Business Plan on Game Development
Creating a business plan on game development is crucial for securing funding, attracting talent, and guiding the company’s growth. Here’s a comprehensive outline and assessment for a game development business plan.
Entrepreneurship refers to the capability of someone to develop his or her own business, operate the business by him or her considering the risk and uncertainty. This approach makes profit for him for survival and arranges jobs for others. Entrepreneurship is not easy to develop in human. It inherits in someone or needs perseverance to develop it and be the successful entrepreneurs (Skripak, 2011). Recently students and youth are moving towards to develop their own business due to the uncertainties of jobs, self-respect and relish their free time. Therefore I aspire to be an entrepreneur in my preference sector. I am a tech freak person and so I want to start up my own business on technology. I am interested in games development and so I am taking necessary preparation to start up my business in games development. This report is all about the reasons behind start up, the competitors, the products of my business and many more.
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There are numerous reasons to start a new business by oneself. For instances, perhaps the jobs haunt people, some people aspire to be their own boss or want to be entrepreneurs and some are creative and are not likely to work into boundary and many more (Urevig, 2015). Whatever the reasons are, start up business is really something exciting and its success is all about the passion, dedication, perseverance and hard work (Urevig, 2015). Initially the journey is difficult and the entrepreneurs have to go through very thorny path. You cannot run a business successfully without a viable analysis of the business. I am an IT freak person and I had been dreaming since teenage to be an entrepreneur. For this reason I chose this making games which is a technology based business to realize my dream.
- The vision of my business is to reach the services of the business to all the tech oriented users and provide them the best services through innovation and customization.
- This business is also going to be established in order to inn ovate the tech resources and satisfy the users’ requirement.
- The purpose of this business is also going to bring all under the usage of technology.
- The mission is to build a respected and strong brand globally with the association of sustainable corporate strategy.
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Review of the Industry
External environment refers to the cluster of factors that are happened outside the company and affects the operation of business greatly anyhow. It is considered uncontrollable factors and the elements of this environment are economy, government rules and regulations, law, judiciary system, political condition, society and so on. This external environment is divided into two parts and these are micro and macro environment. Micro environment factors are those factors such as customers, financiers, suppliers, marketing intermediaries and public which directly affect the operation of business while the macro environment includes those factors such as political, social, economic, technological, legal and environmental which affect the operation of business indirectly (Mason, 2017). This macro environment factors are known as PESTEL analysis as well. The PESTEL analysis is done to check the viability of my start up business as follows:
Political: Political factors are crucial factor in the business environment to run the business operation smoothly and it has the ability to affect the business in the long run to a certain market place. A company or start-up has to go through many risky political situations (Turkay and Şengül, 2011). The main achievement of any business lies in diversifying the systematic risks arising out of political environment. I need to evaluate following factors cautiously before investing into this tech based industry:
- Political stability as well as the significance of the Information Technology in the country and its economy.
- The degree of corruption in this segment
- Interference of government in IT service industry
- Trade rules and regulations and tariff related issues to IT
- Wage regulations and benefits
- Industrial safety rules in IT
- Governmental support in automation
- International trade opportunity in IT
Economic: This start-up has to consider about the economic factors for instance, inflation rate, consumer spending, growth rate, economic indicators and many more for the growth opportunity of the start-up (Ferguson, 2017). The business also should consider the other criteria as follows:
- Pricing system and the kind of economic system in the operating country
- Tax rate to operate the business
- Exchange and interest rate
- The available financial institutions for necessary financial support
- Competitive advantage
- Consumers’ disposable income (Ferguson, 2017)
- Economic stability
Social: Society’s culture greatly affects the start-up business. The attitude and buying behaviour for IT and technology play a significant role in business. The first thing that an entrepreneur requires understands the clients’ preferences and their needs and demand (Turkay and Şengül, 2011). The things also need to be understood are given below:
- Demographic factors
- Social class structure and educational level
- Attitudes and behaviour
- Entrepreneurial behaviour and spirit
- Stable attitudes for leisure activities
- Rise of cultural diversity
- Rise of demand to provide high quality clients service
Technological: a company or start up should analysis about the technology and at which speed it disturbs the industry. Here slow speed may provide more time to sustain whilst fast speed does the otherwise (Ferguson, 2017). The start-up needs to analyse the below impacts:
- Recent technological innovation and developments by the competitors
- The impact of technology
- Buying pattern for technology and IT resources
- The degree of automation in technology (Ferguson, 2017)
- The scenario of adaptation in technology
Environmental: A start-up requires know the environmental factors that may affect the business. It should be evaluated properly and thus the factors need to keep in mind are as follows:
- Climate and Weather issues
- Laws about the environment pollution in IT service industry
- Waste administration in Technology sector (Turkay and Şengül, 2011)
- Ecological or green products
- Demand for sustainable business
- Rise of recycled materials.
Legal: at present the world is struggling to introduce new laws to protect technological rights and intellectual property rights. Thus the start-up business also needs to consider this issue as well. Those are:
- Copy right, intellectual property law or patents
- E-commerce and Consumer protection
- Health and safety law
- Data protection law
- The regulations about how to dispose the electronic waste (Ferguson, 2017)
- Regulations regarding energy consumption
The macro-environment for this start-up is advantageous considering the overall scenario. However, the major threat for this start up is intense competition of the giants company worldwide.
Review of market of game business
Games have been so popular and it has been dominating the industry for decades virtually. All people regardless of gender, age, and income are attracted to many kinds of virtual games such as clash of clan, Ludostar, word games, vice city and so on. The demand and playing of virtual games has been drastically raised due to the pandemic “Covid-19” and unavailability of the place and time to play. The demand of playing virtual games is increasing by leaps and bounds due to the usage of smartphones, availability and free of payment. It is predicted that the market is likely to be increased hugely due to the addiction to the virtual games.
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Many small, large companies are running several technology based businesses in the United Kingdom. The competitors in this sector are gradually increasing due to the demand around the world. Few games companies have been holding higher market share. Though a new tech freak entrepreneurs are indulging themselves in this business. The main competitors dominating this sector majorly are given below:
- Nintedo: It is the largest and renowned multinational electronics company and it is developing numerous games alongside situated in Japan in 1889. It is generating highest revenue through developing games. Some examples of games are nintedo DS, Game boy advance, the legend of Zelba, Kirby, Mario and many more (Christopher, 2021).
- Sony Interactive Entertainment: It is a conglomerate company of Sony Corporation situated in Japan. It is known as multinational game company founded in 1993 in Tokyo. It has headquarter in California, US and it generates huge revenue by selling their products and services around the globe every year. Their products are PlayStation version of PS1, PSX, PS4, Pocket station and many more (Christopher, 2021).
Other than these Sony interactive entertainment and Nintedo, many well known and unknown games development companies are operating their business in this sector. They are-
- Activision Blizzard
- Epic games
- Bungie Inc.
- Square Enix etc.
Competitive advantage refers to the building a system or products or services which have an exceptional advantage that a customer cannot find in other products (Barney and Hesterly, 2015). A company may find their competitive advantage through differentiation in products and pricing. Competitive advantage is regarded as strength factor for a company. The competitive advantage my product will offer as follows:
- Our games are available in social media, playstore at free of payment for the first 100 stages.
- It is a learning game and so the users get to learn many things playing these games.
- It is easy to operate.
- It takes less storage in smartphones.
- It can be used in low processor as well.
- It consumes less charge in mobile or laptop.
- We are conducting unique and extensive advertisements of my products.
- We have already experimented our games giving to the users at free of cost before launching the games at large. As a result we got huge response and positive excitement. Thus we believe this product will do huge business.
- The demand of such games is increasing widely at large.
- Initially there is no subscription charge and later the subscription charge is entitled to the products is very low and within the reach of student budget.
- The designs, characters, costumes, props and so on are very attracting and appealing.
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Market segmentation refers to the division where the whole market is partitioned based on sexual orientation, age, income, lifestyle, and so on and so forth (Dolnicar and Bettina, 2018). The market segmentation we used for our business is given below:
- Demography: It refers to the factors including age, sexual orientation, income and other issues. We separated our market based on age and sexual orientation (Dolnicar and Bettina, 2018). For instance, we developed separate games for male and female respectively and also based on age.
- Geography: It refers to the location such as urban, international, rural etc. We like to distribute our products at home and abroad.
- Behavior: It refers to the lifestyles, perception and psychology (Dolnicar and Bettina, 2018). We are creating our products considering our target market’s choice, their psychology and behaviors.
We are targeting youth, adolescent, and children mainly for developing our gaming business. These target groups are regardless of gender and social class and so on. To attain the desired the target groups we are investing on advertisement hugely. Therefore we hope that we will be able to focus right target market for our business and we will be able to generate enough profit to sustain in the market (Keller and Kotler, 1967).
We ran a small survey to find out the estimate market that is eager to take our services, the probable customers to use our games and already taking our services. It shows that already 55% of people are attracted to games mostly and 15% are started to use different types of learning games. This segment is largely increasing around the globe. Moreover, Dolnicar and Bettina (2018) showed that games development companies are earning almost 52 Billion USD across the world.
The key customers of our products are game lovers. Generally the smartphone users are prime target market. Among these game lovers we are mostly trying to capture children, adolescent and youth. At present the youth and adolescent customers get the smartphones from their parents due to the availability and stubbornness of their children (Ramya N. and Ali, 2016). Conversely, parents give their phones to their children to keep their children silent and make them busy with the smartphones.
There are several reasons that the target customers will purchase our products as follows:
- The availability of smartphones in the market (Ramya N. and Ali, 2016)
- Raising powerful networks such as 5G.
- Cloud centered infrastructure is increasing
- Easy acquisition of games
- Low subscription cost or free of cost (Ramya N. and Ali, 2016).
Marketing strategy refers to the long term and overall business strategy of any company to attain the primary and secondary goals and create a sustainable business company through understanding customers’ demand and requirements (Kotler and Cao, 2020). Marketing mix is one of the significant elements in the company to consider. Marketing mix includes price, products, process, place, promotion, physical evidence and people. This marketing strategy is explained in a nutshell below:
Product: It is the major requirement in a business (Kotler and Cao, 2020). Ours major products to offer to our customers is various types of games. Our products include
- Action games,
- Thrilling games,
- Fashion games,
- Home décor games
- Archery games
- Gun games etc.
Price: Price is the value of a product or service that a customer will pay to use the service or product (Kotler and Cao, 2020). There are several types of pricing strategy available in the market. We will initially provide the products or services with free of cost. Later we will cost very low for our services and the games after completing a certain stage of a game. We will use discount pricing.
Place: It refers to the regions where the games will be available to use or buy. The customers will get their products from online and for access the games they need to install apps into their smartphones.
Promotion: It includes online advertisements, sales promotions, direct selling and so on. We will use online advertisements and social media influencers to promote, inform and attract to our gaming products.
People: Initially my two friends together with me will start our business. We will be in charge to develop the games and observe the market. We will hire 2 persons to advertise our products at online and offline. In total we will be 5 people to work together.
Process: We will deliver our services through online platform such social media, play stores and so on.
Physical evidence: Primarily we will not consider any physical office to set up our business and advertise our products. Rather we will use computer and other electronic infrastructure to develop our business.
It is an important strategy to evaluate the market and expand the market size. This growth strategy includes the future outline of action that helps the firm increase the operation and grabs more new market and its share (Treacy and Sims, 2016). Ours growth strategy is given below:
- Expand to youth and senior citizens: Initially we will introduce our products to children and later we will expand the market to the youth, adolescent and the senior citizens of the country.
- Expand the market to different countries: We are currently focusing London and around the UK. We wish to expand the market to different countries as well.
- Diversification: We will later focus on creating new types of games according to the customers’ preferences and demand (Treacy and Sims, 2016).
Finance is crucial element to start any new business or to operate the established business. We also need some finance to start our business and thus the sources of this finance are-
- Self-savings (Wu, 2018)
- Loan with interest free from kith and kin
- Loan with low interest from Financial institutions
- Student loan (Wu, 2018)
We also need some resources to develop our games and perform our activities efficiently. Those are as follows:
- Financial resources: It contains cash or monetary value to develop and run the daily actions of the business and to buy infrastructure (Segel, 2019).
- Technological resources: It contains Internet connection routers, Wi-Fi, website to launch the games, application etc (Segel, 2019).
- Physical resources: It contains computers, hardware, and furniture and so on (Segel, 2019).
Risk is an unavoidable factor in any business and so entrepreneurs must consider this factor seriously to minimize the risk so that they could earn profit and sustain in the market. The possible risks those are associated with our business are-
- Loss of capital: If the capital is not utilized properly and not spent wisely, the entrepreneurs might not be able to create this business (Johnson, 2016).
- Inefficient marketing campaign: It is one of the risky factors. If the company is failed to promote their products properly and adopted inefficient approach to promote and inform of the products the business can be nipped in the bud (Johnson, 2016).
- Huge competition: The Company should understand their competitors and look closely at their actions (Johnson, 2016). For this huge competition might lead the company into the danger.
Recently graduate students like to start their own business so that they could implement their ideas and thoughts into their business. They want to aspire to change the whole economy and perceptions of today’s business (Skripak, 2011). They are developing unique ideas to make the world a better place to live in. to make a successful business an entrepreneur requires going through a rigorous research, feasibility analysis, financing sources and many more analysis. This report presents my whole analysis on my start up and the outcome of the analysis.
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