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TM251BusinessPlan TaraOneG
TM251BusinessPlan TaraOneG
TM251BusinessPlan TaraOneG
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Business Plan
Tara, One G!
Page 1
Ongoing Market Evaluation 41
THE ECONOMICS OF THE BUSINESS 42
Capital Requirement 42
Gross and Operating Margins 43
Profit Potential and Durability 44
Fixed, Variable, and Semi-variable Costs 45
Months to Reach Positive Cash Flow 46
MARKETING PLAN 47
Overall Marketing Strategy 47
Pricing 51
Sales Tactics 52
Free Trial 52
Referral 52
Monetization 52
Loyalty Program 53
Advertising and Promotion 53
Digital Advertising or Internet Marketing 53
Social Media Marketing 54
Brand Awareness 55
Audience Engagement 56
Cost Efficient 56
Customer Feedback 56
Increased Web Traffic 57
Brand Recognition 57
Improved Brand Loyalty 57
Promotion through Customer Reviews 57
Transit Marketing 58
DESIGN AND DEVELOPMENT PLANS 58
MANUFACTURING AND OPERATIONS PLAN 61
Stage 1: Pilot Run 61
Social Media Marketing 62
Transit Marketing 62
Pilot Run 63
Loyalty Rewards System 63
Stage 2: Expansion and Continuous Improvement 63
Improved User Experience 64
Target Market Expansion 65
Operating Cycle 65
Geographical Location 65
Facilities and Improvements 66
Page 2
Regulatory and Legal Issues 66
Republic Act 10173 – Data Privacy Act of 2012 66
Games and Amusement Board (n.d.) Resolution No. 2017-21 ESports license
fees and charges 66
DepEd Order 83, Series of 2003 66
CSC Resolution No. 1701077-2017 67
Copyright violation 67
MANAGEMENT TEAM 68
Organization 68
Key Management Personnel 68
Management Compensation and Ownership 69
Other Investors 69
Employment and Other Agreements and Stock Option and Bonus Plans 70
Other Shareholders, Rights, and Restrictions 70
SUSTAINABILITY AND IMPACT 71
Issues of Sustainability of the Venture 71
Impact on the Environment 72
Impact on the Community and Nation 72
OVERALL SCHEDULE 73
CRITICAL RISKS, PROBLEMS, AND ASSUMPTIONS 76
Legal Policies 76
Health Hazards 76
Application Lifecycle 77
Human Resource Risks 77
Safety 77
THE FINANCIAL PLAN 79
Actual Income Statements and Balance Sheets. Pro Forma Income Statements
79
Pro Forma Balance Sheets 81
Pro Forma Cash Flow Analysis 82
Break-Even Chart and Calculation 83
Return on Investment and Payback Period 84
Cost Control 85
PROPOSED COMPANY OFFERING 86
Desired Financing 87
Offering 87
Capitalization 87
Use of Funds 87
Investor’s Return 87
Page 3
APPENDIXES 88
REFERENCES 91
Page 4
I. EXECUTIVE SUMMARY
A. Description of the Business Concept and the
Business
With the accessibility of games on mobile devices, gaming has
evolved from a niche hobby and pastime to a global phenomenon.
Noting that almost everyone has a mobile phone today, it comes as no
surprise that the demographics of gamers are so diverse. Even more,
online games also evolved from single player, to a two-player, and then
to multiplayer sessions.
LaroPH, the company that will host TOG!, aims to establish first
its brand by entering the TOG! market as a platform that enables gamers
to speedily achieve higher levels of gaming while their co-gamers are
earning a revenue. There will be loyalty, rewards, and referral programs
to encourage continuous use of the platform.
Page 5
With the increasing ventures of online games in the international
market, global expansion of TOG! is seen as an opportunity after building
its brand in the Philippines.
E. The Team
The established LaroPH company will have a six-man team—
each has a specific role that contributes to the overall strategy of the
organization. These key management personnel include the Chief
Executive/Technology Officer (CEO/CTO), Chief Finance Officer (CFO),
Head of Human Resource, Chief Marketing Officer (CMO), Head of
Legal, and Head of R&D.
F. The Offering
Basically, the TOG! platform enables gamers to play a game of
their choice with a co-player. Corresponding fees will be applied, after
the 2-week free trial period, for every type of game match the players
will take. Loyalty schemes, rewards and referral bonus systems will be
initiated to encourage more players and patronize the platform.
Earnings can be converted good as cash which may pose a money-
making opportunity for players.
Page 6
II. THE INDUSTRY AND THE COMPANY AND
ITS PRODUCT(S) OR SERVICES
Created by breaking down sectors into more defined groupings, the term
‘industry’ refers to a specific group of companies that function in a similar
business domain (Investopedia). Hence, a company belongs to an industry
which is defined by its product and/or services.
A. The Industry
The gaming industry has undergone a substantial evolution since
the 1970s and has moved from a fringe activity into the mainstream. In
1971, the arcade game Computer Space was released and was followed
up by Atari Inc.’s first commercially successful video game, Pong.
Games entered the home formerly with the release of an early gaming
console called the Magnavox Odyssey. The market lost momentum in
1977 and was rejuvenated in 1978 by another successful game called
Space invaders. With this, arcade machines began to appear in
mainstream public spaces such as malls, stores and restaurants. Space
invaders went on to make $2 billion in 1982. In the late 1970s, personal
computer gaming also took off and the development of computing led to
a simultaneous advancement in gaming technology as well.
(Luenendonk, 2015).
Page 7
Following 2010, the industry continues to develop and profit drives
technological advancement which then benefits other sectors of the
industry.
Page 8
RPG. Gamers have very positive associations with Western
developers. The most beloved games in this country include
Clash of Clans, Clash Royale, Pokemon GO, Hearthstone, and
others.
Page 9
soil. Section 2 of the document defines professional
esports events as any video game competition
played between licensed pro gamers. Filipino
citizens or not, all pro gamers participating in related
activities held in the Philippines are required to
apply for a license.
Page 10
holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight
hours on a holiday or rest day plus at least thirty
percent (30%) thereof.
b) Economics
Page 11
the monthly household bill offsets the gains they
would receive from the newly-implemented TRAIN
law. Self-employed workers, especially in the
informal sector (i.e. farmers, fishermen, vendors,
carpenters, etc.) do not feel any equivalent benefit
as they pay no income taxes in the first place.
Page 12
the Philippine population has reached 108 million
which makes it the 13th most populated country in
the world (Worldmeters, 2019).
Page 13
least 40 hours compared to 63.6 percent the year
before.
d) Technological
Page 14
Mobile internet users are spoilt for choice
when it comes to the sheer variety and availability
of mobile apps. As of the third quarter of 2019,
gaming apps were the most popular app category
in the Google Play store, accounting for 14.15
percent of available apps worldwide. As of October
2019, over 96 percent of Android apps could be
downloaded without having to pay for them upfront,
although this does not preclude other mobile app
monetization strategies such as in-app advertising
and in-app purchases. The ranking of leading
Android apps in the Google Play Store worldwide
based on revenue consists mainly of gaming apps,
including the ever-popular Candy Crush Saga and
Clash of Clans.
Page 15
downloads include Minecraft and Hitman: Sniper.
Other popular paide applications include Stickman
Legends, Shadow of Death, True Skate, Cut the
Rope, Fruit Ninja, Draw Something, among others.
These are a variety of puzzles, action, word,
arcade, sports, trivia, adventure, and strategy.
Page 16
Figure 2.2. Compound Annual Growth Rate of
Consumer Payments in the Philippines
(THENERVE, 2019)
Page 17
d) High Threat of New Entrants
Page 18
It would have a similar revenue-generating method with spotify
that features ads on its two weeks trial period to lessen the risk of abuse
on the trial period.
STRENGTHS WEAKNESSES
OPPORTUNITIES THREATS
Page 19
● Simple mechanics will strong brand and wide
attract casual gamers user base
● Gaming app market has ○ Offers in the gaming
the greatest share of app app growing at a fast
downloads rate
● Emerging advances in ● Security issues
technology ● Trust with third parties (i.e.
● Almost everyone from payment scheme, partner
different generation has game apps)
mobile phone ● Low rate of adoption of e-
● Philippine Government payment methods
Recognition of E-Sports
● Directly Affected by
Gaming Industry Positive
Growth Rate
● First-mover Advantages
● ASEAN member
advantage for expansion
in ASEAN countries
● Opportunities in
international market to
diversify the risk
● “Increasing openness
toward leisure”
(Greenspan, 2017)
● “Increasing dependence
on digital technologies”
(Greenspan, 2017)
Page 20
As the business model is designed to easily expand the product
to the global community, venturing out the international market would
also be viable and easily penetrable after building the brand in the
Philippines.
Page 21
III. MARKET RESEARCH AND ANALYSIS
Mobile games are defined as gaming applications for smart devices such
as smartphones and tablets. Leading app stores like Google's Play Store and
Apple's App Store offer paid app-downloads (single purchases) and freemium
games that are free to download but normally allow in-app-purchases for
various additional contents or access time. Physical games for mobile
consoles/handhelds and free-to-play gaming apps are not included.
This section shall identify the target market for TOG! which includes high
school to college students, middle to upper class, working class, as well as
young corporates. In addition, factors such as gender, readiness to purchase,
gaming behavior, participation of a third party, and applicable regulatory and
legal issues that may prove evident to the gaming industry in the Philippines.
A. Customers
DataReportal (2019) reported that the Philippines has 76 million
Internet users, 24.32 million play online games, and 63.84 million play
using mobile phones (online or offline modes).
Page 22
Figure 3.2. Video Game Penetration Rate in the Philippines (Statista,
2019)
Statista (2019) reported 10.9 million who play video games and a
continuous rise in penetration rate until 2023 with preference on mobile
games.
Page 23
Figure 3.4. Number of Mobile Game Users (All Correct Group, 2017)
1. Age Group
Looking back in 2017, there were 29.9 million gamers in
the Philippines who spent a total of USD 354 million. This made
Page 24
the Philippines rank 29th worldwide in terms of game revenues
(The Filipino Gamer, 2017).
Page 25
worldwide gaming proportion of women reaching only around
37%.
3. By Income
According to Statista (2019), most video game users in the
Philippines are from the medium income and low-income group.
The proposed business model should position itself to this target
market.
Page 26
Figure 3.10. Number of Hours of Playing Games in a Day
(Finding Playmate, 2019).
Page 27
5. Readiness to Purchase
a) Most Gamers Prefer to Download Games
Page 28
B. Market Size and Trends
DataReportal (2019) also reported amounting to a total of 119
million USD e-commerce were annually spent on video games.
Figure 3.13. Mobile Games Market Revenue (All Correct Group, 2017)
Statista (2019), an online portal that provides statistics, reported
forecasted a revenue of 146 million USD for 2019 and 171 million USD
for the succeeding year in the Philippine video games market.
Page 29
According to Statista (2019), the largest revenue-generating
country from video games is China.
Figure 3.16. 2019 Global Games Market Per Region (Newzoo, 2019)
Newzoo (2019) also reported that revenues are expected to
continuously rise until 2022.
Page 30
Figure 3.17. Regional Breakdown of Global Game Revenues
(Newzoo, 2019)
Newzoo (2019), summarized the game market in Table 3.1.
Page 31
Figure 3.18. Mobile Game Revenues per App Store (Newzoo, 2019)
However, Statista (2019) also noted that there will be a slow down
on revenue growth in the succeeding years for the said market in the
Philippines.
Page 32
Figure 3.20 Video Games ARPU in the Philippines (Statista, 2019)
All Correct Group (2017) also reported that the Average Revenue
Per User (ARPU) is 14.97 USD and the Average Cost per Install (CPI)
in the Philippines is 0.46 USD for iOS and 1.28 USD for Android.
Page 33
Hose (2013) noted that most technical expertise is from mobile
and social games development.
Page 34
The following figures illustrate the detailed infographics of esports'
audience growth, revenue growth, as well as the revenue streams.
Page 35
Figure 3.25. Esports Revenue Growth (Newzoo, 2019)
Page 36
C. Competition and Competitive Edges
As shown in the data in the previous sections, sales and revenues
in the online gaming industry demonstrated a distinct upward trend.
While there are already established platforms/companies in the industry,
customers may still want to consider TOG!’s product and services over
other platforms such as Steam, Garena, and Arena Match. Below are
the reasons why:
1. Steam
Steam Chat offers a “rich presence” feature wherein it can
display gamer status whether he/she can be tapped for a match.
As Steam is also game-agnostic, there is a high chance that they
can easily forward integrate to such a business model.
Page 37
2. Garena
As a leading advocate and organizer of eSports events in
greater Southeast Asia, Garena strengthens the game ecosystem
and increases user engagement. Through the Garena platform,
users can connect with their fellow gamers, get the latest news
and updates around the gaming community.
Page 38
3. Arena Match
Page 39
above. Moreover, Arena Match is a bit pricey which starts from
₱50.00 per match (Arena Match, 2019).
Figure 3.27. 2019 Global Games Market per Segment (Newzoo, 2019)
Page 40
Figure 3.28. Segment Breakdown of Global Game Revenues
(Newzoo, 2019)
The data in Figure 3.27 holds true with Figure 3.28 claiming the
larger share of smartphones compared to other sources which
contributed to the global game revenues. The data appears that for the
upcoming years, smartphones would still be the preferred device for
online gaming which could play a large part in the industry’s market
share and sales.
Page 41
IV. THE ECONOMICS OF THE BUSINESS
Economics of the Business focus on the application of various economic
principles which form parts of the assessment of the viability of the business. It
also studies the financial, organizational, market-related situations and events
that may affect the day to day operations of the Company.
It includes the analysis involving the gross and margin operations, profit
potential and its sustainability, costs relating to the operations, and break-even.
A. Capital Requirement
The initial capital requirement for the business is estimated to be
at ₱16.4 million to cover the Capital Outlay and
MiscellaneousMiscellaneous Expense of the Company for 15 months.
Furthermore, a contingency fund is being set-aside in order to provide
the funding source in case there will be changes in the estimates or
unexpected expenses will be incurred.
Capital Amount
Outlay/MiscellaneousMiscellaneous
Expenses
Permits ₱631,058.07
Equipment ₱315,596.00
Total ₱18,805,980.10
Page 42
In case of the need for additional funding sources, the Company
will consider grants/loans from government agencies such as the
Department of Trade of Industry and the Department of Science and
Technology.
Page 43
According to CSI Market, the industry standards for the online game
industry is 56%.
Page 44
According to the TechJury (March 2019), the following information
related to gaming:
If we are going to follow the demand and supply law, the demand
is interestingly increasing over the years which means there is a readily
available demand opportunity for online games. However, free games
that are available on app stores are considered a risk for this opportunity.
Page 45
E. Months to Reach Positive Cash Flow
The company is expected to generate a positive cash flow on its
15th month due to the forecasted 10% share in the target market. Based
on assumption, the revenue for FY 2021 is expected to be at P 24 Million
or P 2.7 Million monthly starting the 4th to 5th month of the FY 2021.
2020 (3.9)
2021 24.2
2022 33.6
2023 41.6
2024 52.5
Page 46
V. MARKETING PLAN
Every business, regardless of how big or small needs a marketing plan.
A Marketing Plan helps every business owner to decide how one will sell one’s
products or services to their customers. It is with the marketing plan that will
clearly explain how an organization will attain its objectives. Aside from that, a
clear marketing plan can help businesses avoid the consequences of losing out
to competitors, losing market share, gaining or retaining few customers and
missing out on opportunities (LYFE Marketing). For a new service like TOG!, a
good marketing plan can help to spread its brand name, to boost sales and to
gain and retain customers.
Page 47
likely to buy Jester archetype”. This fits well for the business’s target age
group.
Page 48
Figure 5.3. Advertising and Promotion Pyramid (Mohr, Sengupta, &
Slater, 2014)
Page 49
Figure 5.4. Tailoring the Marketing Plan to Intended Adopters Across
S-Curve (Kerin, Hartley, & Rudelius, 2015)
Page 50
Figure 5.6. Cost-Effectiveness of Three Different Communication
Tools at Different Buyer-Readiness Stages (Kotler & Keller, 2012)
B. Pricing
Since students are some of the target market of TOG!, pricing
consideration is given to them since they are the players who will most
likely make time to play TOG! but will most likely be price-sensitive.
Regular matches will be priced at ₱10 per match which is a reasonable
price even for students to pay. For the target market with medium price
sensitivity to price insensitivity, Premium matches are available for ₱15
per match while High Level co-op will be priced at ₱30 per match.
The table below summarizes the amount each player will pay for
each type of match.
Page 51
the penetration pricing strategy best suits the objectives and target
market of TOG!
C. Sales Tactics
1. Free Trial
The download of TOG! Is free of charge and the players
will be given a 7-day free trial. After that trial period, he will be
billed using his preferred payment option. Free trial is a way of
TOG! to give its customers a first hand experience on playing the
game and that experience should entice them to continue playing.
2. Referral
Each player will be given a referral code. A new player
invited by referral method will need to type in the referral code of
the player who invited him. Corresponding points will be given to
the referring player which he can redeem to claim prizes such as
free one regular match up to free high level co-op match
depending on the number of points he has accumulated.
3. Monetization
Every time a player wins a match, a portion of the game
match fee will be credited to his account. He can use this money
to pay for a new game as long as he has enough balance to pay
Page 52
for the amount of the type of match he wants. Each player will
also have the choice to accumulate his earnings and can redeem
his accumulated money to real money. The minimum amount that
can be withdrawn is P1000 subject to corresponding fees.Players
have the choice of payment they want to receive their earnings
whether bank transfer, money transfer or any other available
modes of payment. Regular transaction fees imposed by the
merchants applies.
4. Loyalty Program
To encourage more customers to play in Tara One G!, Laro
PH will be introducing a Loyalty Program. This program will entice
players to keep on playing to receive the benefits of the Loyalty
Program. The winning player in every match will receive an
amount which is a portion of the match fee. The player can
accumulate his earnings which can be used to pay for his next
match. The player will also have an option to encash his earnings.
Page 53
advertisement, this form of marketing works best for small or
startup businesses like LaroPH because of its affordability.
Page 54
In a similar study by The Next Web in January 2019, about 71%
of the Philippine population are active social media users.
a) Brand Awareness
Page 55
b) Audience Engagement
c) Cost Efficient
d) Customer Feedback
Page 56
e) Increased Web Traffic
f) Brand Recognition
Page 57
name of a customer with their positive feedback will be shared
with online ads and social media posts to influence others to play
TOG! Aside from Google Play, the following sites will be used to
gather reviews for TOG! Players:
● Androidtapp.com
● Pcworld.com
● Androidcentral.com
● Appbrain.com
4. Transit Marketing
The first level of marketing for TOG! focuses on executing
awareness activities. Once awareness of TOG! is already there,
the next level of marketing activities to induce are those that
insinuates brand recognition. To help the TOG! brand to be more
recognizable to the public, it will be marketed through transit
marketing. Transit advertising is placed in or on modes of public
transportation or in public transportation areas. TOG! Stickers
and other print ads will be placed on public transportation like
jeepneys, taxis, UV Express, trains and tricycles. This will give
TOG! the advantage of reaching all audiences regardless of ages
and incomes. The good thing with Transit marketing
paraphernalia is that they can be easily seen and cant be ignored,
they can’t be turned off, and they attract attention
(Entrepreneur.com). By using transit marketing, there is a
likelihood that people will be influenced to try TOG! Since they
see TOG! print ads more often during their daily commute.
Page 58
1. Account Creation and
Data Privacy Act
Requirements
3. Player Metadata
Population
Page 59
Module
5. Two-way Review
6. Loyalty Platform
7. Referral Platform
1 Player confirms a successful match-up after one minute and releases payment to the other player.
Page 60
VII. MANUFACTURING AND OPERATIONS
PLAN
LaroPH’s manufacturing and operations plan is a two-stage scheme that
aims to penetrate the target market in a strategic manner. Such stages are as
follows: (1) Pilot Run, and (2) Expansion and Continuous Improvement.
Duration 6 months
Payment (STAGE 1)
Staffing Cost:
● Software developers
● Customer support
● Marketing and Sales
Marketing Cost:
Page 61
STAGE 1 is a marketing-heavy phase that will last for 6 months,
with its second half coinciding with the last leg of application
development. LaroPH’s goal at this point is to create buzz for potential
customers in its virtual gaming sub-platform, Tara, One Game! (TOG!).
This will be done through a simultaneous marketing activities targeted
towards the market segment identified.
2. Transit Marketing
Furthermore, in order to instill familiarity with TOG!,
LaroPH will utilize different modes of transportation circling areas
most frequented by the target market. Such modes will be PUVs
(ie. jeepneys, tricycles, UV Express, taxis) with routes along
schools, offices, and terminals to maximize the visibility of these
ads.
Page 62
3. Pilot Run
STAGE 1 will see the pilot run of TOG!. The platform will
offer trial periods that would last for 2 weeks, with a maximum of
10 matches daily, on either sub-platform. This limit is put in place
to prevent abuse of the trial period. After the trial expires, in order
to keep playing, users will be required to pay using integrated 3rd
party e-payment systems like coins.ph, PayMaya, or GCash.
Duration 1 year
Staffing Cost:
Notable Costs
● Additional Software
developers
Page 63
● Additional Customer
support
● Additional Marketing and
Sales
Marketing Cost:
● Creation of official game
trailer (new sub-platform)
● Creation of ads (new sub-
platform)
● Creation of early sign-up
feature (new sub-platform)
● Creation of PUV ads
(stickers, top ads)
● Compensation for PUVs
with ads
● Organizing events to
different corporate offices
Development Cost:
Obtaining STAGE 1’s goals of 10-15% market share sets the road
for STAGE 2. STAGE 2 is generally a modification phase. This stage
aims to address opportunities previously unmet by the gaming industry,
while improving the experience of current users LaroPH will release its
physical sub-platform, where users looking for interested peers are
matched to play with each other. A GPS system will be added to make
sure matched players are able to physically reach one another.
Page 64
2. Target Market Expansion
In terms of marketing, both online and transit will still be
utilized for the promotion of LaroPH. Aside from those, the
marketing and sales team will be assigned to pool efforts into
pursuing gamers in the corporate sector (ex. BPOs, IT
companies, etc.). This will be done by hosting gaming events in
companies residing in technology hubs and IT parks.
C. Operating Cycle
TOG!’s operating cycle is expected to be:
D. Geographical Location
According to the 2019 census of the National Statistics Office
(NSO), Metro Manila boasts the bulk of the population in the Philippines,
which is around 13.7 million people. And with the agency foreseeing a
rise to 20 million by the year 2020, the dense city is the best place to
consider new service operations like LaroPH. Furthermore, as
previously mentioned, physical ads will be deployed to spaces where the
prospective demographics congregate. This means tasking the
marketing and sales team to heavily concentrate campaigns in places
like Bonifacio Global City, Makati, and the University Belt. where
students and young professionals and executives with disposable
income are populated in.
Page 65
E. Facilities and Improvements
Majority of the supply will come from the management team’s own
pockets. Although for additional capital, during its run, LaroPH will
continuously be reaching out to available investors and incubators for
any form of help, such as office space, technological assistance,
entrepreneurship assistance, etc.
Page 66
4. CSC Resolution No. 1701077-2017
Playing mobile or online games during office hours,
especially in government offices, is considered a grave offense
under the 2017 CSC Resolution No. 1701077-2017 Rules on
Administrative Cases in the Civil Service. Government officials
and employees who may be found in violation of conduct
prejudicial to the best interest of the service for the first time will
be suspended for six months and one day up to one year. Neglect
of Duty may likewise apply if the Office concerned has no
established office rules.
5. Copyright violation
Unauthorized distribution of video games is a complex
issue in the Philippines. Despite legislation against copyright
violation, implementation and cultural factors remain an obstacle
in the country. Illegal video games contribute to the underground
economy of the country where video gaming is a popular form of
entertainment among Filipino families. The inability of many
Filipino families to afford video game software and hardware at
legitimate prices leads them to turn to unlicensed goods. The
Optical Media Board in cooperation with the police enforces
intellectual rights law in the country.
Page 67
VIII. MANAGEMENT TEAM
A. Organization
LaroPH’s management team is made up of 6 key personnel, with
each group member assuming different leadership roles and
responsibilities, focusing on the overall strategy of the organization.
Page 68
6. Head of R&D - will report directly to the Software Architect; will be
in charge of the development and maintenance of LaroPH’s TOG!
and its future products and services
D. Other Investors
Supporting Organizations
Partnership
Page 69
E. Employment and Other Agreements and Stock
Option and Bonus Plans
On top of its Management Team, LaroPH will most likely employ
developers, CSR, and marketing personnel for its day-to-day operations.
Although for the first few years, regular, full-time posts will only be
available for lead roles such as lead software developer and lead CSR,
bonuses will still be given to contractual employees, depending on the
assessment of how the company will fare during those times.
Page 70
IX. SUSTAINABILITY AND IMPACT
Page 71
B. Impact on the Environment
Given the nature of the game, LaroPH’s TOG! will not add nor
reduce the carbon footprint.
Page 72
X. OVERALL SCHEDULE
Page 73
Page 74
Figure 10.1. Overall schedule
Page 75
XI. CRITICAL RISKS, PROBLEMS, AND
ASSUMPTIONS
A. Legal Policies
The objectives of the Data Privacy Act of 2012 are:
B. Health Hazards
Prolonged use of TOG! implies health hazards such as sitting for
long periods of time. Gamers play an average of 24-25 hours a week.
Some gamers sit for 12-hours straight on a tournament. These
conditions could lead to an increase in bad cholesterol levels. According
Page 76
to the study Froböse, muscles degenerate leading to increase in heart
ailments due to prolonged sitting. The average heartbeat of an esports
gamer is 120 to 180 beats per minute which resembles the heartbeat of
a racing driver. Both physical and mental stress could be experienced
by a gamer with the prolonged use of the application. LaroPH should
consider these hazards in developing the application and introducing
“break time” in the algorithm of the TOG! application. (Lagunas, 2019)
C. Application Lifecycle
It is inevitable that the scope of the application development is
evolving based on the company’s market research, resources and future
projections. Therefore, change requests to the development team are
evolving. Possible outcomes of these changes might be the need to
change the development team or to shift to another development team.
Problems on transitioning the knowledge might arise. LaroPH and its
legal team should ensure that the contract with the developers state that
change requests should be accommodated and that early life support
should be provided for a period.
E. Safety
One aspect of the TOG! the application is to connect gamers so
they could play physically. This means that certain personal information
of the players and the players’ location would be made available to
different parties. This poses safety concerns on both players. Any
Page 77
negative feedback from the users will greatly harm the image of TOG!
and LaroPH. LaroPH’s strategy is to ensure proper feedback mechanism
on both player’s gaming performance and attitude should be made
available before a player could advance to another tier and enjoy their
TOG! benefits.
Page 78
XII. THE FINANCIAL PLAN
The Financial Plan of the company provides relevant information relative
to the finances, expenses, revenue streams, assets and cash flows of the
company over a certain period of time.
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Figure 12.1. Revenue Vs. Incentives/Rewards
For the first year of the business, the company incurred expenses
totaling to an approximate of ₱4 million which is composed of expenses
related to the operation of a business such as salaries and wages, rent,
utilities, and permits. In the succeeding years, there are almost minimal
changes in the expenses except the salaries and wages account due to
the payment of additional compensation to the employees. On the other
hand, expenses related to utilities, advertising, depreciation, and
amortization in the succeeding fiscal years are projected to be on a fixed
rate or with little movements.
For the first year of the business, the company incurred a total of
approximately ₱4 million which is composed of expenses such as
salaries and wages, rent and utilities, and permits, among others. In the
succeeding years, there are almost minimal changes in the expenses
with movements that are attributable to the increase in salaries and
wages due to additional allowances given to the employees and
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accounting of possible increase in the rent expense. On the other hand,
expenses related to utilities, advertising, depreciation and amortization
in the succeeding fiscal years are projected to be on a fixed rate or with
little movements.
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In the preparation of the Pro-forma Income Statement, the
following information/data were considered:
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In its first year, the cash flow from operating activities of the
Company are composed of cash and cash equivalents, and the
depreciation and amortization expense. The depreciation and
amortization account, which are added back to the cash account, were
derived using a straight-line depreciation method. Accordingly,
depreciation and amortization schedule the allocation of asset cost over
a specified period, thereby reducing its carrying value.
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The Company’s break-even period for the Company is at 1.25
years. During said period, the company is expecting to fully recover the
initial cost of building the platform and other incidental expenses related
to it.
Particulars Cost/Figure
Particulars Cost/Figure
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F. Cost Control
To effectively monitor the costs involved in the operation of the
business, the following measures will be undertaken:
2. Market Analysis
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XIII. PROPOSED COMPANY OFFERING
A. Desired Financing
The desired financing to fund TOG! is through investment. Given
the above 700% annual ROI, TOG! offers a competitive rate for
investors. Founders will also fund the business so they can have shares
in the investment and also to take advantage of the high ROI.
B. Offering
Laro PH offering is an online gaming platform called Tara One
Game! (TOG!). This platform enables gamers to play a game of their
choice with a co-player. Corresponding fees will be applied for every type
of game match the players will take. To allow players to experience the
TOG! platform , a 2-week trial will be given to them for free. After the trial
period, corresponding fees will be applied. Furthermore, to be more
engaging and to encourage more players to play and to keep using the
TOG! platform, loyalty, rewards and referral bonus systems will be
introduced. The earnings on these rewards systems can be used by
gamers to pay for their game match. Alternatively, they also have an
option to encash their earnings for a quick cash.
C. Capitalization
The initial requirement to run TOG! is estimated at ₱16.4 million
excluding the contingency fund. Initial capital requirements will be
funded by the TOG! founders. However, the company considers getting
loans or financial assistance for startup business from government
offices if the generated capital from the founders falls below the initial
capital requirement. Since the business also provides a big opportunity
for investors to grow their money, Laro PH will open TOG! to external
investors. Any excess amount in the capital will be used to expand the
business.
D. Use of Funds
During the first stage of the business venture, all accumulated
funds will be used to pay for the Capital Outlay and other Miscellaneous
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expenses like the cost of developing the TOG! Platform itself, wages,
rent, marketing costs, business and other permits to operate, office
materials and supplies. However, on the second stage of the business,
funds including earnings from sales will be used for the company’s
expansion and continuous improvement.
E. Investor’s Return
The payback period for TOG! is estimated to be at 1 and a half
months with the given Return on Investment (ROI) estimated at about
767% annually. This is a great opportunity for investors to grow their
money considering the high ROI and small payback period. Laro PH can
utilize this opportunity to attract more investors. The more investors who
are coming in to fund the business means more opportunity as well to
scale up the business.
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XIV. APPENDIXES
FIGURES/IMAGES/TABLE PAGE
Figure 2.1. Leading Android apps in the Google Play Store worldwide in 17
June 2019, by revenue
Figure 3.4. Number of Mobile Game Users (All Correct Group, 2017) 25
Figure 3.7. User by Age Groups in the Mobile Games (All Correct Group, 26
2017)
Figure 3.13. Mobile Games Market Revenue (All Correct Group, 2017) 30
Figure 3.16. 2019 Global Games Market Per Region (Newzoo, 2019) 32
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Figure 3.18. Mobile Game Revenues per App Store (Newzoo, 2019) 33
Figure 3.21. Mobile Games Market ARPU in the Philippines (All Correct 35
Group, 2017)
Image 3.4. Skill Challenge Board of Arena Match (Arena Match, 2019). 41
Figure 3.27. 2019 Global Games Market per Segment (Newzoo, 2019) 42
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Figure 5.5. Kinds of Sales Promotions and Its Objectives, Advantages, 52
and Disadvantages (Kevin et al., 2015)
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