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TABLE OF CONTENT

N TOPIC PAGES
O
1 INTRODUCTION OF THE CASE 1

2 BACKGROUND OF THE COMPANY 2

3 SUMMARY OF THE CASE 3-4

4 ISSUE OR PROBLEM OF THE CASE 5-7

5 APPLICANTION OF ANALYSIS TOOL 8 - 13

6 ANSWER THE APPLICATION QUESTIONS

a) Prepare a master budget. Should CVSB set up The Gaming Hub at
the identified location of The Strand, Kota Damansara, with the
capital expenditure of RM350,000? Should CVSB offer all the
services of the six types of rooms planned?
b) What would be expected payback period for this investment? 14 - 22
c) Prepare a breakeven analysis, What would be the ideal
occupancy rate to ensure profitability?
d) If The Gaming Hub achieved the projected financials as stated in
the master budget, should Farid recommend opening a second
branch?

7 RECOMMENDATIONS 23 - 24

8 CONCLUSION 25 - 26

9 REFERENCES 27

10 APPENDIX 28
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1.0 INTRODUCTION OF THE CASE

The case study of Creative Venture Sdn Bhd (CVSB) is a case related to master budget, a
breakeven analysis and a growth plan. This case is one of the case studies that need to examine
by student. Creative Venture Sdn Bhd (CVSB) is located in Kuala Lumpur. It is a company that
produces e-games. As these e-games have entered the mainstream and are gaining popularity in
the country, CVSB would like to propose a new business venture called “The Gaming Hub” that
will provide a community-based platform for players in Kuala Lumpur. Currently, there are
several places that provide facilities for renting e-game consoles, but almost all of them are
unlicensed and are in private residences. In addition, for currently the conventional cyber cafes
in Malaysia are mainly catering to the more conventional computer- based games with
limitations on computer capacity to play prolonged e-games sessions. Most individuals or groups
of e-game players play either in their own homes or in the homes of their friends. However, it
poses some problems such as interference because playing at home is sometimes not conductive
to the experience of e-gaming players.

Therefore, CVSB has proposed an idea that is very relevant at the time. Farid as the finance
manager has been asked to propose a new business venture before 15 December 2018. Farid has
seven weeks to complete a proposal that can convince top management to invest in the venture.
The proposal should include a master budget, a breakeven analysis and a growth plan.

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2.0 BACKGROUND OF THE COMPANY

Creative Venture Sdn Bhd (CVSB) was established in 2018. The company's location is currently
in Kuala Lumpur. CVSB is a company registered with the Companies Commission of Malaysia.
The company is a company that produces e-games. The meaning of e-games is games that use
electronics to create an interactive system that can be played by players. Video games are the
most common form at the moment, and for this reason the two terms are often used
interchangeably. There are other common forms of electronic games including handheld
electronic games, standalone systems (e.g. pinball, slot machines, or electro-mechanical arcade
games), and non-visual exclusive products (e.g. audio games). E-games or cyber games are part
of a new industry that can generate revenue for Malaysia in the future at Asian and international
levels. The directors of this company are Rafiuddin Omar, Farid Yaakub and Haaziq Zahar. All
three are co -directors for the company. As of July 2018, only three employees were hired,
namely Rafiuddin as the chief gaming officer, Farid as the finance manager and Haaziq as the
marketing manager. Other vacancies will be filled by December 2018 at the latest just in time for
the opening in January 2019.

CVSB ORGANIZATIONAL STRUCTURE

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3.0 SUMMARY OF THE CASE

The summary of case is from a business venture of gaming industry. Farid, appointed as a
finance manager in Creative Venture Sdn Bhd (CVSB). CVSB was propose a new project which
is the gaming hub for the business venture. Them need seven weeks to proposal the strategic
business plan and convince the management to invest in this project since the e-gaming industry
was into market Malaysia rapidly. CVSB will provide the facilities e-games to rent a space to
training and play, and provide a community based- platform for players in Kuala Lumpur.

About the project

Nowadays, gaming sports is part of a new industry that could contribute to the growth of
Malaysia economy. The gaming esports industry has entered the mainstream and is fast gaining
popularity. The increasing viewer is what mainly contributes to the revenue growth. Seeing the
potential of reaching a large and engaged audience, brands are investing in eSports marketing,
both directly and indirectly. There are currently a few places where people may rent for e-game
consoles, however practically all of them are unregistered and located within private houses. The
cyber cafes in Malaysia mostly to more traditional- based games, with limitations on computer
power to play extended e-games sessions. To meet this people needs, it is planned the gaming
hub be open at the Strand, Kota Damansara. The area is surrounded by very strategic places
where it has many buildings of higher visitor such as offices, school and private colleges. This
gives The Gaming Hub the ability to reach its target demographic of young people and families.
This target people is most likely to live in condominium which has a limited room for gathering
and play games.

About the company

Creative Venture Sdn Bhd produces e-games that has been registered with SSM license. There
are 3 directors in this compony which is Rafiuddin Omar, Farid Yaakub and Haziq Zahar. Three
of them have a different position that important in organization: Rafiuddin Omar appointed as
the chief gaming officer, Farid as the finance manager and Haaziq as the marketing manager in
July 2018. There are a few slots of position that need to be completed to running a business in
January 2019.

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Service offered
The Gaming Hub has offer space rental services for this operation. There are many types of
space rooms that available for people to rental likes open area, small room, medium room and
large room. It has be design to make sure the community esports can feel the environment of
gaming experience at the RPG area where the customers can play in open space for other to
view. These also have room for people who need some privacy while playing games. Other that,
it also provides a room with equipped monitor screen and soundproof walls to keep it from noise
confined to its space.

Marketing communication
Social media marketing is a powerful way for a business of all sizes to reach prospects and
customers. When is come to the promotion, it would be headed by the marketing manager
together with the marketing and sales executive. These departments would be in charge of
competitions and social media posts, as well as marketing campaigns. Because The Gaming Hub
is a new business venture, for its marketing budget, the company aims to allocate annually
RM12,000. Marketing costs would be focused on paid posts on forums and websites of social
media such as The Vocket, The Malaysia E-Sport League, Malaysia's e-sukan, the Facebook e-
sport page and the Lowyat Forum contained websites and forums.The Gaming Hub could be part
of the Malaysian e-games community via these platforms.

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4.0 ISSUES AND PROBLEM OF THE CASE

Lack of staff
Based on the study we conducted, one of the major problems faced by Creative Venture Sdn Bhd
(CVSB) is the lack of staff to coordinate their work. For example, as of July 2018, they still have
vacancies for “master seats” such as admin & finance executive, maintenance executive and
marketing & sales executive. The proof is for the marketing division, marketing & sales
executives are still vacancies. This will definitely make it difficult for the manager, Haaziq
Zahar, to carry out the marketing work because there is no assistant in carrying out the work. We
all know that the work for marketing and sales is quite complicated and difficult. It cannot be
handled by one individual, if it can be handled, it takes quite a long time. The company needs to
act immediately and drastically so that no problems arise in the future. While CVSB needs to
resolve all issues before the opening day. According to their estimation, they will fill the vacancy
by December 2018. This is a big problem for CVSB because the vacancy is very much needed in
organizing and coordinating work in preparing proposals that can convince top management to
invest in the effort.

Limitation of internet speed

Based on the case study conducted, in the operational perspective the business implementation of
The Gaming Hub (referred to as GHSB) still relies on old technology which results in a rate of
slowness as well as internet speed limitations and high cost waste. Their plan is to get three
different unifi ports to support 27 consoles and 28 PCs at all times. GHSB will pay for two Unifi
Biz Pro plans with a speed of 100 Mbps and one Unifi Biz Advance plan with a speed of 30
Mbps. The lagging Internet speed limitations also contributed to the increase in production costs.
This in turn can result in the production of low quality products that will be provided to
customers. The minimum internet speed for this e-gaming game is between three to six Mbps
and is only recommended for casual games with minimal reaction time. For more competitive
games, require at least 25 Mbps. Even if they only subscribe to 100 mbps and 30 mbps Unifi
internet, this will be difficult at critical moments such as the presence of many customers. They
need to take this seriously and be careful in deciding to subscribe to internet services that can
provide value to them.

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Target Market
Based on this case study, Creative Venture Sdn Bhd (CVSB) has proposed that the new venture
business The Gaming Hub (GHSB) be opened in The Strand, Kota Damansara. The area is
surrounded by high -density residential, office, commercial areas and private schools and
colleges, Kota Damansara and rich surrounding areas such as Mutiara Damansara, Tropicana and
Damansara Perdana. GHSB's target market is only targeted at two groups, namely young
professionals and young families. This is one of the problems that they need to think about. This
is because, this e-gaming game is not only aimed at young professionals and young families, it is
a universal game that is suitable for all levels of individuals. It is also very popular with school
students and students at higher levels such as colleges and universities. The proof is, many
studies have been done reporting that this e-game game is in demand by all groups. Furthermore,
the proposed area is high density and inhabited by all walks of life from primary school students
to the elderly. Therefore, their target market needs to be broader and not just two groups.

Time of operation
Based on the case study, Creative Venture Sdn Bhd (CVSB) has proposed that The Gaming
Hub's (GHSB) new venture business be run for 7 hours a day. This is one of the very big
problems in setting operating hours without thinking and doing research in advance of examples
of e-gaming businesses that have been conducted. This is because, 7 hours a day is not suitable
because most of those who run e-games business in the country or abroad operate more than 15
hours a day. The 7 hours a day proposed by CVSB does not set what time the daily operations
will start, but if you consider the probability that they will start operations during the day, they
will certainly not be able to attract customers. This is because its target market is aimed at young
professionals and young families, of course the group’s free time is only at night, because during
the day they must work. They need to address this operating time problem more systematically
so as not to conflict with their target group. In addition, CVSB needs to maximize operating
hours in order to maximize their profits. They need to take into account fixed costs such as rent
and employment of their permanent employees. Therefore, they need to use the available
resources to maximize their profits such as operating time.

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Lack of segregation of duties

Based on the case study, Farid as the Finance Manager has identified that the main costs
involved in the implementation of The Gaming Hub (GHSB) business venture. However, in
identifying the main costs involved in their management costs, Farid does not refer to a party that
is indeed authoritative or expert. For example, in maintenance costs, Farid sets the cost of the
costs involved, while in that period the position for Maintenance Executive is still vacant. This,
in turn, can lead to doubts in convincing top management to invest in the venture. This will raise
questions from top management how a Finance Manager sets maintenance costs without
involving a Maintenance Executive. This problem is due to staff vacancies that need to be filled
immediately in formulating their strategies to be more competitive.

Changes of layout position

In setting up The Gaming Hub, proper layout is important to ensure that The Gaming Hub can
make install maximum number of consoles, have enough space for extra room, and still be able
to move around easily for customer. The point of view in layout The Gaming Hub, there are a
few thing that not necessary for their services which is VIP room, many of RPG-PS4 consoles
and other else. It will not enough space for extra activity and not easily to go around. There are a
lot thing that CVSB need to arrange in good space to make sure it look neat and comfortable
enough to make the gaming e-sport player feel the environment gaming and feel most
convenient. Other than that, Gaming Hub lack of revenues because not provide the café which
sell food and drink that could raise income in business. At the Gaming Hub there are always
customer who smoke. There are disadvantages for them which not provided the smoking room
that can lead to air pollution and make other customers not comfortable and also high chance of
absence due to illness to other customers. The smoking room must be sealed, and the non-
smoker must be well protected.
.

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5.0 APPLICATION OF ANALYSIS TOOL

1. Strength, weakness, opportunity, and threat (SWOT)

analysis. What is SWOT analysis?
SWOT analysis (strengths, weaknesses, opportunities, and threats) is a framework for
evaluating a company's competitive position and developing strategic plans. SWOT
analysis evaluates internal and external variables, as well as existing and prospective
future opportunities.

A SWOT analysis is intended to allow a realistic, fact-based, data-driven examination of

an organization's, initiative's, or industry's strengths and weaknesses. The organisation
must maintain the accuracy of the study by avoiding preconceived notions or grey
regions and instead concentrating on real-life circumstances. Companies should use it as
a guideline rather than a prescription.

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Explanation:
i) Strength
• Strategic Location
Creative Venture Sdn Bhd (CVSB) is an e-games company located at Kuala
Lumpur but for a new business venture called The Gaming Hub that will be
opened at an analysis place at The Strand, Kota Damansara. The location is
surrounded by high density residential areas, offices, commercial areas,
private schools, colleges and affluent neighbours that will be attracting young
professionals and young families there.

• Complete Facilities
Furthermore, the rooms that are prepared for players are equipped with state-
of-the-art monitor screens, sound system and furniture. Rooms also padded
with soundproof walls to let others feel comfortable and closed-circuit
television cameras to ensure safety. Closed-circuit television also has been
installed to make sure the security and safety will be monitored well by our
receptionist.

• Got Option For Privacy Room

People who want to feel at the RPG area, they can choose to rent a small or
medium room. Meanwhile people that want a privacy room can choose
renting a FPS, DOTA or MMORPG VIP rooms.

ii) Weakness
• Operation hour
There are no operation hours stated in their business plan. So, it becomes a
problem to calculate their financial statements accurately.

• Outdated performance internet

a) The Problem with Out-of-Date Software/Firmware.

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Having the right hardware won’t be helpful if the company don’t keep it
updated. Outdated firmware can lead to "sticky client" behavior, which

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means a device will automatically connect to a certain access point, even

if there is one available closer to connect to. This results in slower internet
speeds, hindering your access to online files and applications.

b) The Problem with the speed of the internet.

As we can see, 100 mbps speed of internet connection is limited to 10
users only. So, it can cause lagging on playing such games and using the
devices there. When using the internet, the importance of internet speed
will impact the user's comfort. At least the internet speed must not be less
than 500mbps to maintain the performance of connection.

• Technology changes rapidly.

Time goes by with very rapid progress of technology. As we can see, fast
technology development creates new policy issues. It may outrun our ability
and society's demand to adjust to the changes that new technologies bring
about, as they may influence our business and costing. The more modern
technology, the more the problem of scammers comes in the future.

iii) Opportunities
• Sponsorship Tournament
When it comes to the tournament, there will be many viewers worldwide who
will watch the game including investors and so on. Many of the e-gamer
player or club will perform this tournament to attract the investor to invest
their club. So, the investor will sponsor them so that they will increase their
fame and the investor will get to market their brand.

• Social Bonds
By having ‘The Gaming Hub’, players that live in an apartment,
condominium that have a limited space will prefer to go to ‘The Gaming Hub’
to play games together. This will lead to social bonds intertwined between
them.

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• No Competitors
The Strand, Kota Damansara is the suitable proposed location because there
are no competitors there and to gain customer trust is much easier compared
to locations that have competitors because customers will have opportunities
to differentiate the best services given.

iv) Threats
• Quantity Customer
Expectation of customers in this new location is unpredictable because
customers' acceptance to their business is a fresh experience to people around
there. So, they have to increase their promotion for example for pre-opening
promotion that is exclusively for the first 100 customers.

• Electric Power Supply

Next is, they have to check the electric power supply at their new location
because this will affect whole operation activities. If the power supply needed
is not enough, the electrical instrument has to be reduced or else they have to
make an application to their management to increase their voltage in the
shoplots.

• Updated Software
As we know, technology is going so fast nowadays. Same thing goes for
software, so they have to make sure they use the latest software that could
help in smoothing their business well.

2. Porter's five forces analysis

What is porter's five forces analysis?
Porter's Five Factors is a model that identifies and analyses five competitive forces that
influence every sector and aids in determining an industry's weaknesses and strengths.
Five Forces analysis is commonly used to assess an industry's structure in order to

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develop business strategy. Porter's model may be used in any sector of the economy to
better assess

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the degree of competition and increase a company's long-term profitability. The Five
Forces concept is named after Harvard Business School professor Michael E. Porter.

Explanation of porter's five forces analysis:

A. Competition in the industry
Competition refers to the number of competitors and their ability to undercut a
company. The larger the number of competitors, along with the number of
equivalent products and services they offer, the lesser the power of a company.
However, as we can see there are no competitors around the area of the shop lots.

B. Potential of new entrants into the industry

As stated in paragraph of marketing communications, it stated there is no
competitor with a similar business around the identified area. However, when
CVSB has made their platform there and gets customer trust and satisfaction,
potential new entrants will disturb the smooth of their business because our
customer will get confused with our speciality and our differentiation from new
competitors.

C. Power of suppliers
Supplier power refers to the pressure given by suppliers that can doing anything
on businesses by raising prices, lowering quality, or reducing availability of their
products. Based on this situation, CVSB may face difficulty in getting supplies of
their inventory in continuing their business activities. Based on this situation,
CVSB had to reduce their performance in given service to their customer because
of pressure from supplier that raising prices, lowering quality, or reducing
availability of their products.

D. Power of customers
Buyer bargaining power refers to the pressure that given by consumers that can
impact on businesses to get them to provide higher quality products, better

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customer service, and lower prices. When analysing the bargaining power of
buyers, the

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analysis conduct from the perspective of the seller. Buyer power is one of the
forces that shape the competitive structure of an industry where they could
demand to get higher quality product and better customer services with the
demand of lower prices.

E. Threat of substitute products

Substitutes definition is the availability of a product that the consumer can
purchase instead of the industry’s product. When they have built trust, confidence
and loyalty towards their customer, but if their customer has availability to buy
their own facilities like at RPG area and the sound effects is similar or maybe
more effective than at ‘The Gaming Hub’, the loyalty of the customer will drop.

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6.1 ANSWER THE APPLICATION QUESTION

a. Prepare a master budget. Should CVSB set up The Gaming Hub at the identified location of
The Strand, Kota Damansara, with the capital expenditure of RM350,000? Should CVSB
offer all the services of the six types of rooms planned?
Master Budget
I. What is a Master Budget?
The master budget combines all lower-level budgets created by a company's many
functional departments, as well as planned financial statements, a cash projection,
and a financing plan. The master budget is often provided monthly or quarterly
and includes the whole fiscal year of a firm. An explanation paragraph that
describes the company's strategic orientation, how the master budget will help
achieve particular goals, and the management activities required to meet the
budget may be included with the master budget. There may also be a discussion
of the necessary personnel modifications to meet the budget.

II. What is the advantage of a Master Budget?

Another advantage of having a master budget is being able to detect difficulties
and plan ahead of time. For example, the master budget may show you that if we
exceed its limit, the firm will spend more than it earns each month. To address the
issue, examine the finances to determine which department is overspending. Then
the company would either decrease the costs or make other cuts to free up
resources for the extra spending. It is more difficult to identify budget difficulties
when only one aspect of costs is examined.

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III. Table of Master Budget:

No. Cost per month / item Amount (RM)

1. Rental 10,000
2. Management remuneration 9,000
3. Salary of maintenance supervisor 2,500
4. Salary of housekeepers 2,700
5. Salary of admin staff 2,500
6. Salary of receptionist and part time staff 3,600
7. Internet 1,097
8. Electricity costing for air-conditioning and lighting 7,000
9. Depreciation 5,104.17
10. Furniture 50,000
11. PC/Consoles 137,500
12. Electrical Equipment 50,000
13. TV, PS4 and PC power usage 37.80
14. Water usage 11.97
15. Service maintenance 42
16. Snacks and titbits 5,250
17. Marketing budget 1,000
18. Backup cost 62,657.06
Total amount (RM) 350,000

IV. The answer is:

= Yes, CVSB should set up The Gaming Hub at the identified location of The
Strand, Kota Damansara, with the capital expenditure of RM350,000.

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= Yes, CVSB should also offer all the services of the six types of rooms planned.
Based on this situation as we can see the layout for VIP is not necessary and the
company need to focus for Dota user who need more space in playing those
games together.

V. Calculation part:
Rental = RM5,000 per month x 2 shoplots
= RM10,000

Management remuneration = RM3,000 per month x 3 key management

personnel
= RM9,000

Salary of maintenance supervisor = RM2,500 per month

Salary of housekeepers = RM900 per month x 3 housekeepers

= RM2,700

Salary of admin staff = RM2,500 per month

Salary of receptionist and part time staff = 1x full time receptionist + 2x part
time
Staff
= RM1,500 + (2 x RM1,050)
= RM3,600

Internet = 2x Unifi Biz Pro + 1x Unifi Biz Advance

= (2 x RM399) + RM299
= RM1,097

Electricity costing for air-conditioning and lighting = Air-conditioning + lighting

= RM6,570 + RM430
= RM7,000

Depreciation = Furniture + Consoles + Electrical equipment

= RM416.67 + RM3,437.50 + RM1,250
= RM5,104.17

Furniture = RM50,000

PC/Consoles = RM137,500

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Electrical Equipment = RM50,000

TV, PS4 and PC power usage = TV + PS4 + Computer

= RM0.08 per hour + RM0.03 per hour +
RM0.07 per hour
= RM0.18 per hour x 7 hours daily
= RM1.26 per daily x 30 days
= RM37.80

Water usage = RM0.057 per hour x 7 hours daily

= RM0.399 x 30 days
= RM11.97

Service maintenance = RM0.20 per hour x 7 hours daily

= RM1.40 per daily x 30 days
= RM42

Snacks and titbits = Medium Room x Large Room

= RM5 + RM20
= RM25 per hour x 7 hours daily
= RM175 x 30 days
= RM5,250

Marketing Budget = RM12,000 annually / 12 months

= RM1,000 per month

Backup cost = Total Capital Expenditure - Total cost per month / item
= RM350,000 - RM287,342.94
= RM62,657.06

b. What would be expected payback period for this investment?

Definition
The time it takes to recoup the cost of an investment is referred to as the payback period.
Simply explained, the payback period is the time it takes for an investment to break-even
point. The attractiveness of an investment is proportional to its payback duration. Shorter
paybacks make investments more appealing.

The payback technique is frequently employed as a tool of analysis since it is simple to

implement and understand for most people, regardless of their academic background or
field of interest. It can be highly useful when used carefully to compare similar

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investments. The payback technique has no specific decision-making criteria as a stand-

alone tool for comparing investments, except potentially that the payback period should
be less than infinity.

Advantage
One of the benefits of the payback period is that it is particularly useful for organisations
that make relatively small expenditures and hence do not need to undertake more
complex calculations that account for other aspects such as discount rates and throughput
impact. In addition, among the advantages of using the payback period method, the
concept is very easy to understand and calculate. The payment duration can be computed
without utilising a calculator or an electronic spreadsheet while completing a cursory
examination of a proposed project.

Besides that, among the advantages of this payback period method, it provides a risk
focus. The analysis are focuses on how quickly money can be returned from an
investment, which is essentially a measure of risk. Thus, the repayment period can be
used to compare the relative risk of the project with varying repayment periods. Lastly,
this method can also provide a liquidity focus. Because this analysis supports projects
that return money quickly, they tend to produce investments with higher levels of short
-term liquidity.

Calculation
Formula = Initial Investment / Cash Flow

Annually Initial Investment = RM350,000

Cash Flow = Gain – (Fixed Cost + Direct Cost)

Gain = 50 expected customer x RM 2 expected price per hour
= RM100 x 7 hour (total hour per day)
= RM700 x 30 days (total day per month)
= RM 21,000 x 12 month
= RM252,000

Cost = RM27.34 + RM9.89 + RM14.79 + 2.45

= RM54.47 x 7 hour
= RM381.29 x 30 days

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= RM11,438.70 x 12 months
= RM137,264,40

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Cash flow annually = RM252,000 – RM137,264.40

= RM114,735.60

Payback Period = Initial Investment / Cash flow annually

= RM350,000 / RM114,735.56
= 3.05 YEARS

In conclusion, the expected payback of these investments is around 3 years 1 month and
after that, they can focus on making a profit for the future well.

Justification
Taking into account the expected return on this investment is around 3 years 1 month, the
company can certainly use this short return to make the next investment. Among the
investments that can be done by them is like opening a new branch in other places,
especially densely populated areas. For the next opening, maybe they can set a target in
the Klang Valley area first before expanding to other places such as big cities throughout
Malaysia such as in Johor Bahru, Georgetown and so on. In addition, among the
advantages that can be used with this short repayment period, companies can use it in
streamlining gaming equipment and systems. This is because, for these e-games, gaming
systems and gadgets change very quickly and change over time. Therefore, they can take
advantage of this short payback period by investing in streamlining and standardizing e-
gaming systems and tools to be more competitive. In conclusion, the expected payback of
these investments is around 3 years 1 month and after that, they can focus on making a
profit for the future well.

c. Prepare a breakeven analysis, What would be the ideal occupancy rate to ensure
profitability?

A break-even analysis is a useful tool for determining at what point the company, or a
new product or service, will be profitable. It’s a financial calculation used to determine
the number of products or services need to sell to at least cover the production costs.

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¿ Cost
BEP= Selling price−Variable Cost Calculation for total fixed cost
RPG, PC & FPS = RM 1.75 x 7 hours x 30 days = RM 367.5
DOTA – PC = RM 7.01 X 7 hours x 30 days = RM 1472.1
DOTA – PS4 = RM 3.50 x 7 hours x 30 days = RM 735
MMORPG = RM 5.26 x 7 hours x 30 days = RM 1104.6
= RM 3,679.20 x 12 month
= RM 44,150.40
RPG, PC, FPS DOTA - PC DOTA – PS4 MMORPG
Selling RM 2 RM 12 RM 14 RM 30
Price
Direct Cost RM 0.70 RM 7.78 RM 6.39 RM 22.09

Contributio RM 1.30 RM 4.22 RM 7.61 RM 7.91

n Margin
WACM = RM21.04
RM 44,150.4
BEP (unit )= =2,098unit
RM 21.04

BEP(unit)
RPG, PC, FPS = 40% X 2098 unit = 839 unit
DOTA – PC = 30% X 2098 unit = 629 unit
DOTA – PS4 = 20% X 2098 unit = 420 unit
MMORPG = 10% X 2098 unit = 210 unit

BEP(sales)
RPG, PC, FPS 839 unit X RM 2 = RM 1,678
=
DOTA – PC = 629 unit X RM 12 = RM 7,548
DOTA – PS4 = 420 unit X RM 14 = RM 5,880
MMORPG = 210 unit X RM 30 = RM 6,300
= RM 21,406

d. If The Gaming Hub achieved the projected financials as stated in the master budget, should
Farid recommend opening a second branch?

Yes, The Gaming Hub has achieved the projected financials as stated in the master
budget. That is why Farid should recommend opening a second branch because the
financial management that is being planned is RM350,000 and the actual master budget is
RM350,000. By comparing those planned and actual costs, they are able to plan a
financial business plan within the budget given. But before Farid recommend to open
second branch, there is some few things that need to be consider carefully:

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• Evaluate the market

Before starting a new branch in a new place, Farid must evaluate the market at
that place by identifying if there are competitors there, how they want to
create differentiation of their services from their competitors and how
acceptance of people in the new environment towards their business.
Furthermore, Farid must open a second location in a market where he fully
confident their business could thrive as seen as per analysis, where there is no
competitor with a similar business model around The Strand, Kota
Damansara.

• Evaluate the competition

Opening a second location may introduce the company to competitors they
don't have at their primary site. Look at what other competitors are currently
operating in the new area, analyse their successes and setbacks and determine
how our competitors present different challenges at our second location than
at our primary one.

• Estimate inventory needs

Inventory needs change with expansion of the business. That's because every
location will require its own stock. If a customer visits our new location and
our requested item is out of stock, we can’t usually get it from another
location quickly enough to serve that customer. Application of current
analytics to make projections about the inventory required at a new location.
Along with inventory, review current and future supply chain and warehouse
are needed.

• Secure company cash flow

When opening a second business location, it's best if the company has the
money on hand to expand. If we don’t have ample cash flow, companies can
look for investors, or peer funding to help the success of the business. Farid

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must make sure the company can handle worst-case scenarios, like slow
months while the business gets established.

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• Find a good staff

Farid and the HR department need to find not only reliable workers but a
manager who is invested in our company's mission and way of doing business.
If Farid chooses to open in an unfamiliar area, he must find a local who knows
the people there who can give a leg up in connections and adapting to the
local culture. Contact the area's business association and attend some events.

• Find new location

Finding a perfect location within our target market is as important like our
new location as it was for company original business. Even though the shoplot
is under rent, Farid also has to look at safety, local ordinances, average foot or
drive-by traffic, ease of access, and demographics of the location. Farid has to
make sure of an area that has ample demand for our product or service with at
most modest competition from similar businesses. It's not just what's outside
the company second location that matters. The building itself is just as
important. Can you reasonably fit your operation there? Can you modify it to
resemble your first location and develop a unified brand? Does the landlord
seem trustworthy and responsive? Make sure to answer these questions before
committing to your second location.

• Prepare marketing campaign

Just like when they opened their first business, the company wants some pre-
opening promotion for our second location as well as a memorable grand
opening kickoff. After that, Farid should plan on a year of consistent
promotion to get our second location established. One advantage unique to
opening a second location is that our customers at our first location can help
spread the word and may live closer to our new store. Farid may also be able
to promote the company to other businesses, not just people in our new
market, social media and targeted gamers forums and websites are also
important too.

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7.0 RECOMMENDATION
Based on case study, in order to make up for a shortage in skilled workers, many
companies have begun offering training to their existing employees, in order to tailor them to fill
current gaps. This can mean training offered in-house, where a knowledgeable employee shares
with others their valuable expertise. It is a great way for companies with a few good resources to
increase their value without expending too much time and money. Another option is outside
training. Several businesses offer their employees incentives to return to school to get the
education they need. While this option can be more expensive and time-consuming, it can also
pay off in the long run. Not only does it ensure your employees are trained to industry standard
quality, but as an incentive alone can attract a great deal of talented workers to your doorstep.

Furthermore, network speeds are closely tied to an organization’s ability to stay

productive and remain competitive and profitable at all times. As businesses expand and take on
new services, technologies, and a larger workforce, they require more network capacity to
support growth without sacrificing efficiency. Determining which network or bandwidth upgrade
is right for your organization requires the right training, planning, and expertise. Local managed
network service providers (MNSPs) are knowledgeable about how to work with local
organizations to increase their business internet speeds and network reliability, tailoring their
solutions to fit an organization’s unique network needs.

Next, the company not only focus on an e-gaming hub but continue to produce the e-
game product. Studies have shown that certain games can help younger children improve early
reading skills with the support of parents and teachers. Games like ‘Times Table Rock Stars‘ that
is used in primary schools and pre-school apps like ‘Endless Alphabet‘ can be great tools to help
children learn in a more engaging way. Also, with the growth of connected toys, children can
experience physical play while playing on devices. Educational toys like Osmo combines tactile
play pieces with a device’s camera to bring to the in-play action to life.

Lastly, The Creative Venture Sdn Bhd (CVSB) should improve their segregation of
duties. This importance because can increase risk in fraud. There is no oversight when a single

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person performs every financial function. Holding several people responsible for the finances
reduces

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fraud risk and acts as a deterrent to keep employees from attempting fraud. Making a
different employee responsible for reviewing the work of others is a good oversight control.
Another problem with the lack of segregation of duties is the increased risk of error. Nobody is
perfect, and errors will be missed if no review is performed. That lesson here is unwise to have
one person controlling too many business processes. The duties that make a business run should
be segregated among multiple people, so that no single individual amasses so much power that
he or she could wreck the business. Segregation of duties is a crucial component of risk
management.

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8.0 CONCLUSION
Video games are a form of media that is often associated with negative health consequences.
However, when games are played in moderation and with mindfulness, they are a viable source
of stress relief as well as a catalyst for mental health improvement and development of social
skills. Video games themselves are a relatively modern form of entertainment. They are
engaging and immersive on a level different from that of traditional board games and other forms
of entertainment. The player actively contributes to the level of satisfaction he/she attains from
this medium and thus is more invested and willing to engage in the elements of the video game.
The amount of play time is also an important factor in the effects of gaming. Although excessive
playtime can have negative consequence, gaming in moderation can be healthy, fun, and
educational.

The impact of video games is apparent as it is affecting thousands of people around the world
daily. From Street Fighter to FIFA 18 these games are impacting the gamers in society
psychologically and physiologically. Many gamers have become attached to the life and person
they believe they have become through virtual worlds experienced in games. These worlds have
caused gamers who otherwise would not be living their ideal life in reality to get caught up in the
fantasy and unrealistic expectations of video games.

Next, every sport has its stars, but few come anywhere near Sang-hyeok "Faker" Lee's role in e-
sports. Faker, 25, is already a multi-millionaire thanks to his skill at League of Legends (LoL), a
competitive online video game enjoyed by 115 million active players around the world. Faker's
career began in 2013, when he was 16 years old and had no professional experience. He was
signed to play for SK Telecom T1's second team, and together with his teammates, he surpassed
all expectations. At the end of the season, they went to the World Cup and became world
champions in their first attempt.

Lastly, as shown, game hubs use a variety of instruments to positively support economic
development. The variance of these offers makes it difficult to name clear dividing lines between
co-working space, collective, incubator or accelerator. It makes sense to look at the landscape of

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the game hubs and their activities as a whole. A good game hub is characterized by a
combination

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of different measures. Incubator programmes are suitable for networking young teams as quickly
as possible and imparting important introductory knowledge to them. Collectives are suitable for
establishing long-term structures. Ideally, these two measures are combined with other means of
public relations in one institution.

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9.0 REFENCES

Jones, J. (n.d.). Chron. Retrieved from Small Business:

https://smallbusiness.chron.com/start- cybercafe-business-2075.html
Kagan, J. (2021, August 2). Payback Period. Retrieved from
investopedia:
https://www.investopedia.com/terms/p/paybackperiod.asp
Mitchell, C. (2021, August 20). Breakeven Point (BEP). Retrieved from investopedia:
https://www.investopedia.com/terms/b/breakevenpoint.asp

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10.0 APPENDIX