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Calcite | Level 5

I work in an industry where revenue is driven by product launches.  It is similar to a video game store, where revenue is generated based on how many new games are launched.  For each new game, sales is usually very high the first week before it drops off over time, and becomes discontinued eventually.


I imagine we would forecast my revenue for my video game store based on how many new games are launched as well as how many other games I am currently selling.  We can assume that the sales pattern for games from the same genre to be very similar.  For example, if my store sold 100 copies of FIFA 17 in the first week, and 50 copies of FIFA 17 in the second week, I can expect a similar trend when FIFA 18 is launched.  I would also expect NHL 18 to follow the same trend as FIFA 17 and FIFA 18, as they are both games from the sports genre.


Let's say I was doing this exercise back in June, and I want to forecast my revenue for the second half of 2017.  I know my historical sale and have added in a variable "weeks since launch", which I expect to use as a dependent variable in the forecast.  I have also coded a dummy variable for "in market" to say 0 or 1, to indicate whether the game is currently available for sale or not.  Using the above example, FIFA 18 launched on September 29, 2017, so I would expect 100 copies to be sold in the first week (weeks since launch = 0, in market = 1), and 50 copies to be sold in the second week (weeks since launch = 1, in market = 1).  Below is an example of what I think my sales would look like:

Games example.png


Let's say I want to forecast revenue for 2018 as well.  Here are my questions:

1. How would you set up your data to so that you could use Forecast Studio to forecast the above?

2. How do you factor in the different cycle length for each type of game?  Maybe Destiny 2 will be in market for a year, but Dishonored will only be sold for only half a year.  Is that how I would use my "in market" dummy variable?

3. I understand I could forecast using a hierarchy with Genre and Game, but how would I add it into Forecast Studio to say that I expect Madden 19 and FIFA 19, which is not in my dataset, to generate x amount of sales?  How would I get these new games to show up in my forecast?

4. I thought about looking at the number of titles for each genre in market (so for Sports, it would be 3 titles for September 15, but 4 titles for September 22) and create a forecast that way, but how do you take into account that each of the games are in different stages of their respective lifecycle?


Please help!



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