team starts writing a business plan and starts planning to launch Memory Bites. However, a more detailed and larger scale market and consumer behavior research is still needed. The effectiveness of the proposal can only be verified in a real business environment. Furthermore, the Memory Bites project team needs to update and comply with new regulations during the developing and the planning process. The focus should be on data protection of business processes and having the consent of users to collect and process data on their medical conditions.

References

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Authors

Huy Bao completed a Bachelor’s Degree programme at Lahti University of Applied Sciences and specialized in Business Information Technology. He received a scholarship from the Korean Ministry of Education during his exchange study period. He has gained programming experience in projects and worked as an IT Auditor at Ernst & Young. He is now looking for a job in programming or data analysis.

Torsti Rantapuska is a Principal Lecturer at Lahti University of Applied Sciences. He has been teaching Business Information Technology for over 30 years. His PhD dissertation deals with end-user application developers and organizational learning.  He has published papers on software acquisition.

Published 31.3.2017

Reference to the publication

Bao, H. & Rantapuska, T. 2017. Business model for Memory Bites, an innovative solution to memory disorders. LAMK RDI Journal. [Electronic journal]. [Cited and date of citation]. Available at: http://www.lamkpub.fi/2017/03/31/business-model-for-memory-bites-an-innovative-solution-to-memory-disorders/