MIDDLE EAST TECHNICAL UNIVERSITY

IE102 - INDUSTRIAL ENGINEERING ORIENTATION

FINAL
REPORT

ROYALE FLUSH

Burcu YÜZÜAK

Cem YOĞURTÇU

Görkem UYAR

Onur YILMAZ

May 2009, Ankara

 1. Contents

PAGE
1. Why We Choose This Type of Business? …………………………………… 3
2. Market Research……………………………………………………………… 4
2.1. Income and Expenditure Account …………………………………… 5
2.2. Break – Even Analyses ……………………………………………… 6
4. How to We Establish Our Business?………………………………………… 8
4.1. Working hours and management…………………………………….. 8
4.2. Mass production……………………………………………………… 9
4.3. Marketing for further projects………………………………………... 9
5. Advertising Policy…………………………………………………………….. 10
6. Key Features in our Business Plan…………………………………………... 11
7. Appendix………………………………………………………………………. 12
7.1 How to Play Alanya Castle Games?………………………………….. 12
7.2 Detailed Income and Expenditure Analysis…………………………... 13
7.2.1. Costs.……………………………………………………….. 13
7.2.2 Incomes.……………………………………………………... 15
8. References……………………………………………………………………... 16

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 1. Why We Choose This Type of Business?

We have two major aims in our project, creating a game based on Alanya castle: gaining
profit, as every company want and advertising Alanya, to attract more tourists. After our
investigations on game and toy industry we decided to create a PC video game as the project,
basically due to the market size of video games, consumer variety and the extend that we can
widen our product’s style depending on our success.

1.1. Market size:

We thought that our profit from our business will be in the extend of the business type that
we select. Video games industry seems us to be very profitable because video games industry is
really a big market with the aspects of hardware and software. According to DFC Intelligence
[1]
Online Game Market Forecasts the worldwide total game hardware & software sales are
estimated to $44 billion at the end of 2011 and the software part of this is estimated to $26 billion
at the end of 2010. And this is our first reason to choosing this business, the market size that
measured in billions.

1.2. Consumer variety:

The next reason is that wide variety of consumers of this sector. Many people’s approach
to toys is that they are for the children; therefore, it can said to be that if we choose to create a toy
we will probably address mostly children but this won’t be enough if we consider our aims.
Alternatively we can produce a good related to some hobbies but it would restrict our customer
profile because hobbies are related to personal interests and it is impossible to appeal too many of
them in one product. On the other hand video games have players from all ages, all over the
world and many different lifestyles.

1.3 Product diversity:

Our final major reason for choosing video games industry is the product variety. One can
start planning a simple PC game and find himself/herself designing an online game related to

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initial PC game. Also because technology is really involved in this industry the tools are
advanced too, as a result it is easy to do whatever you have imagined.

2. Market Research

Computer games market has always been a wide market. A lot of companies compete to
increase their share in the market and there are always some newcomers to the industry. There is
a harsh competition in the industry. Each company produces its own game but it is not guaranteed
that the game will make a success. Therefore, it is highly important to have market research
before producing games and jumping into competition.

PC games have always attracted many people. Even in the past, when PCs were not so
common, PC games were produced and sold. With the development of information technologies,
PC game industry developed too. In mid 90s, there were only a few companies producing
computer games such as Microsoft Games and Sierra Entertainment. However, in today’s world,
the situation is completely different. There are many companies producing PC games and the
number of them will surely increase in the future as well as the demand for PC games increases
since it could be seen from the Chart 1.

Chart 1 [2]

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 2.1. Income and Expenditure Account

Having so many alternatives, it is possible to find any kind of PC games for any price.
For example, one can buy a driving simulator game for 439.00 $ or he can even find games for
only 10 $ on amazon.com.[3] Being a newcomer to industry and considering the quality of our PC
game we can set our initial price for opening month as 5 YTL. This price can be more than 20
YTL after the getting sufficiently popular.

Detailed analyses for estimated costs and incomes can be found in Appendix (7.2 Detailed
Income and Expenditure Analysis)

Estimated Total Costs (Annual)

Before getting popular After getting sufficiently popular

Online 720 $ = 1008 TL Online Advertising 720 $ = 1008 TL

Advertising
Producing of CDs 35.000 x 1,3806= 48,300 Producing of CDs 50.000 x 1,3806=
TL 69,030 TL
Website 32 $ = 44,8 TL Website 32 $ = 44,8 TL
Building Rent[4] 12.000 TL Building Rent[4] 12.000 TL
Computers and 50.000 $ = 70.000 TL Computers and 70.000 $ = 98.000 TL
other technical other technical
equipment equipment
Staff 120.000 TL Staff 160.000 TL

TOTAL 251.352,8 TL TOTAL 340.352,8 TL

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Estimated Total Incomes (Annual)

Estimated incomes are calculated by considering:

Before getting popular After getting sufficiently popular

Price per unit: 5 TL Price per unit: 20 TL

Before getting popular After getting sufficiently popular

SALES INCOMES SALES INCOMES
Sales at airport (%2 of visitors) 150.000 Sales at airport (%3 of visitors)
TL 900.000 TL

Online Sales 1000 sales = 5.000 TL Online Sales 2000 sales = 40.000
TL
Sponsorships 2 companies= 50.000 TL Sponsorships 3 companies= 75.000
TL

TOTAL 205.000 TL TOTAL 1.115.000 TL

2.2. Break – Even Analyses

According to these analyses our product will compensate the capital approximately in 42
months; however, if we can meet our expectations about our popularity, this process will be
shortened to 14 months. Therefore, our aim is catch up the expectations that we made about
popularity as quick as we can by developing various marketing strategies

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 Before Getting Popular:

After Getting Popular:

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 4. How to We Establish Our Business?

After all the previous steps in our project are completed, we are planning to create a
licensed PC game. In order to do that we have to establish a computer software company
producing PC games. However, computer games business is really a challenging one. We need
experienced employees, some computer gaming technologies, equipments and financial sources
as much as possible.

As being a newcomer to industry, it is very risky to establish our company without

considering some examples. Valve Software, which company created famous PC game Half Life
and its expansions, can be a good example for us. There are 85 people in Valve project team
including software developers, artists, project managers, graphics designers, writers, manager
director, and other staff. These people work in teams. Every team has its own project and is
responsible for finishing their works at the time they are supposed to. In Valve Software, working
hours are flexible. Every employee chooses his own work hours and gets paid after his team’s
project is completed. Valve sells not only its PC Games but its computer game engines to other
software companies. [5]

Based on Valve’s style, we can establish our own company. We need a building with 50-
60 rooms. Two designers can share a room but everybody should have his or her own computer.
Managers and directors do not have to share their rooms. We can employ 50-60 software
engineers, designers, artists and writers as Valve does and we can pay them per projects they
finished.

4.1. Working hours and management:

Some programming codes can be very long and distracting. These types of codes are
created by a group of engineers. Sometimes they work together; sometimes they work on their
own. Some of them may need one of the other engineers’ codes to finish their works. That’s why;
regular working hours starting at 8 o’clock in the morning and ending at 5 o’clock in the evening
may result in loss of time. In order to minimize this wasted time, we can apply flexible working

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hours. Each group can be free in deciding when they can work. Every staff should give a daily
report to his or her group’s project managers and every group’s project manager should inform
general manager about the progress of the project weekly.

Since there are no specific working hours, payment for finished projects is more suitable
than payment for the time worked. This is the general payment trend of software companies. The
more projects the groups finishes, the more they get paid. The better games you create, the more
projects you get. Moreover, this kind of approach makes employers more concentrated into their
jobs and make them finish their duties as soon as possible.

Under these circumstances, a good estimation of completing time for our licensed PC
game can be 2 and a half months as we expected in our progress report.

4.2. Mass production:

After our licensed game is completed, we need to begin mass production of it. A good
copy of game can be made in 20 minutes with a high quality CD/DVD writer. Using at least 50
computers to do this, we can produce 150 copies in an hour and 3600 copies in a day. After
producing the game, we need to distribute retail stores. We are planning to sell our game in a
shop in Alanya Castle. In addition to selling it directly in a shop, our game can be sold online on
our website “www.alanyacastlegames.com” as many of the game companies do. People can order
their game on our website and we can ship their CDs in 3 days with a little shipping fee.

4.3. Marketing for further projects:

In some special times of the year such as New Year, we can make some arrangements on
the fee of our game to increase our sales. Although lowering the price of game or paying the
shipment can lower the profit level, we can sell much more products than we sold before in those
special times as everybody buys presents to their children, grandsons or other family members.
We can also continue giving prizes for high scores as we did for our expansion packs before. This
can make people play our game more and more.

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 5. Advertising
Policy

Our advertisement
policy is mainly based on
online activities, because
we think that internet has
the widest opportunities to
advertisement and marketing with low costs. As a result our website is the main part of our
advertisement. Also advertisements can be extended to social networks and during the further
steps of our project we might use real markets rather than online ones.

Website: Because our website is the backbone of our advertisement and marketing
policy, it is more than a simple presentation instrument. At home page, we inform visitors about
our main purpose and let them donate us. Also there are links that allows these visitors to
download our game or order CD of it or to share their scores during competitions. In addition out
website contributes to one of our aims, advertising Alanya; there is a brief information about
Alanya, too. Moreover, in case they want to contact with us players can use “contact” to reach us.

Social networks: Social networks are one of the means of advertisement for us, because
today many people spending a lot of time wondering between profiles, applications and such
parts of these networks. If we can attract people’s attention while their wondering it would be a
good opportunity to inform them about our business and sell our product. As a result, considering
the popularity of some social networks, we decided on starting with Facebook. We have opened a
fanpage and send invitations to users.

Stands and stores: After we begin to produce our own PC game we are also considering
enlarging our market to stores and stands. We will allocate money for the rents of stands at some

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convenient places such as airport due to our interviews. In addition, if the demand is sufficient to
widen our business to stores, we will set a plan to production and logistics management.

6. Key Features in our Business Plan

Briefly our company’s establishment plan consists of these following steps:

 Choosing strategy in video game genres: By considering both popularity of our game
and the presentation of Alanya, strategy games would probably the most appropriate type
of games for our production. Using as much historical and visual information as in
campaign or scenarios of strategy games is one of the best ways to show players beauties
and interesting historical background of Alanya.

 Starting with expansion packs: This provides us not only profit from our product but
also make known it, with the lowest costs.

 Mainly using online advertisement instruments: This also provides lower costs. On the
other hand Internet is a world wide area of advertising. We can use TV commercials but
its impact would be limited in national, by the way online advertising is international. In
addition we are planning to use Facebook which is one of the most crowded social
networks, to spread our products name with fanpages.

 Webpage and Facebook fanpage: We will be receiving donations from our webpage.
Also there is an “order CD” link to increase our game’s accessibility.

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7. Appendix

7.1 How to Play Alanya Castle Games?

To begin with, both Age of Empires and Empire Earth are real time strategy games. In
real time strategy games, sides do not wait for their turn to act since the games are not turn-based.
Age of Empires can be said the most well-known example of real time strategy games. Age of
Empires II was created by Microsoft Games in 1999 after the first game was sold more than
expected. The designers knew that the second game would be successful too and they were right.
Age of Empires II has been very popular for ten years and sold over 2 million copies. In 2000,
Microsoft Games created an expansion pack called Conquerors involving some new civilizations
and units. The expansion pack also sold lots of copies and many players said that the Conquerors
were their favourite real time strategy game such as mentioned in a review of Moby Games[6]
(Maw, 2007). After the success of Age of Empires games, many software companies created real
time strategies. Every new game came out some new concepts but few of them were successful
like Age of Empires Series. Empire Earth was another of these successful games. Player liked
first Empire Earth game since it had 15 epochs which was 4 times of AoE had. Artificial
Intelligence of the game was also better than the other games. However, the later versions of
game such as Empire Earth II and III could not be successful when compared to original game.
Players are still playing first Empire Earth game instead of newer versions.

A scene from Empire Earth Campaign: A scene from Age of Empires Alanya Castle
producing food Campaign: Beat the enemies!

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 In both games, player controls one nation. The main goal of the games is to defeat all of
the enemies. In order to do that, player has to establish a base, produce food, and collect wood
and gold. After that, player should create an army to defeat the enemy by using these resources
wisely as well as considering special technologies of his own nation and the enemy’s. Quick
decision making and a wise strategy is the keys to get the victory. It is very easy to get used to
game environment after playing three or four times.

Being the most well-known real time strategy games, Age of Empires and Empire Earth
are almost played in all countries. Players can create their own campaigns with the help of map
editors in games. In our Alanya Castle Campaigns, we integrated history into games. Player
controls Turks and tries to conquer Alanya Castle which is owned by Byzantinians. Collecting
resources, using them to build a strong army and conquering the castle is the main purpose of the
player. After he conquers the castle, player also has to defend it against Byzantinians. After three
scenarios are completed, our campaigns end with the victory of Turks. Beat Byzantinians and
have fun!

7.2 Detailed Income and Expenditure Analysis

7.2.1. Costs:

Cost estimation of advertising on Facebook and Google Adwords:

Advertisement Approximate Approximate Approximate TOTAL

Source Cost Per Click Click Per Day Monthly Cost
Facebook 0,01 $ 100 30 $
60 $ (monthly)
Google Adwords 0,01 $ 100 30 $

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 Cost estimation for CD’s of the game:

Name of Product Cost Cost Per Unit Source

Compact Disc 38.11 TL 0,3811 TL mavibilgisayar.com
CD Box 49.90 TL 0,2495 TL teknodijital.com
CD Cover 0,75 TL 0,75 TL TeknoArt
TOTAL 163,01 TL 1,3806 TL

Cost estimation for publishing webpage (annual):

Name of Product Cost Per Year Source

Small Web Hosting Package 22.00 $ + 4.40 $ natro.com
Domain Name 3.99 $+ 0.798 $ natro.com
TOTAL 31.188 $

Cost estimation for a building with 50-60 rooms:

Building Monthly Rent

50-60 rooms 12.000- 15.000 YTL [22]

Cost estimation for the computers and equipment will be used in producing:

Unit Price Cost

100 500-700 $ 50.000 – 70.000 $

Cost estimation for the employers (based on paying for projects)

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Staff Fee
60-80 2000 $ 120.000 – 160.000 YTL

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 7.2.2 Incomes:

Nearly 2 million tourists come to Alanya every year. About 1.5 million of them are
foreigners. We can sell our games to these people by considering different and small ratios who
could be our potential consumers.

Table of estimated sales in airport to visitors:

%1 of visitors % 2 of visitors %3 of visitors
= ≈ 15.000 sales = ≈ 30.000 sales = ≈ 45.000 sales
= ≈ 75.000 YTL 150.000 YTL 225.000 YTL

We can expect to sell around 1000-2000 copies our game online with a good advertising
campaign.

Table of estimated online sales:

Estimated Sale At least 1000 copies At most 2000 copies
Estimated Income 5.000 TL 10.000 TL

We are planning to find some local companies to be our sponsors:

Table of estimated sponsorship incomes:

Sponsorship Income (Annual)
1 Company 25.000 YTL
2 Companies 50.000 YTL
3 Companies 75.000 YTL

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8. References
[1]
http://www.dfcint.com/news/prsep222004.html
http://www.dfcint.com/news/prjune2005.html

[2]
http://vgsales.wikia.com/wiki/Video_game_industry

[3]
http://www.amazon.com/s/qid=1242753859/ref=sr_pg_2?ie=UTF8&rs=12508701&sort=-
price&bbn=12508701&rh=n:468642,n:!11846801,n:229575,n:12508701&page=2

[4]
http://www.hurriyetemlak.com/real_estate/shop/advertise_detail.php?ad_id=2717107

[5]

http://www.valvesoftware.com/

[6]

Maw. 2007. Review of Age of Empires II: The Age of Kings

http://www.mobygames.com/game/windows/age-of-empires-ii-the-age-of-
kings/reviews/reviewerId,49554/

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