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Gaming Network - Case Study Example

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Summary
The paper 'Gaming Network' is a great example of a Business Case Study. Ultimate Gaming Network Inc. will be a startup gaming network Development Company that will be based in Dubai. The company aims at launching its flagship gaming network “The ultimate game” that will be available on both social media sites as well as in mobile devices. …
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Extract of sample "Gaming Network"

Table of Contents Ultimate Gaming Network Inc. 1 Executive Summary 1 Objectives 2 Sales Objectives 3 Mission 3 Keys to success 4 Company summary 4 Company Ownership 5 Start-up summary 5 Company location and offices 7 Services 7 Competitive Comparison 7 Sales literature 8 Technology 8 Market analysis summary 8 Our target market strategy 9 Marketing programs 9 Pricing and profitability strategy 10 Financial management 11 References: 13 Ultimate Gaming Network Inc. Executive Summary Ultimate Gaming Network Inc. will be a startup gaming network Development Company that will be based in Dubai. The company aims at launching its flagship gaming network “The ultimate game” that will be available in both social media sites as well as in mobile devices. As a start, the company will launch its Ultimate games on Facebook in May 2017 and will implement a rigorous marketing plan with the aim of penetrating the market and gaining viral success in the market that has a great potential for growth. The company’s management projects to have gained between 600,000 and 800,000 users within its first four years of operation with a revenue of at least $2.5 million for the year 2017. We see an opportunity for investing in the gaming network industry since it is rapidly growing and we estimate it to be worth over $4 billion with the growth expected to continue for the next five years. We intend to use Facebook as our primary gaming platform owing to its popularity among users. We are introducing into the market a unique product that will contain highly popular gaming elements and together with our strong market implementation plan, we hope to gain a 0.15% of the gaming market share at the end of our first four years of operations in a bid to hit our revenue projections. Objectives Ultimate Gaming Network Inc. aims at creating a successful gaming network that will be highly popular among gamers worldwide. We aim at achieving this by recruiting or acquiring an average of 15,000 active users every month within the first year after the launch. The company also has an objective of continually developing new gaming products with a target of five new products within the first five years of our operation (Dewhurst, 2016). We also have an objective of obtaining $300,000 of initial capital investment funding that will be used in marketing and development of our gaming network. In addition, we aim at acquiring o.oo5% of the market or $ 2.5 million revenue within a year of Ultimate Gaming Network launch. Sales Objectives Mission Ultimate Gaming Network Inc. will have the mission of becoming the leading provider of gaming facilities and platforms for gamers. This will enable the users/gamers to enjoy the exciting and spectacular quality gaming experience anywhere they are and whenever they use our platform on the internet. For the network operators, the company will endeavor to achieve the much needed revenue streams through offering a new type of outstanding quality gaming online facilities and hence this will make our platform their greatest revenue generator. Thus, our company will be the leading gaming entertainment and hospitality company in the markets we will operate through provision of superior gaming value as well as exceptional experiences (Brown, 2016). We will provide outstanding experiences to gamers, provide rewarding experiences for the Ultimate Gaming Network team while offering superior value to our investors. Keys to success The following factors will be key in helping us achieve our goals -Being the first in the market to provide the new entertainment service which has great and broad appeal. -Provision of an exceptional service as well as products which leaves an impression. -Offering a consistent entertainment atmosphere as well as product quality. -management of our internal finances as well as cash flows in a bid to enable capital growth (Lawrence, 2011). -Strictly controlling of all costs at any time with no exception. Company summary The major attributes of Ultimate Gaming Network concept will be as follows; i) Mass appeal-we will focus on themes that command mass appeal with a wide variety of gaming options. ii) Distinctive features- our platform will be distinctively designed. iii) Visibility- Our visibility will be our major strength as we will make use of popular sites such as Facebook which are very popular. iv) Variety- the gaming network will have a variety of games in our software portfolio aimed at catering for varying customers’ tastes and preferences. v) Quality- we will provide high quality gaming software and hardware on which our gaming network will run thus ensuring first class gaming experience for our clients. vi) Quality of service- we will provide quality service through employment of highly trained and experienced personnel with an aim of reaching and maintaining a unique quality image. Company Ownership The company will be co-owned by Mr. Muhammed Ali, Muhammed Zeyid and Hassan Bin Ali who will be its sole directors with Mr. Muhammed Ali being the interim chairman. However, our long-term plans include converting the company into a publicly owned company where investors will be able to buy our shares from the stock exchange. Start-up summary The directors of the company mentioned above have committed to provide 50% of the capital required to start the business with each member contributing a third of the capital. The additional amount will be sourced from the bank. We will need $300,000 to achieve the above goals hence starting the company. The start-up capital will be used to build the company’s headquarters, design the network and acquire all the needed software and hardware to have the company running. The money will also be used in paying miscellaneous expenses incurred in hiring key personnel for the first six months of our operations. The start-up capital requirements are laid down below; Ultimate Gaming Network Requirements Start-up Expense Ultimate Gaming Network Requirements Start-up Expense Cables Designing Marketing Legal fees Copyright Rent Total Start-up expenses Start-up assets needed Cash balance on starting date Salaries deposit Total short term assets Long-term assets Computer Equipment Network Servers W.A.N switches Fixtures and fittings Total long-term assets Total assets Funding: Bank Loan Owners’ equity Short-term liabilities Accounts payable Current borrowing Other short-term liabilities Total short-term liabilities Long-term liabilities Loss at start-up Total capital Total capital and liabilities $ 2500 50000 45000 15000 20000 9000 141500 20,000 30,000 50,000 20,000 6,500 5,000 77,000 108,500 158,500 150,000 150,000 0 0 0 0 0 (141,500) 158,500 158,500 Company location and offices We will offer our gaming services online mainly through Facebook. However, we will have a head office in Dubai which is where the company’s normal activities will be carried out. The location is ideal as there is enough talent to design online games which is what our company is dealing with. We have acquired a 3, 000 feet office floor from where we will carry out our operations where we hope to host our first 30 employees. Services Ultimate Gaming Network Inc. will provide quality gaming experiences for twenty four hours and seven days every week throughout the year. Competitive Comparison We are certain that Ultimate Gaming Network Inc. will have a high level of acceptance among potential customers. Our competitive advantage will include; -offering our gaming network gaming facilities at relatively low price in comparison to our competitors, -the speed of loading any of our games will be superb in comparison to our competitors -we will be known for quality and variety (Kraten, 2015) -We have highly experienced personnel as far as the field is concerned with most of us having worked at Zynga and hence the resources needed for future development capabilities. Sales literature Ultimate gaming will be available in two forms. Ultimate Facebook gaming site will be availed in conjunction with Facebook and the company will receive commissions from Facebook depending on the amount of traffic viewing our Facebook site as well as the adverts that will be placed there. On the other hand, gamers will also be able to access our facilities through our website www.ultimategamingnetwork.com by paying a fee ranging from $1-$4 per game depending on the nature of the game while cash money will also be won. Technology Ultimate Gaming Network Inc. will invest in high quality online technology that will provide our customers with fast and efficient gaming experience. Market analysis summary We anticipate that Ultimate Gaming Network Inc. products will appeal to three broad markets as explained below; a) Young professionals-this includes single young male and female professionals who would like to have some leisure activity after work to get out of work stress at the end of the day. As such, we are optimistic that this group aged between 18 and 35 years will find our facilities attractive. b) College students- this will also make up a large portion of our customer base since they enjoy gaming activities especially where there are monetary rewards (Lynn, 2011). Though they have a less spending power, they are a significant group likely to contribute significantly to our revenues as they are able to play more times than the young professionals. c) Children-we will have games specifically for children and hence we hope this will be a significant customer base especially when they are out of school. Our target market strategy Our market segmentation strategy will enable us serve our niche markets exceptionally well. The strategy which is essential for our main strategy will emphasize on exceptional service, create awareness of our high quality gaming facilities and be focused on our target markets. Marketing programs Ultimate Gaming Network Inc. will position itself as offering unique gaming services to its clients and through our high quality services, we hope to build relationships with target customers to ensure the product is adopted. We have set aside a substantial budget for advertising, tournaments and promotions with an aim of promoting our brand name making it a top brand. We will also make use of media including newspaper and television advertising. Our advertising will be geared towards communicating a core-positioning message for our brand. We will hold a grand opening event that will be aired by all major televisions with an aim of boosting awareness of the brand. We will also perform direct marketing in areas of high traffic such as universities, cinemas and restaurants as well as schools. It is worth noting that we will also have online adverts that will have significant presence in many websites since our target groups are regularly in the internet. Pricing and profitability strategy We intent to use competitive pricing by pricing our games at $1 to $4 per game depending on the nature of a game. This is aimed at maximizing revenue while gaining a significant market share. This coupled with our quality of service is hoped to help us achieve profitability within our first year of operation. The targeted break-even point, revenues and costs are analyzed below; Variable costs 1. Cost of sales $1,300,000 2. Sales and marketing $200,000 3. Utility bills $50,000 4. Other expenses $60,000 Total $1,610,000 Fixed costs 1. Salaries $300,000 2. Depreciation $40,000 3. Rent $20,000 4. Legal and other expenses $130,000 Total $490,000 Number of games per year = 10,000,000 Average price per game = $2.5 Variable cost per game = $1.61 Fixed cost = $490,000 Break-even point = 560,562 games Financial management Financial statements The company’s projected financial statements for the first 3 years are shown below (Waymire, 2009); Ultimate Gaming Network Inc. Projected Income Statement For The Year 1 2 3 Sales Revenue $2,500,000 4,000,000 6,000,000 Cost of Sales $1,300,000 2,080,000 3,120,000 Gross Profit $1,200,000 1,920,000 2,880,000 Less expenses Sales and marketing $200,000 350,000 550,000 Utility bills $50,000 85,000 130,000 Salaries $300,000 500,000 750,000 Depreciation $40,000 60,000 85,000 Rent $20,000 $25,000 $40,000 Other expenses $190,000 $260,000 $365,000 Net Profit $400,000 $640,000 $960,000 Ultimate Gaming Network Inc. Projected Balance Sheet As at year 1 2 3 Cash $80,000 75,000 95,000 Accounts receivable $35,000 25,000 10,000 Prepaid expenses $20,000 10,000 15,000 Total current assets $135,000 105,000 120,000 Long-term assets Computer Equipment $50,000 70,000 100,000 Network Servers $15,000 35,000 50,000 W.A.N switches $10,000 15,000 20,000 Fixtures and fittings $80,000 120,000 160,000 Patents $20,000 20,000 20,000 Total Long-term assets $175,000 260,000 350,000 Total assets $310,000 365,000 470,000 Liabilities Accounts payable $10,000 15,000 20,000 Accrued expenses $5,000 - - Total current liabilities $15,000 15,000 20,000 Long-term liabilities Accounts payable $20,000 27,000 35,000 Loans payable $50,000 35,000 15,000 Total long-term liability $70,000 62,000 50,000 Total liabilities $85,000 77,000 70,000 Owner’s equity Retained Earnings $75,000 138,000 250,000 Common stock $150,000 150,000 150,000 Total owner’s equity $225,000 288,000 400,000 Total liabilities and owner’s equity $310,000 365,000 470,000 References: Dewhurst, J2016, An introduction to business and business planning, New York, John Willey & Sons. Brown, S2016, Business plan tool kit, Retrieved on 14th March 2016, from; http://sparceurope.org/wp-content/uploads/2016/01/BusinessPLAN_OAJournals_0116.pdf Lawrence, M2011, Business administration for students and managers, New York, Trafford publishing. Lynn, M2011, Segmenting and targeting your market: Strategies and limitations, Retrieved on 14th March 2017, from; http://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1238&context=articles Waymire, G2009, Exchange guidance is the fundamental demand for accounting, The Accounting Review, vol. 84, no. 1, pp. 53-62. Kraten, M2015, Business planning and entrepreneurship: An accounting approach, Oxford, Oxford University Press. Read More
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