game planet
DESCRIPTION
A story based cyber gaming zone.TRANSCRIPT
GAME PLANET: STORE BASED GAMING ZONE
Presented by: Hassan Mahmood
Executive Summary:
• Game Planet aims to become the leader in the game zone industry of Pakistan
• Prime location - Hafeez Center, Gulberg, Lahore
• Will be positioned as a social environment• Variety of services• Products for sale, customer support,
tournaments, etc.
Outline:
Chapter 1: Game PlanetChapter 2: Market ResearchChapter 3: Operational PlanChapter 4: Financial Plan
Chapter 1:
Game Planet
General Company Description:
• Vision:– To set a new benchmark of excellence in the gaming
industry of Pakistan– Give gamers a way to test their skill by competing
against others and to meet others who share a passion for gaming
• Mission:– To provide gamers with a unique atmosphere to
develop their talents for gaming – Our gamers represent Pakistan in the World Cyber
Games
Project Profile:• Objective – To open store based Gaming Zone at
Lahore• Offer complete package of LAN gaming facilities
for gamers• Provide video game retail store and customers
service• The main features of the project – latest technology, a clean environment, outstanding
sitting arrangements, refreshments and other basic entertainment facilities
Industrial Overview:
• Overview:• LAN gaming
industry increasing rapidly– Technological
advancements– Video game
industry is falling behind
• Pakistan Gaming Zone Industry Structure:– Boom in the IT sector– Increased internet penetration– Awareness in youth– Less development in outdoor
sports and other entertainment media
– Broadband service providers in Pakistan
Industry Analysis:
Threat of Substitute productsIntensity of Competitive RivalryThreat of new entrantsPotential Barriers of Growth
SWOT Analysis:Strengths
Easily accessible location Snacks and drinks Large seating capacity Most popular games Low prices Latest computers Discount packages Generator available for back-up
Weaknesses Single branch in Lahore Separate rooms not available for
tournaments New staff without a lot of experience
Opportunities New attraction Introduction of newer games Expansion of branches Product and services expansion Marketing to gain more customers
Threats Closeness of competitor Difficult to attract loyal customers Various substitutes available Rapid changes in technology
Key Success Factors in the Industry:
LocationMarketingProductsTrained PersonnelUp-to-date EquipmentQuality Services
Business Plan:
• To develop business plan these points must be taken into consideration:– Customer Segmentation– Product Innovation– Pricing Strategy
• Other points– Required equipment, financial
information and marketing plan
Chapter 2:
Market Research
Research Objectives:
To determine demographics of customers for the gaming zone
To analyze interest level in our company To study the features of gaming zones
which are most important for customers To study customer preferences with
respect to PC gaming To determine how likely and how often
our service will be used by customers
Sampling:• Target population– Residents of Lahore, Pakistan
• Sampling unit– Sampling unit is the individual consumer
• Sample size– 120 consumers; We distributed the questionnaire to
respondents who were aware of gaming zones • Sampling method– Sample was selected by using the convenience
sampling method
Questionnaire:
• Consisted of 13 questions total– First four questions were about
customer demographics – The next questions judged the interest of
the respondents in the business– Remaining questions asked about the
features that were important to the respondents in terms of gaming
• Hope to get an idea of consumers’ interests
Results: Questions 1 – 4:
• Demographics:–Gender, age, education, income
• Gender – 90% of respondents were male• Age – 71% between ages of 20 to 35• Education – 33% completed graduation and
57% completed masters• Income – 44% of respondents make between
Rs. 15,000 to Rs. 25,000 per month
Results: Questions 5 and 6:
• Q. 5: Overall interest in product
• Q. 6: Who would you take with you to use such a product?
Results: Question 7:
Importance of Factors for Gaming
Zone
“Very important + important” “Neutral”
“Somewhat important + Not at
all important”
Brand Image 20% 53% 27%
Quality 94% 6% 0%
Features/Offerings 71% 14% 15%
Customer Support 92% 8% 0%
Price 85% 0% 13%
Convenience 78% 19% 3%
Results: Question 8:
Features Important for Gaming
“Very important + important”
“Neutral”“Somewhat
important + Not at all important”
Graphics 96% 4% 0%
Sound Quality 92% 6% 3%
Monitor/Display 93% 4% 3%
Processor 85% 11% 5%
Game Being Played 85% 11% 5%
Results: Question 9:
•27% interested in action games•24% interested in multi-player games•22% interested in strategy games
Results: Questions 10 and 11:
• Q. 10: How probable is it that you would use a service like ours in the future?
• Q. 11: How often do you think you would use this service?
Results: Question 12:
•50% would like to hear about the business through the internet•20% would like to hear about it through a colleague or friend
Results: Question 13:
• 34% are very likely to recommend our business to others• 46% are
moderately likely to recommend our business to others
Analysis of Results:
• Demographics• 90% males make up majority of gamers• 20-35, younger age group• College or univerity students - have a good
knowledge of computers and technology• Income Rs. 15,000 to Rs. 25,000 per month - have
money to spend on leisure activities• Interest level in gaming zones is high• Popular place for hangout with friends
Analysis of Results:
• Most important features for gaming zones• Quality, Customer Support, Price• Bring quality service to customers at low prices
• Most important features for gaming• Graphics, Monitor/Display, Sound Quality• Use latest technology to attract gamers
• Promote business through the internet• New attraction for gamers
Target Market:Demographics:
AgeGenderIncomeOccupationEducation
20-35 as market segmentMaleRs.15,000 - 25,000College and University studentsGraduate and Masters
Psychographics:
Social ClassLife-Style
Personality
Middle and Upper classSocial, Well-rounded, Food Lover, Have money to spend on entertainmentExtrovert
Marketing Mix: Products:
25 computers for LAN gamingNew variety of PC gamesConsole games (X-Box, PSP III, PSP
II)Gaming gars & equipmentGaming tournamentsInternet facilityClothing (Game t-shirts, etc.)
Marketing Mix: Services:
Refreshment services (fast food, soft drinks, etc.)
Customer support servicesOnsite internet ordersHardware and software live
demonstrationsAnnual Game FunctionsNew game release discount Customer Appreciation DaysDisc RepairWi-Fi access
Marketing Mix: Price:
• Pricing Objectives:–Profit Minimization–Sales Maximization–Gain Market Share
• Competitive Pricing Strategies:–Penetration Pricing–Price-Undercutting
Marketing Mix: Place:
• 44% felt that convenience was an important factor to attract them to the gaming zone
• Hafeez Center, Gulburg, Lahore– Visible to the constant flow of traffic
travelling from main road– Easy access from the surrounding
schools, colleges and universities – Spacious parking arrangement
Marketing Mix: Promotion:
• Consumer Demographics– Develop products for target market
• Advertising strategy– Promotion through media– Grass root marketing– Local business partnerships
• Promotional BudgetOne year (5 in x 5 in) color advertising banners Rs. 200,000/
1,000 business cards Rs. 1,000/ 70-100 t-shirts Rs. 25,000/
Flyers and posters Rs. 24,000/26 weeks Radio Advertisement Rs. 70,000/
Gaming Events Rs. 80,000/Budget Total: Rs. 400,000/
Chapter 3:
Operational Plan
Project Requirements: Appropriate space Human Resources Game Stations Computers Support Equipment Air Conditioners Telephone/fax An Electric Generator Basic Utilities Budget for Equipment: Rs. 2,266,000
Human Resources:
• HRM team will consists of 10 employees– 2 accountants managers – Will have control
over the major business functions in both aspects: the retail store and the gaming zone
– 2 network administrators, 2 office boy, 2Guards,2 Sweepers.
• Other employees– Skilled employees will be given preference– Unskilled employees will receive training
HRM Task Duties:
• Networking Administrators:– Keep an eye on LAN Gaming
Affairs– Maintain Networking
through PCs– Installing Software and
Games• Office Boys:– To serve the Staff and
Gamers– Education: Matriculation
• Sweepers:– For cleaning the
area– Experience: None
required• Guards:– For security
reasons – Age: 30 +– Retired Army
Men
Chapter 4:
Financial Plan
Finances:• The total project cost for setting up
this gaming zone is estimated at Rs. 119,116,000
• The project is financed through 50% debt and 50% equity (Assumed)
• The project NPV is around Rs. 6,674,858
• Payback period is one year
Working of Long-Term Debt:
Working of Long-Term Debt
Installments Interest Principle Amount Cash Price
59,558,000
21,440,880 9,529,280 11,911,600 (11,911,600)
47,646,400
19,535,024 7,623,424 11,911,600 (11,911,600)
35,734,800
17,629,168 5,717,568 11,911,600 (11,911,600)
23,823,200
15,723,312 3,811,712 11,911,600 (11,911,600)
11,911,600
13,817,456 1,905,856 11,911,600 (11,911,600)
0
Space, Infrastructure and Utilities Requirements:
Space Requirement
Description Area Required Estimated Cost (Rs.)
Gaming Zone Space
3,000 sq. ft. 40,000,000
Total 40,000,000
Utilities Expenses
Electricity Expense 200,000*12=2,400,000
Gas Expense 50,000
Diesel Expense 1,000,000
Water Expense 12,000
Infrastructure Requirement Rs. 15,000,000
Project Economics:
Project Economics
Description Project
IRR 19%
Payback Period Period (Yrs)
4 year
Net Present Value (NPV) 6,674,858
Project Financing
Description Percentage Amount in Rs.
Equity Financing 50% 59,558,000
Debt Financing 50% 59,558,000
Total 119,116,000
Financial Assumptions:
Project Life (Years)
5
Debt 50%
Interest rate on long-term debt
16%
Interest on cash in bank
10%
Debt tenure (Years)
5
Debt payments per year
1
Minimum Cash Balance
1,000,000
Travelling expense (% Rise per year)
5%
Communication expense (% Rise per year)
10%
Freight charges (% Rise per year)
10%
Promotional expense (% Rise per year)
5%
Insurance expense (% of cost of machinery/vehicle)
5%
Depreciation Expense
Building 5%
Machinery and Equipment
10%
Furniture and Fixture 10%
Vehicles 20%
Economy and Operating Assumptions:
Economy Assumptions
Electricity growth rate 15%
Diesel expense growth rate 10%
Wage growth rate 10%
Machine maintenance growth rate 5%
Office vehicles price growth rate 10%
Hardware price growth rate 10%
Transportation/Travelling expense growth rate 10%
Insurance rate 5%
Machine maintenance expense (% of machine cost) 2%
Operating Assumptions
Days operational per year 300
Hours per shift 12
Capacity growth rate 10%
Shifts operational per day 2
Depreciation Expense:
Depreciation Expense Year 1 Year 2 Year 3 Year 4 Year 5
Building5% 15,000,000 750,000 750,000 750,000 750,000 750,000
Machinery, Furniture and Fixture 10% 2,166,000 216,600 216,600 216,600 216,600 216,600
Vehicles 20% 1,500,000 300,000 300,000 300,000 300,000 300,000
Total 18,666,000 1,266,600 1,266,600 1,266,600 1,266,600 1,266,600
Gaming Sales:
Peak time:6:00pm to 6:00 am
Off time:6:00 am to 6:00 pm
No. of PCs in Use
Hours Spent
Price per Hour
Revenue(Rs.)
Peak Time
25 12 70 21,000
Off Time
15 12 70 12,600
12,096,000
Average Daily Sales
Sales of Gaming Consoles
50,000
Sales of DVD and software
2,000
Sales of Gaming PCs
40,000
Sales of Gaming Laptops
80,000
Sales of Gaming Accessories
15,000
Sales of Gaming Clothes
3,000
Per day Revenue
Average per year revenue
Total Revenue 223,600 67,080,000
Income Statement:% Rise Year 1 Year 2 Year 3 Year 4 Year 5
Revenues10% 67,080,000 73,788,000 81,166,800 89,283,480 98,211,828
Less Costs
Total Costs61,116,600 67,131,000 73,760,100 81,067,818 89,124,855
NPBT 5,963,400 6,657,000 7,406,700 8,215,662 9,086,973
Add : interest Income
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
zardari tax 21% 1,462,314 1,607,970 1,765,407 1,935,289 2,118,264
Net Profit After Tax
5,501,086 6,049,030 6,641,293 7,280,373 7,968,709
Projected Balance Sheet: Assets:
Assets
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Total Current Assets
60,300,000 60,250,000 65,200,000 70,650,000 76,650,000 83,255,000
Total Fixed Assets
58,766,000 56,816,000 56,066,000 55,316,000 54,566,000 53,816,000
Total Intangible Assets
50,000 40,000 30,000 20,000 10,000 0
Total Assets
119,116,000 117,106,000 121,296,000 125,986,000 131,226,000 137,071,000
Projected Balance Sheet: Liabilities & Shareholders' Equity
Liabilities and Shareholders’ EquityYear 0 Year 1 Year 2 Year 3 Year 4 Year 5
Total Current Liabilities
0 0 0 0 0 0
Long-term Liabilities
Long term debt (Project Loan)
59,558,000 47,646,400 35,734,800 23,823,200 11,911,600 0
Shareholders' EquityPaid-up capital 59,558,000 59,558,000 59,558,000 59,558,000 59,558,000 59,558,000
Retained earnings
0 9,901,600 26,003,200 42,604,800 59,756,400 77,513,000
Total Equity 59,558,000 69,459,600 85,561,200 102,162,800 119,314,400 137,071,000
TOTAL CAPITAL AND LIABILITIES
119,116,000 117,106,000 121,296,000 125,986,000 131,226,000 137,071,000
Cash Flow Statement:
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5Operating activities
Net profit - 5,501,086 6,049,030 6,641,293 7,280,373 7,968,709Add: depreciation expense - 1,266,600 1,266,600 1,266,600 1,266,600 1,266,600Advance insurance premium (300,000) -250,000 -200,000 -150,000 -100,000 -50,000Other liabilities - Cash provided by operations (300,000) 6,517,686 7,115,630 7,757,893 8,446,973 9,185,309
Cash Flow Statement:Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Financing activities
Change in long term debt
59,558,000 11,911,600 11,911,600 11,911,600 11,911,600 11,911,600
Equity 59,558,000 - - - - -
Cash flow from financing activities
119,116,000 11,911,600 11,911,600 11,911,600 11,911,600 11,911,600
Investing activities
Capital expenditure
108,816,000 0 0 0 0 0
Cash flow from investing activities
(108,816,000) 0 0 0 0 0
NET CASH 10,000,000 18,429,286 19,027,230 19,669,493 20,358,573 21,096,909
Conclusion: Total project cost estimated at Rs. 119,116,000 The project is financed through 50% debt and 50% equity
(Assumed) The project NPV is around Rs. 6,674,858, and a payback
period of one year Believe there is chance of success for gaming zone
Goal is to become a leader in the online gaming industry of Pakistan Bring innovative products and services to customers
Have established target market of Lahore and found prime location
Game Planet is a justified business venture that will yield returns in the long-run
Any Questions?
Enjoy Gaming at Game Planet Gaming Zone
Hafeez Center, Gulberg, LahoreInfo: + 92 – 333-4948186
ThanK YoU FoR Not Booing or
Throwing Tomatoes