Tyler King

7/20/15
WGU Business Administration Capstone Project

Business Plan
Table of Contents
Executive Summary 2
Company and Industry Summary 4
Market Analysis

Market Summary

14

Implementation Strategy

17

Financial Statements21
Financial Statements Analysis

23

Bibliography 24

Executive Summary
Company Name: King Software, LLC.
Headquartered in: Richardson, TX.
Amount of employees at startup: 15-30.
Our Mission: To continually provide our customers games that will challenge the status
quo. In order to achieve this mission, we will facilitate a corporate culture that instills a love and
passion for gaming and video game culture in our workers while pushing their creativity and
technical skills to new heights and ensuring that most of the development process and publishing
occurs in house. Our top management will have extensive experience in the industry and with
supervising groups of employees.
Goals that will be reached in order to support our mission will include the development
of games that have expansive, deep, and engaging worlds and environments while creating
realistic, well-developed, human female characters. We will ensure that the employees that we
bring on board are knowledgeable about the industry, their role as part of the team, and the
technical skills required to provide top-notch, bug free software.
There are three key aspects of our company that will set ourselves apart from the
competition: The fact that we will self-publish, a strong family-oriented corporate culture, and
the inclusion of the female demographic.
In todays industry, there is an increasing female demographic, but there is still an issue
that plagues many games today: The fact that a lot of female characters in game are either hyper

sexualized or two dimensional. They dont feel very relatable or like anything other than objects,
which can alienate a huge customer base. Our goal as a company is to introduce female
characters that gamers can connect with and cheer on during their journey.
We will also publish our own work, which eliminates the costs related to trying to find a
publisher. It also allows us autonomy to set our own deadlines, which will ensure that our
products are fully completed and virtually bug free. I, as the founder, believe that a game
company shouldnt ship a buggy, unfinished game just to meet a deadline. There have been
multiple games that didnt sell all too well due to their notoriety.
The last key aspect that will set ourselves apart is our family-oriented corporate culture.
We want our employees to feel welcomed and needed in the workplace. The higher the employee
morale, the stronger the feeling of cohesion, and the higher quality the product. Each employee
should know that their role is absolutely vital to the company and enjoy the company of their
fellow colleagues.

Company and Industry Summary

Video games have been in existence since the 1960s, with Ralph Baer inventing the first
game software. However, gaming didnt become an official industry until the 1970s with the
release of Pong, the worlds very first commercially successful video game, and a game that first
brought the industry into the mainstream known as Pac-Man.
The 1970s also brought the first mainstream console, known as the Magnavox Odyssey.
This was built off of a prototype Baer actually built known as the Brown Box in 1967. The
console ended up flopping due to major TV manufacturers and dealers failing to see the potential
of the console and the fact that the Odyssey could only play a handful of games. The rumor that
it was only compatible with other Magnavox products also hurt sales.
The first successful home console didnt come until 1977 with the Atari 2600, known at
the time as Project Stella. Atari built this console to basically capitalize on the success of its first
major hit Pong, released around 1975. The success of the console could be partially blamed on
hits such as Centipede and Adventure.
The 1980s saw a huge crash in the industry, however. With the release of a high volume
of both licensed consoles such as the Intellivision in 1980 and unlicensed consoles such as the
Colecovision and the release of the notorious game E.T, the industry went south, leading many
game companies to go completely bankrupt. This crash lasted until 1985 when the Nintendo
Entertainment System was released and a little character named Mario was introduced.
The NES was actually Nintendos first console and was known in Japan as the Famicom,
or Family Computer System. With this console, Nintendo adopted a strict licensing policy that
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encouraged creative game development and lead to the creation of classic video games such as
Contra. The company, originally a playing card company founded in the late 1800s, continued to
dominate the market with such consoles such as the Super Nintendo, the Nintendo 64 and the
Game Boy.
Sony entered the console war in 1995 with the release of the PlayStation, which was one
of the first consoles to utilize 3D graphics. The use of CD-ROM technology (which was
interestingly enough due to a falling out between Sony and Nintendo) was revolutionary at the
time and moved the industry into a new dimension. It is famous for having groundbreaking hits
such as Final Fantasy 7, Resident Evil, and the EA Sports games. Sonys follow up console, the
PlayStation 2, was one of the first 128-bit home consoles and also was one of the first to allow
for online gaming. Nintendo didnt fully jump onto the online gaming bandwagon until the Wii
was released in the mid-2000s, only allowing for LAN gaming with the Nintendo GameCube.
Microsoft threw its hat into the ring with the Xbox in 2001. This console allowed for
better and faster performance than both the GameCube and the PlayStation 2, its competitors at
the time, and revolutionized online gaming with the introduction of the paid online service
known as Xbox Live and the release of one of the first games to make hardcore games popular,
Halo: Combat Evolved. The Xboxs follow up consoles, the Xbox 360 and Xbox One, continue
to further the popularity of video games and ensure gaming as a mainstay in todays culture.
The late 2000s and early 2010s saw a rise in another aspect of gaming: Mobile gaming.
The smartphones touch screen allowed for new and already established developers such as
Electronic Arts to create games that appeal to an audience that home consoles couldnt normally
reach and allowed for the evolution of the casual gaming market. These games are developed to
be quick time wasters and arent necessarily meant to have the deeper game mechanics more
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tailored to console and PC games. The mobile gaming phenomenon started with the release of
the Angry Birds games and continues to dominate the casual market with free-to-play games
such as Game of War and Clash of Clans.
Our company will adopt the structure of a Limited Liability Corporation, or LLC. This is
one of the most common structures of businesses in the gaming and software industry, as owners
and partners are constantly changing. With an LLC, all debts and responsibilities are borne on
the business itself and there is a lot of flexibility with the ownership, meaning that you could
operate the business as the sole owner of the LLC or use multiple owners like most businesses.
This allows for us to start as a flat structure at first to maintain a close relationship with our
workers and maintain our close knit corporate culture, but be flexible due to the needs of the
industry.
Since we will publish our own games in the United States, we will start off with our main
facility in Richardson, TX. Our means of distribution while we start up will be digital at first, but
as we grow, we could add more distribution facilities to major areas around Texas, and
eventually the nation. Once we have established ourselves locally, we will turn our focus onto
major markets globally, primarily Japan, Europe and Australia. When we globalize, we will
establish deals with existing publishers in their respective countries to publish and ship our
products as efficiently and cost effective as possible.
The first legal issue we will have to face is the process of incorporating. The paperwork
will be filed through the Texas Secretary of State along with any registration fees associated with
incorporating in the state. By law, if our company chooses to be a Limited Liability Corporation,
our name must have a variation of the phrase Limited Liability Corporation in the name of the
company. Fees of incorporating vary among states and filing agents. One of the other major legal
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concerns with a gaming company would be copyright. Games are actually protected under
copyright in the United States, but it varies worldwide. Upon start up, we will be more concerned
over the copyright laws under U.S and Texas law.
Now, for registering for copyright claims for our works could be done in two ways:
Online, through eCO, or by filling out a physical copy of the registration form through the state
of Texas. Since we wont be starting up with very much capital, it will be cost effective to file
online. Whenever we grow our operations overseas, we will register for copyright protection
accordingly.
Our main projects will be games and game engines. However, we would also offer
services such as visual and sound effects for other companies. We will also offer an open source
version of our development kit for users to develop their own games. We will offer a free trial
and a paid version, where we will take 25 percent of any profit the users games make.
Our structure will at first closely resemble a flat structure. This will allow for our
employees to maintain a close relationship with upper management. Also, this flat structure will
also allow for an easier transfer of information through the organization. This will keep true to
our family- oriented corporate culture. What we will have at first will be the CEO, which will
oversee just about everything that goes on in the development process. Then, on a lower level,
we will have a Human Resources manager, which will focus on the workforce development,
legal paperwork, and topics such as employee pay; the Quality Assurance manager, which will
oversee the debugging process of game development; the External Usability Manager who will
be in charge of focus testing and the feedback from play testing sessions; Programming Manager,
who will oversee the process of actually programming the game; And finally, the Manager of
Arts, Concepts, and Designs, who will manage the development of assets such as environments,
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character design, and related concepts. We will also have a Finance and Accounting Manager,
who will provide assistance with handling the finances and accounting systems of the company,
and a head of Public Relations and Marketing, who will oversee the PR and advertising of our
brand and products.

Market Analysis
Our target demographic will be both males and females above the age of 17. Our games
will deal with mature topics. Since we will start distribution through the Internet, we will be able
to reach customers within the region and possibly worldwide. The majority of our customers
would reside in the United States, Europe, Japan and Australia. When the business grows, we
will be able to set up distribution channels both worldwide and locally to supply our customers
with physical copies of our games. Our headquarters will be in Richardson, TX at the time of
startup but will move once the company has grown and can build relationships with efficient and
cost effective distribution channels.
The industry itself is expanding. From 2009 to 2012, the industry has grown over 9
percent, compared to a 2.4 percent increase in the U.Ss GDP. In the state of Texas, the industry
has provided 16 percent of the states GDP. With this increase in the market for gaming comes an
increase in jobs. The expanding industry has added over 150,000 jobs, not even including
workplaces that are indirectly affected by the gaming and software industry such as retailers.
The female demographic is increasing, with approximately 50.2 percent of PC gamers
and 60 percent of mobile players being women. This is partially due to an increase in femalecentric games such as Gone Home, Touhou and the recent Life is Strange game series.
After some closer research and one of the strengths of the business is how rapidly the
gaming industry has been growing, especially over the past few years. This is an incredibly
profitable industry and our company has the potential of earning tons of money. The industry
has grown into a multimillion dollar business, with developers such as Microsoft Studios,

Ubisoft, Nintendo and Sony Computer Entertainment worth anywhere between 5 and 20 million
dollars.
Another strength that we have as a company is our relaxed, friendly, close knit corporate
culture. It has been proven time and time again that happy, empowered employees are motivated
employees, and that it is up to top managers to promote a relaxed, positive work environment.
We also believe that if we are going to allow for creativity and are responsible for the
development of products that give our customers a sense of joy that our company should be a fun
place to work.
The third strength that we found would be our focus on quality over quantity. We do
believe in dedicating time to developing one or two well-crafted products instead of pushing five
or six unfinished games out to retailers as quick cash- ins. The development of games such as the
now infamous E.T, Sonic the Hedgehog and the third installment in the popular Mass Effect
series have taken a hit because of publishers pushing deadlines when there needed to be a lot
more time needed to polish the game.
One weakness with our business actually is due to the industry itself. While it is a
growing industry with TONS of opportunity, there is a huge barrier to entry for newer
developers. For every AAA blockbuster game, there has to be at least ten games that fail to meet
sales standards. According to a recent study, only 1 out of every ten games manage to break
even.
Our dedication to quality could also lead to missing peak sales seasons, resulting in
missing opportunities to gain profits. Most developers release their biggest hits around the spring
and winter seasons due to the high amount of sales. According to a study put out by statista.com,

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total revenue from sales at the end of 2014 was around 46.5 million. A longer development cycle
might mean that we may not have games released during periods of high revenue.
The lax corporate structure could also result in the job not being taken seriously. It is the
highest priority of our higher management to both keep the job fun but keep it professional.
Being too relaxed could possibly result in laziness and slacking off. Managers are required to
ensure that the task is still being done even though the environment might be fun and relaxing.
The first of the three opportunities we found would stem from the industry getting more
and more profitable. While it is hard to break into the industry the same way Infinity Ward and
Treyarch, two of the developers behind the hit Call of Duty franchise, did, the Internet does
provide a way to gain support. A recent trend for most independent developers is to utilize a
program called Greenlight on Steam (which is a program used to play and buy PC games over
the Internet) to build support for their products. We could use this as a tool to put our name out
there as serious contenders in the gaming industry.
Also, another opportunity for us to seize is the raising of capital through the use of crowd
funding. Crowd funding sites, most notably Kickstarter and Indiegogo, have been a hugely
popular way to not only gain support for new games and developers but to also raise capital for
expensive ventures. One of the most popular examples is the in-development game YookaLaylee. According to IGN, this game, a spiritual successor from the same developers who helped
make the Nintendo 64 a hit with the franchise Banjo-Kazooie, was funded completely using
Kickstarter, reaching almost $750 thousand- three times the financial capital needed to work on
the game.

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A third opportunity we could seize would be the creation of games that fit the growing
female demographic. As mentioned earlier, women are getting more and more into video
gaming. Since this is no longer a male-dominated activity, there could be huge potential in games
geared more toward women and feature more non-sexualized female characters. Several games
are slowly adapting to this changing statistic and female-centered games could have tons of
market potential.
The first threat is competition. This is an expanding but incredibly competitive field, and
if you want to be famous and profitable, you are competing with developers who have already
established a name for themselves. You will constantly need to keep in track of trends in gaming
and what type of games are considered marketable.
The next threat is the consequences from having a bad reputation. In order to STAY
profitable, you will need to be in good graces with the community by taking advantages of the
benefits of good press. If the gaming community gains knowledge of any wrongdoing, your
reputation will be forever tarnished. An example of this would be the Plano- based studio
Gearbox Software. A few years ago, it was rumored that this company lied to its potential
customers by showcasing gameplay footage from a game that turned out completely different
from the finished product. There were also allegations of embezzlement and dishonesty with the
publisher it had a partnership with, Sega. This resulted in the loss of profits and good will from
the customers.
The third area of concern would be the risk associated with overworking employees. On
average, around 31 percent of workers have reported to have been working up to 80 hours a
week during crunch time (The time leading up to the release of a game), with approximately 50

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percent of those workers admitting to it having a poor impact on their family and social life. The
over exertion could also be the cause of a lack of productivity, resulting in a decline in quality.

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Market Summary
During our planning process, we were able to find four Ps for our marketing
campaign. They are listed below.

Products. Our products will be mobile games, downloadable games, and physical
retail games. We will also license out our development kit for independent

developers.
Pricing. Our prices, which will be explained later on in this section, will range

from 99 cents to the full retail price of 59.99.

Placing. When customers look for our product, they usually look at places such as
online marketplaces such as Steam or Xbox Marketplace, stores that specialize in
selling games such as Gamestop or most mom and pop game stores, big box
department stores such as Best Buy, or wholesalers such as Target or Walmart.
Our competitors have deals with different suppliers and an active presence in the

online marketplace.
Promotions. A lot of advertising for games actually happens with PR and word of
mouth. We will take full advantage of that, alongside presentations at conferences
such as Gamescom, PAX, and the Electronics and Entertainment Expo, or E3.

We were also able to come up with the pricing of our products, listed below.

Our mobile games, depending on the resources used, will range from 99 cents to

$5.99.
Our downloadable games, depending on the size of the game and resources used,
will range from $9.99 to $39.99.

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Our retail games will range from $19.99 to the full price of $59.99, depending on
the size and resources used for the product.

Our initial promotional strategy will actually rely heavily on word of mouth. A lot of
currently famous developers nowadays get recognition and build good will through this means.
Most of the press built around independent games then accumulates through what are known as
Lets Play videos, or videos of famous YouTube celebrities playing through the games. This is
actually useful, given how tech-savvy young people are. We could use these tools to reach the
younger demographic.
Another important tool to use when we are starting up would be the use of Steam
Greenlight and advertising via social media sites such as Facebook, Instagram and Tumblr.
Steam Greenlight is useful because a huge portion of our demographic uses Steam to play PC
games. Social Media sites are useful simply because we can reach out to a lot of people.
As soon as we grow, we can use expos, conventions, press conferences and special events
to help promote our products even further. Highly specialized events such as E3, Comic Con, and
Gamescom already have the demographic we want to reach as a captive audience, plus these
events help build good will between the company and its consumer base. Nintendo actually hosts
their own press conferences every few months detailing the standing of the company, updates on
whats currently in development, and announcements for new games and consoles.
As soon as we are established, we will use TV to advertise products finishing up
development. This will help get the name out for games that already have some press built up but
can further our good will and showcase game play for those who are still yet to find out about
our product.

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Below is a graph showcasing our forecasted sales.

Revenues for Years 1-3

350
300
250
200
150
100
50
0

Series 1

Series 2

Series 3

Implementation Strategy
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The first thing we will need to do before we can move forward with our business is to
create an operating agreement. This will basically state how we will run our business. After that,
we will need to incorporate with the State of Texas. To do this, we will need to register as an
LLC in the state of Texas. There will be a $300 dollar flat fee associated with this, but this will
provide some necessary ground work needed to form partnerships with various marketplaces.
This should be done within the next four to five weeks.
What we will then need to do is obtain the developers kits necessary to develop for
Android and iOS. We can actually get this done on the same day we file for incorporation, but we
will need to pay for the additional expenses that come with the developers kits. Afterwards, we
will have to register with Steam. This could also be done within a day or two.
After we have been officially incorporated, we will have to gain partnerships with
Microsoft and Sony in order to put our games on their platforms. An estimated time frame for
this would be around one to two weeks, depending on the response time on their end of the deal.
What we will need to submit would be our proofs of incorporation and pay any fees that come
with the partnership. Microsofts newest independent game development program, ID@Xbox, is
free for independent developers. Developing through Microsofts development kit, known as the
XNA, costs roughly 75 dollars a year for their premium services. Then, what will happen is that
we will crowd source our first games through Kickstarter and Indiegogo in order to gain capital
to make our games.
As soon as all that happens, we can start the hiring process. We will at first hire only for
the positions mentioned earlier in the business plan, which could take anywhere between 5
weeks to two months. As soon as enough capital is built and we have already started gaining

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profit off of our products, we will need to rent out a building close to our target location of
Richardson, TX.
After our company is launched, we will keep track of our consumer base using services
such as Google Analytics. We will use social media sites such as Facebook, Twitter, Instagram
and Tumblr to keep in touch with our customers and provide support for our products. We will
also utilize focus groups to provide feedback on the features of our games. This is a popular
means of touching base with potential customers AND finding feedback for quality control
purposes.
For the debugging process, we will use a team whose sole purpose is quality assurance.
What the QA team would be doing for this type of business would be testing out EVERY single
function and aspect of the game as part of the debugging process. We will use the feedback from
the focus groups and QA to ensure that our products are perfect for the consumers needs. The
way that our company will be set up will allow for consistent communication between
departments, no matter how big the company grows.
Of course we will put into effect how our company tracks our profits. We will both utilize
hard copies of our daily, weekly, monthly and quarterly ledgers, income statements, and the
monthly balance sheet and digital versions through the use of QuickBooks in order to ensure
consistency and maintain zero discrepancies between reports. We will then issue public stock as
yet another means to raise capital once our company has grown and to help keep good will
between our company and our consumer base.
Our productivity monitoring will occur consistently and on a daily basis. This will ensure
that our employees are putting forth the best effort possible in our games and will help build our

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reputation as a company that will make high quality products, as it is our belief that games
should not ship without bugs or polish- too many companies have fallen because of poor quality
and productivity monitoring procedures.
We will also put into place tight security measures in order to maintain integrity as a
quality in our employees. With the advancement of technology, it has become far too easy to leak
information, and we will also use strict punishment for employees who fail to comply with our
standards.
Our finances will be recorded and reported on a daily, weekly, monthly and quarterly
basis to keep up to date with our profits and losses, control our liabilities and expenses, and
maintain good will with the public. Making our profits and losses public allow for us to maintain
an image of honesty and transparency, especially in an industry where rumors of embezzlement
and misuse of funding run rampant. This could help increase our customer base due to the
increase in good will.
Lastly, we will allow for our monitoring processes to be changed should our
implementation fails. We do believe that planning is only half the battle, and that following
through is the toughest part. Many successful businesses have made changes to their monitoring
processes as technology increases and many processes get outdated. Businesses also fail due to
not keeping up with the times, meaning that they do not keep-to-date with advances in
monitoring techniques. We will review our results to see which processes work and which ones
do not, allowing us to make changes whenever necessary. Reviewing our tactics will allow for us
to catch errors and early warning signs and allows for corrective actions to be taken before
problems grow worse.

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Financial Statements
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Below are some financial statements, constructed using data from research. Here is a
projected Profit-And-Loss statement.

On the next page is a projected balance sheet for the first year of operations.

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Financial Statements Analysis

Most of these statements are assuming that we are using our advertising strategies
efficiently during the first year. Our sales do start out slow during the first year, based off the
trend of gaming companies starting out the first time, but eventually grow as we become more of
a bigger presence in the gaming industry. Again, this is assuming that we are using our word of
mouth advertising efficiently and we are able to get a quality product out to market. Our
projections are also assuming that our games are at the market at the proper timing where our
products can be easily differentiated from what else is being sold at the time. We also assume
that the loans taken out on the first year are paid on time, with interest expense.
With these basic assumptions, we were able to provide an incredibly profitable projection
at the end of the first year. The total assets after the first year are, after the expenses and
depreciation are subtracted, are equal to $326,501.50. Owners equity and liabilities after the first
year are also $326,501.50.
As the company grows in the future, we will need to consider taking out loans as the
budget for our games get larger and larger. However, should our business be as profitable as the
statements imply, any loans taken out should either be small or paid back in a shorter amount of
time. However, to help with our business starting, we will need to take out a $100,000 loan, just
to hit the ground running if we want to push a high quality product out to market as our first
game.

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