*Stalingrad

*Market Analysis

MARKET RESEARCH• Russian market of video games is the

largest market in Central and Eastern Europe. Income from Computer game sales amounted to U.S. $ 1 billion in 2010.

• PC games and online gaming occupies 72% of the market share in the video game industry. (PC Orientated game market)Source: PWC research of the

entertainment industry and mass media forecast in Russia 2011-15

MARKET POSITIONING• Free to play online PC game (F2P)

• Why free? 1. Piracy 2. Popularity of F2P in russia

• Micro transaction Model: 53% of Russian active gamers spend money on game (Source: PWC)

• Target Audience: Young Male Teenagers and adults. Age group which has the highest ownership of PC and experience of online gaming in Russia

MARKET STRATEGY

Marketing Objective : 60k new players in the first 6 months (Projected from Metin 2, a fantasy F2P game in Eastern Europe). 10% growth every month after first 6 months.

Long Term Marketing Effort : Marketing Budget of 20% of expected revenue. Budget adjusted accordingly to market performance

Pre-Launch Launch Launch + 6 months

Launch + 12 months

0

10

20

30

40

50

60

70

80

Marketing Budget

Budget

Pre-launch

--- Leverage on popularity of social media in Russia

• VKontakte.ru (Russia’s Facebook) ---- Pre-Launch Group Page, Video banner advertisement, Targeted advertisement, Preview clips of Game

• Rutube (Russia’s Youtube) ---- Game production video, Viral videos

--- Advertisement on selected gaming magazines.

--- Sponsored Review and Preview of game on popular Russian gaming website.

--- Launch of Game website. Invitational keys for free demo version

Launch

--- Countdown Launch Party

--- Distribution of Demo Game CDs in game stores, shopping centres etc

--- Increased advertising on online and print media

--- SEO: Search engine optimization. Increase traffic and publicity of our game webpage.

Strength- Unique game play and elements- Free to play is an incentive for

players- Social Media advertising

Weakness- Competition from other free to

play games

Oportunity

- Mature market of online gaming- Growth of the russian game

market is projected to be fueled by free to play games .

Threat- Financially dependable on

willingness of players to make in game purchases

BOA

SWOT ANALYSIS

COSTS and REVENUE

*Project Budget

*The Stalingrad Team• 1 Producer/Designer/Project Manager – Salary of USD25000 annually-Manage project development schedule-Design game system-Design skills/weapons/maps

• 1 Lead Programmer – Salary of USD22000 annually-Implement game play mechanics required for the game-Work on the required network programming

• 1 Programmer – Salary of USD20000 annually-Implement user interfaces designed by artists-Program tools to assist artists in implementing created assets into the game

• 2 Artists – Salary of USD20000 annually-Create 3D models required for the game-Create animation, effects, environment-Design UI-Design concept art and art for required for marketing

Operating Costs (USD)  Year 1 Year 2 Year 3 Year 4 Year 5Staff Salary

1 Producer/Designer/Project Manager 25000 25000 25000 25000 25000

2 Programmers (1 programmer after 1st year)

48000 24000 24000 24000 24000

2 Artists (1 artist after 1st year) 40000 20000 20000 20000 20000Software CostUnity 3D Pro engine license (One time USD1500) with support (USD 500/month)

7500 6000 6000 6000 6000

Music License (USD 89/month) 1068 1068 1068 1068 1068

Modeling / Programme Software License (One time payment cost of USD1000) with possible upgrade (USD500)

1000 500 500 500 500

Other software licenses 1000 1000 1000 1000 1000Hardware Cost5 X Computers (USD1000) / Equipments (Average USD1000 per year)

10000 1000 1000 1000 1000

Game Server (USD0.89/Slot) with speculated 50K player per month from year 2 onwards

0 44500 44500 44500 44500

Marketing Cost

Social Media (Facebook, Twitter, Blog) for 10000 click per month for 1st year for all social media sites with USD0.20 per click

50000 30000 20000 10000 10000

Web Media (Website, SEO, Community Forum)

1000 1000 1000 1000 1000

Distributors (Eg Steam, Amazon) with one time payment about USD100 entrance and average 10% transaction fees

25000 25000 25000 25000 25000

Miscellanous CostOffice Rental in Moscow (1989 Area Sq M)

5880 5880 5880 5880 5880

Utilities 4800 4800 4800 4800 4800Total/Year 220248 189748 179748 169748 169748

*C

om

pan

y

Sp

en

din

gs

*Monetization

• Inventory purchase• Better Maps• Elements• Skin• Skill and stat points

*Revenue Estimates

A: Active Users --- How many players you have visiting your game's online storeB: Attach Rate --- How many players bought stuffC: ARPPU --- Average revenue per paying user

A * B * C = Revenue.Projected revenue per month: 10k players * 0.20 attach rate * USD 10 per paying user = USD 20K monthly and USD 240K yearly in revenue.

BreakEven Analysis (USD)Reven

ueCost Profit

Capital-Profit

TimeFixed Cost

Total cost

0 220248 -220248 29752 1 250000 470248

240000 189784 50216 79968 2 250000 189784

260000 179748 80252 160220 3 250000 179748

280000 169748 110252 270472 4 250000 169748

280000 169748 110252 380724 5 250000 169748

0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.50

50000

100000

150000

200000

250000

300000

350000

400000

CapitalCapital-Profit

Year

Mon

ey

*BreakEven

Analysis

*Questions?