Executive Summary
Per Ludum is a game development company that will work on an independent basis, meaning that it would not involve the publishers’ support. The studio will produce digital video games that are interactive adaptations of various literature works. The company’s target market would be North American people from 14 to 30, one of the most high-paying public of video games. The company is situated in Downtown St. Petersburg, Pinellas County, Florida. Its office will be open for business meetings with investors and weekly or monthly briefings with employees. Apart from these meetings, most employees enjoy remote work, which is also advantageous for the economy of resources. The firm’s strengths lie in the unity of its individual members who work separately and yet with a common goal. The extensive freedom of the employees might be perceived as a weakness, yet, if managed effectively, it might produce beneficial results.
The video game industry is exponentially growing with large revenues and low-cost entry expenses. This fact allows assuming that there is an opportunity to easily penetrate the market with new products. Moreover, each product can become popular among customers because of its unique design or narrative. The company’s team involves managers, designers, visual and sound artists, and programmers. Some of these people can work from their homes with their equipment and software and even participate in other firms’ projects. However, there are responsibilities and deadlines that these employees to which should adhere and respond to. These people are professionals in their spheres, so their united work will produce unique products that would enlarge the company’s proprietor and investors’ revenues. Since the studio is independent, it requires a minimum startup cost, almost all of which can already be paid by the proprietor. The business seems to be profitable due to the growth of the industry and the recent technological advancements made highly available and cheap.Mission
The mission of Per Ludum is to provide the North American public with a quality interactive narrative on cultural and historical topics. The stories of American and classical writers deserve new interpretations through a new, creative form such as video games. Thus, Per Ludum aims to satisfy and implement the desires of video game players to see their favorite narratives in visually appealing and technically advanced games. The players may open the opportunity to immerse into the atmosphere of the books more deeply and perceive the sense of the imaginative worlds in their personal experience.
Vision
The vision of Per Ludum is to enrich the cultural and intellectual experiences of the North American players through the help of interactive narratives or video games. Per Ludum desires to provide excellent products that contain not only entertainment value but educational opportunities as well. Moreover, the company is open to collaboration with starting writers who want to gain attention to their literary works.
Objectives
The company has several goals to achieve in the first years of its existence. First of all, Per Ludum aims to enter the market with a distinctive advertising company, attracting its target market and producing high-quality products. Next, the publishing of the first game is the primary concern of the enterprise since it marks its first revenue and the other image. Finally, the company aims to pay off the debts and shares of its investors to continue to work independently in the three years of work.
Business Description
Per Ludum will be an independent video-game developing company that will produce high-quality digital products for a medium-sized audience. Namely, Per Ludum studio will work as a small team of creative specialists to design concepts, create specific game design solutions, and produce art, sound effects, music, and voice-over to complete ready-made video game projects. Moreover, the marketologists will create advertisements for its projects and guarantee its successful sales and distribution.
The company will be located in Downtown St. Petersburg, Pinellas County, Florida; however, some workers of the company come from other states and work remotely. Hours of operation will be Monday through Friday, from 10 am to 4 pm; yet, most employees, such as artists and voice actors, can choose an individual schedule. The department that always functions through mentioned hours is marketing. Finally, Per Ludum will start with a sole proprietorship with the potential of upgrading to a corporation in fifteen years. Apparently, there is a possibility and a need to acquire a partnership after several projects are done.
Product Overview
The product that the company will create and distribute will be outsourece video games which plot is based on existing classical or recently published books from authors of different proficiency levels. Precisely, the produced video games will be interactive stories with a strong narrative and authentic, ingenuine visuals. The product will satisfy the customer’s desire to immerse into the plot of the renowned and newly discovered stories, experience the characters’ emotions, and fulfill some ideas about the book’s endings. The games will be distributed through Steam, the most popular and affordable for individual developers’ game market. Thus, the customers might access the games easily through their online accounts in the service. In the future, the Per Ludum will employ its independent writers who would write the books and plots individually for the company. As a result, there would be an additional product for sale—print books.
Personal SWOT
Strengths
Per Ludum offers quality product creation and highly skilled cross-platform video game project creation and development. Thanks to the small size of the studio staff combined with its high professionalism and the wide profile of activities, the studio are capable of long-term development. Specializing in the development and design of outsourcing projects, a team of developers, narrative designers, illustrators, and programmers ensures fast and high-quality creative planning and project implementation. The company has the resources for expansion, a team of strong specialists, and the flexible form of an independent development studio, which gives it creative freedom and access to quality execution. Thus, the strengths of the company are in its flexibility and competence.
Weaknesses
It should be understood that the studio often tends to avoid orders that have too wide freedom of execution due to the danger of excessively long work on the project. Perhaps such issues may be perceived skeptically at first glance, but it should be borne in mind that the company considers them in its development plans and will resolve them in the future. Such confidence in resolving studio issues rests on the competent and creative members of the company, whose team is confident in their abilities and the company itself is confident in them. Of the negative features of the work process itself, it is important to consider that the presence of a free schedule and deadlines leads to some employees doing the work out of time. Many team members are attracted by the freedom to allocate free time, work from home, and creative freedom. This implies the fact that some of the employees are not in the mood for frequent social contacts, which can make brainstorms and meetings a little complicated and delayed.
Opportunities
The development of new technologies in the process of manufacturing new products and their components offers new opportunities for the market in general and the studio in particular. For example, the release and development of a new version of the game engine Unreal allow one to implement bold projects from a technical point of view, spending much fewer resources during production. In general, the trend of technology development and the increasing availability of tools and resources for developers speaks of an optimistic future for the industry.
Threats
The main threat to the company is redistributing the interactive entertainment market towards large-budget projects and strict regulation by large corporations. Intense competition with large businesses seeking to aggressively take over small studios can pose a serious threat as the company’s assets grow. The specificity of the sphere, which is constantly changing trends and tastes of the audience, also influences, but the creativity of the team and the willingness to experiment with innovative methods give favorable forecasts for the future.
Market Strategy Analysis
Notable competitors in the indie development and publishing market include Devolver Digital, 11-bit studios, and Paradox Interactive. While occupying the same market as Per Ludum, these big developers and publishers still have key features that are both strengths and weaknesses. Devolver Digital covers many areas and niches within the game development market, but their love of risky and experimental projects often results poorly. On the other hand, 11-bit studios specialize in creative projects with a very dark design, gameplay, and narrative, which often negatively affect sales. The most notable among the competitors is Paradox Interactive, which specializes in niche genres such as grand strategy or simulation and management games, as well as role-playing video games. As a rule, the audience of Paradox consists of paying fans of the genre, which on the one hand, pays off projects, but on the other hand, slows down the development of the studio.
Industry, Competitors & Business SWOT
Before evaluating the strengths and weaknesses of Per Ludum in comparison with competitors, it is worth looking at it from the perspective of the game development market. In general, the market has several positive and negative features, where the former include flexibility and high margins, usually around 83%, which is a fairly high indicator. The negative aspects of this area are a longer sales process for which it is important to plan and predict a longer conversion funnel and the high cost of providing employees. The threat to the market is the link between development and technical equipment, such as graphics cards and processors, the market of which sometimes falls into crisis peaks, affecting the development sector. In general, the market has great prospects for expansion and scaling due to the loyalty of the old audience and the constant influx of a new one, and the importance of modern culture. Based on this, it can be understood that in comparison with other studios, Per Ludum has several advantages. The studio’s projects are aimed at a wide audience while not losing the creative design of the product and the emotional connection with the player, which sets it apart from the background of 11-bit studios.
Unlike Devolver Digital, Per Ludum does not have wide audience coverage, focusing primarily on a well-defined target audience. This allows for more accurate forecasts of sales and changes in customer and market sentiment. This approach makes the studio similar to competitors from Paradox. However, Paradox Interactive focuses on almost one main genre and a very narrow but paying audience. Per Ludum, in turn, has a more flexible approach and a broader approach to products, which gives the company several advantages in the market compared to Paradox. In other words, despite internal issues, in the interactive entertainment market itself, Per Ludum has a wide range of advantages over its competitors.
Target Market
The audience of the firm is extremely wide, embracing people aged 14 to 35, whose ability to pay is also distributed in the spectrum from small to stable and large. A wide range of game genres and multi-platform development allows the studio to produce products for both young audiences and young and middle-aged people. Multiplatform also allows you to cover parts of the audience that are different in terms of paying capacity. As a rule, the widest market is the mobile games market, and the narrowest one is the console one. Marketing aimed at different segmented parts of the target audience will promote the product to the required audience. Certain genres, such as simulation and management games, give the company the ability to quickly assess changes in the genre and the needs of the players for the prompt implementation of new features in the projects being developed. The target audience also has a certain regional binding based on the genre and market characteristics. In the case of Per Ludum, the target audience consists mainly of residents of North America.
Marketing Mix
The main products of the studio are multi-platform casual and light-level games that target a wide audience. Their price varies from the size of the game and the platform. For example, the cheapest sector of products, mobile games, costs $ 4.3 to $ 5. Games for PC and consoles are higher due to the size and cost of development, which results in prices ranging from $ 15 to $ 35. This approach to pricing and platforms allows for more flexibility in collecting audience data and engaging as many people as possible. Based on this, marketing targeting is calculated, for example, simple native advertising integration in mobile applications for the mobile sector. For the console and PC product segment, advertising is aimed at influencers who are popular with the target audience, at integration in their materials, as well as direct advertising on social networks and with
Organization and Management
The structure of the organization includes several related hierarchical levels and departments. The highest job position is that of a CEO, who, at the same time, is a proprietor of Per Ludum. The CEO oversees the operating system of the company as a whole, supervises each department, and decides the financial matters of the company. This person should be proficient in business and economics and specifically the video game industry. The department that relates to the CEO is that of marketing. In the marketing team, a marketing director supervises the actions and initiatives of a product manager, PR manager, and advertising director. The team is involved in creating strategies for the effective promotion and distribution of the company’s digital products.
The other part of the organization, programmer and designer employees, is responsible for the core processes of creating the product. Namely, a lead designer assists the CEO in the supervision of the studio and develops the concepts for further work. Next, a team of game mechanics designer, level designer, and narrative designer create the interactive, environmental, and storytelling parts of the products. Furthermore, the programmers led by one person compile the technical aspects of video games to adjust them to certain engines and make the systems of the products accessible to the buyers. Thus, these employees should be high-quality professionals who can guarantee the technical and conceptual integrity of the products.
The final division of the employees is art specialists and sound designers. Precisely, the company will employ several game artists who would supply the conception art, 2D frames, animations, and 3D objects if needed. Since the company specializes in visually-rich games, the works of these people are highly appreciated. Additionally, an art director will try to direct the artists so that their efforts deliver consistent results. Moreover, there will be composers and voice actors in the studio to enhance the quality of the products and make them more immersive. Consequently, a sound engineer oversees their work. Both divisions can have individual graphics since their continuous presence in the studio is unnecessary and does not help their work. In this manner, the departments can produce their input into the whole process of creating the most effective.
Organization’s Culture and Management Style
As was said earlier, some of the workers might have individual schedules and work from home if this seems comfortable with them. Such a decision is determined by the management theory that the company views as the most productive practice. Namely, Systems Management Theory considers employees equally important parts of the whole enterprise that should work according to their functions (Corporate Finance Institute, 2019). That is why the company allows all these people who need to work remotely to do it in their way. However, there are briefing meetings that should gather all the department members that were invoked. The CEO, managers, and lead employees are responsible for effective communication between the employees. There is no need to locate them all in the office at the same time. Therefore, the office is rather a company headquarters than the place requiring all workers’ visits.
Although the organization and management style might seem chaotic to an outsider, there are several requirements for work that should be considered vital. Per Ludum adheres to the philosophy of social responsibility, so that one of the primary functions that the company operates is benefiting society (Stobierski, 2021). Precisely, the studio produces entertainment content and art and culture products that reflect the values and interests of modern society. Therefore, the company aims to employ workers who are professionals not only in their specific fields but also in the humanities.
Financial Plan
Independent video game development studios are financed differently than average enterprises and even video game studios in general. The distinction lies in the fact that studios of such kind demand fewer resources and employees than large companies. Moreover, the employees can engage in other projects and work for the company only part-time since it is enough for sustaining the manufacturing process of a digital product. Despite the fact that the company does not function full-time and requires a minimum of resources, its output might gain considerable attention via correct marketing and quality of the product. Additionally, an important distinction of independent studios from traditional ones is that they rarely work with excessively expensive publishers. The general use of distribution market Steam makes it easier for the developers to sell their products with a minimal amount of costs. Thus, even modestly financed studios like Per Ludum have the potential to gain significant revenue.
Investment Request & Startup Cost
However, there is an issue of the game development industry that affects the financial part. Namely, the revenues can be gained only after a game is produced. Certainly, there is an opportunity to publish early-access products, but new firms make these propositions free to attain future customers. Then, the first gains are obtained after a long period of creation which on average takes from six months to a year. Per Ludum plans to publish an early-access version of a game to gain attention from potential clients and to finish the version of a game for sale in seven to eight months. Thus, first, revenues can be earned from donations of awaiting customers who would purchase pre-orders and then from the sales of the completed product after its publication.
Yet, the process of creation demands initial expenses, at least in one-time investments. These expenses include technology equipment, IT support, CRM software, and program development costs, among the most expensive. The total start-up cost of Per Ludum amounts to approximately $6,847, including the payment for the first-month rent. Fortunately, these expenses can be almost completely covered by the savings that the proprietor aims to invest. Besides, there is a possibility to gain access to credit for expenses that savings cannot pay. Support from investors could be useful in the matter of monthly expenses rather than long-term ventures. Additionally, some money for expensive equipment can be saved if the proprietor hires employees who already possess the equipment and software. There is a significant chance that this is the case. Thus, venture capital exists, and a missing part of the budget could be attained from getting credit.
Operational Expenses
Finally, there are monthly operational expenses that could be paid through financial support from outside investors and banks. These expenses include the rent of the office that should be run as a place for briefings. Certainly, it requires only a modest service since meeting in the office will not often be conducted. Yet, the firm should pay for electricity, internet, software licenses, and else. It is possible that external investors would guarantee help with these expenses and salaries for the workers. After the revenues from publishing the first product are gained, the company can pay off these expenses. In this way, it is safe to assume that the company’s financial success depends on the proprietor’s savings, the smart use of resources and services, and promotions.
Conclusion
Per Ludum has a perspective view of the market opportunities for producing video game products for the North American population. Its mission is to create narratives that could be accessed through imaginative visuals and sound to immerse the players and bring their attention to cultural and historical knowledge. The company will produce adventure games based on literature works of classics and modern writers. Its core competitive advantage lies in the low-budget opportunity of resources distribution and uses and producing high-quality products due to the technical availability for manufacturing. Moreover, numerous materials can be adapted and presented to the market through a concise marketing strategy. Thus, the creative approach and the economy of resources being its key characteristics, it promises significant revenues for its proprietor and investors.
References
Corporate Finance Institute. (2019). Management theories. Web.
Per Ludum monthly expenses. (2021). [Graph].
Per Ludum monthly revenues. (2021). [Graph].
Per Ludum organizational chart. (2021). [Diagram].
Per Ludum start up costs. (2021). [Graph].
Stobierski, T. (2021). Types of corporate social responsibility to be aware of. Business Insights. Web.