Anzah Mustafa

CHINO GAMER -1- BUSINESS PLAN CONTENTS CONFIDENTIALITY/EXCLUSIVITY................................................................................................................ - 4 DISCLAIMER............................................................................................................................................... - 4 ABBREVIATIONS ........................................................................................................................................ - 6 EXECUTIVE SUMMARY .............................................................................................................................. - 7 WHAT IS “CHINO GAMER”? – AN INTRODUCTION ................................................................................... - 7 MISSION & VISION .................................................................................................................................... - 8 GOALS AND OBJECTIVES ........................................................................................................................... - 8 PRIMARY GOALS AND OBJECTIVES: ...................................................................................................... - 8 ECONOMIC GOALS AND OBJECTIVES: ................................................................................................... - 8 OPERATIONAL GOALS AND OBJECTIVES: .............................................................................................. - 9 MARKETING GOALS AND OBJECTIVES: ................................................................................................. - 9 FINANCIAL GOALS AND OBJECTIVES: .................................................................................................... - 9 GROWTH GOALS AND OBJECTIVES: ...................................................................................................... - 9 BUSINESS PHILOSOPHY ........................................................................................................................... - 10 ECONOMIC HIGHLIGHTS – ...................................................................................................................... - 11 GLOBAL STAGE .................................................................................................................................... - 12 LATIN AMERICAN STAGE ..................................................................................................................... - 13 MEXICAN STAGE.................................................................................................................................. - 14 COMPETITOR’S ANALYSIS ....................................................................................................................... - 15 PLAYERS OF THE GAME – INTERNATIONAL SPECTRUM ..................................................................... - 15 BRAND’S VALUE .............................................................................................................................. - 18 REVENUE ......................................................................................................................................... - 18 PLAYERS OF THE GAME – LOCAL SPECTRUM...................................................................................... - 20 EARNINGS: ...................................................................................................................................... - 22 COMPETITIVE ADVANTAGE................................................................................................................. - 23 MARKETING PLAN AND STRATEGY ......................................................................................................... - 25 MARKETING ANALYSIS – A SHORT GLIMPSE ....................................................................................... - 25 MARKETING PLAN ............................................................................................................................... - 26 THE AUDIANCE ................................................................................................................................ - 26 THE CHANNELS ................................................................................................................................ - 26 THE INFLUENCERS ........................................................................................................................... - 27 THE EVENTS ..................................................................................................................................... - 27 PARTNERSHIP WITH BRANDS .......................................................................................................... - 28 - -2- BUSINESS PLAN MONETIZATION STRATEGY ................................................................................................................. - 29 FRANCHISING .................................................................................................................................. - 29 MEDIA RIGHTS................................................................................................................................. - 29 FAN PAYMENT MODELS .................................................................................................................. - 30 SPONSORSHIPS AND ADVERTISING ................................................................................................ - 30 PRIZE MONEY .................................................................................................................................. - 30 MERCHANDISE SALES ...................................................................................................................... - 31 CONTENT CREATION ....................................................................................................................... - 31 OPERATIONAL PLANS .............................................................................................................................. - 32 HUMAN RESOURCES ........................................................................................................................... - 32 HIREARCHY .......................................................................................................................................... - 33 SALES FORECAST ..................................................................................................................................... - 34 FINANCIAL HIGHLIGHTS .......................................................................................................................... - 35 ASSUMPTION ...................................................................................................................................... - 35 INCOME STATEMENTS (STATEMENT OF PROFIT & LOSS)................................................................... - 37 BALANCE SHEET (STATEMENT OF FINANCIAL PERFORMANCE) ......................................................... - 38 REFERENCES ............................................................................................................................................ - 39 - -3- BUSINESS PLAN CONFIDENTIALITY/EXCLUSIVITY The Business Plan (hereinafter will be referred to as “Report/report” shall be provided as exclusive and confidential submissions to the management and employees of the Chino Gamer (hereinafter will be referred to as “Company”) and its affiliates. These should not be used, reproduced or circulated for any other purpose, whether in whole or in part without our prior written consent, which will only be given after full consideration of the circumstances at the time, other than, potential investors, co-investors, advisors, investee companies and related companies who have entered into a nondisclosure agreement with the Company. The Company will not be held responsible for the reliance on information placed by any third party in the event of disclosure of such information by the Company to any such party. The Consultant will provide the advisory services on an exclusive basis to the Company and the Consultant shall not engage, either directly or indirectly, in any business or professional activities, which would conflict with the activities assigned under this assignment. The Consultant shall not, either during the term or after the expiry of the services noted in this letter, disclose any proprietary or confidential information relating to the assignment without the prior written consent of the Company, unless such a disclosure is required by law or regulation or such information has entered the public domain other than through breach of these terms. -4- BUSINESS PLAN DISCLAIMER The Consultant will exercise all reasonable and proper skill and attention necessarily required to discharge its duty of care to you (the Client) within the parameters of the agreed scope of work. -5- BUSINESS PLAN ABBREVIATIONS The abbreviations used in the below mentioned plan are stated as under: Abbreviations -6- PC Personal Computer CAGR Compound Annual Growth Rate BIR Brand Investment Revenue LAN Latin America North EXECUTIVE SUMMARY The business plan outlines the launch of an Esports brand under the name of “Chino Gamer”. The venture requires around USD 600,000 in start-up funding. The highlights of this plan are the targeted gross margins and sales-revenue. These targets are attainable through a proactive approach to the candidacy of clients, teaming up with technology providers, and partnering with different suppliers to reduce competition, improve pricing and reduce risks. It is expected to generate positive net earnings in the first year of operations. The data in this business plan concludes the general description of the business followed by Economic highlights giving brief introduction of the economy in which the company will operate, a Competitor’s Analysis stating the position of competitors and their market shares, a Marketing plan stating marketing budget and related marketing strategies helpful for a startup to maximize profit share, an Operational Plan discussing Burst’s, organizational hierarchy and human resource deployment. We are sure that the business will be able to fill the hole in the edible industry and will add value towards the community at large. Moreover, this business plan covers a comprehensive Financial Plan which includes financial projections for 5 years and breakeven analysis which will not only help Burst but will also provide an insight to investors regarding the financial standpoint of the organization. We feel that Burst is uniquely positioned to profit from changes in the industry, and we feel that our company can continue to leverage the expertise we have gained into higher levels of profit and customer satisfaction. WHAT IS “CHINO GAMER”? – AN INTRODUCTION Chino Gamer is a brand involved in E-sports activities across Mexico. The biggest aim is to contribute towards the enhancement and establishment of E-sports industry in Mexico. Chino Gamer will be associated with two sub brands of its own i.e. LA Zona and M27. LA Zona will be recognized for conducting E-sports League sessions throughout the whole year while M27 is Chino Gamer’s own E-sports team. Players from the best of the best will be identified and put onto their roster so that the whole of the world can witness M27’s masterpiece contributing towards reshaping the E-sports industry. How will Chino Gamer reshape the industry? It starts with their quality league sessions, respecting and generating the goodwill around their team players, and meeting up to the benchmark of satisfaction as perceived by their audience. -7- BUSINESS PLAN MISSION & VISION Chino Gamers’ mission is all about providing a local Mexicans gamer an opportunity to showcase their talent and be eligible for international recognition. For this, starting with only one league and team brand is perfect mix. Contributing not only towards the betterment of the E-sports industry but also towards the economy is Chino Gamer’s mission headline. As for the vision, the higher management has set various expansion and growth benchmarks. Chino Gamers will always be remembered for not only being financially sustainable ( i.e. being operational in coming future) but will also provide extravaganza of opportunities to gamers. Chino Gamers will be a brand name of trust worthiness, loyalty and high standard ethical & social values. GOALS AND OBJECTIVES Accomplishment of entity’s goals and objectives is the only way to ensure that performance targets which were set by the higher management are being met and the organization is moving in the right direction. By keeping such ideology in view, Chino Gamers has set its goals and related objectives, details of which are mentioned below: PRIMARY GOALS AND OBJECTIVES: There are Five primary objectives by which success of Burst will be tracked: ❖ Maintain 100% existing players base by providing consistent salaries and performance bonuses; ❖ Produce and provide exceptional quality content to maintain existing viewer base; ❖ Expand customer base through conducting local competitions and providing lucrative winning prizes to participants; ❖ Expansion of products lines by considering customer’s needs and wants i.e. opt for customized merchandizing; ❖ Promote good values of company culture and business philosophy; and ❖ Selection of such marketplaces which are prominent and easily accessible for customers. ECONOMIC GOALS AND OBJECTIVES: Chino Gamer’s top economic goals and objectives are stated hereunder: ❖ Remain economic sustainable business rather take a short dip into the industry and exit without completing life cycle; ❖ Increase employment rate by creating/providing job opportunities to the potential players living in the connected areas; ❖ Make efforts to promote economic acceleration; ❖ Align Chino Gamer’s economic policies with those of country’s economic policies and timely adapt to any change in nationwide policies; and -8- ❖ Being a responsible citizen and empower youth for reliable economic development. BUSINESS PLAN OPERATIONAL GOALS AND OBJECTIVES: Chino Gamer’s key operational objectives are stated hereunder: ❖ Providing local team players with infrastructure capable enough to maximize their performance abilities; ❖ Have state-of-the-art PCs for M27 players so that they could outperform their opponents.; ❖ Having a M27 player from distant area, should be provided be reasonable housing options; ❖ Operate at both economies of scale (EOSL) and economies of scope (EOSP) to maximize long-term profits; and ❖ Facilitate team players with efficient post-employment services plan i.e. health insurances, severance benefits, gratuity payments and provident fund contribution. MARKETING GOALS AND OBJECTIVES: Key marketing goals and objectives are presented as under: ❖ Adoption of sound modern and technological online marketing techniques; ❖ Application of market segmentation principles and adhere with industry wide acceptable marketing policies; ❖ Adopt means to improve Chino Gamer’s brand name, generate good will and enhance customer loyalty; ❖ Make use of free social media forums such as Facebook, Twitch, YouTube, Twitter, Instagram and Vimeo to promote brand name; and ❖ Adherence to ethical marketing standards and industry wide acceptable policies. FINANCIAL GOALS AND OBJECTIVES: Key financial goals and objectives are presented hereunder: ❖ Adopt Accounting/Bookkeeping software for sublime and error free book-keeping; ❖ Compliance with mandatory regulatory and auditing requirements; ❖ Preparation of monthly Management Accounts; ❖ Avoid unnecessary expenditures. Promote the concept of Intelligent spending by careful assessment of business needs and wants; ❖ Become a diversified investor in future to ensure Chino Gamer’s going concern’s ability; and ❖ Present accounting records to state officials for assessment of correct value of tax. GROWTH GOALS AND OBJECTIVES: Key growth goals and objectives are presented below: ❖ Player centric approach, competitive gaming, reach to diversified gaming platforms; and everything contributing towards building a brand to which gaming fans can relate to; ❖ The objective to establish a national brand in Mexican market within 5 years of initiation of operations; -9- BUSINESS PLAN ❖ Strive to offer our local customers efficient and most flexible services in the entire class of business; and ❖ Contributing towards the betterment of community by fulfilling corporate social responsibility i.e. in shape of providing E-sports opportunities to college student, sponsoring education of young ones, or providing them part time job opportunities so they can afford a better life style. BUSINESS PHILOSOPHY Chino Gamer is based on the philosophy that a player-centric e-sports brand should be introduced so that the Mexican community could be represented on different sporting platforms. The short-term objective is to be prominent among local competitors. That’s why a regional league brand has been established. It will not only promote Esports but will increase local customers, fans and players base. The long-term objective is to provide local/national players an opportunity to represent their country at international stage by competing against international teams. The vision would be to dominate the entire Latin American region and afterwards win the world’s biggest E-sports title. - 10 - BUSINESS PLAN ECONOMIC HIGHLIGHTS – Economic conditions are indicators for a startup to realize its strategic position in the industry. If such conditions are realized properly, then a business can assess the impact of its core competencies which it will have on its consumers. If we are to take a global overview of E-sports industry w.r.t year 2020, we see that almost 7,794.8 Million people are connected with this industry. Among such humongous population, 2.222.9 Million people are E-sports enthusiasts and therefore, E-sports have generated $1,100.1 Million revenue in the running year. Some of the other prominent stats are given hereunder: - 11 - BUSINESS PLAN GLOBAL STAGE Considering E-sports industry, with passage of every year, there is a massive shift in revenue, audience base and market share. In Year 2019, The Global Games market showed a net revenue of $152.1 Billion across the globe. This revenue was reportedly 9.6% greater than the revenue reported in year 2018. Here it is to be noted that Asia Pacific being the biggest region in the gaming world generated $72.2 Billion. Considering Latin America being the smallest gaming region generated almost $5.6 Billion. The biggest fact to be noted here is Latin America showed the biggest % increase of 11.1. being indicative of the potential Latin American market has in E-sports. Not only revenue is increasing, but viewership and audience base is also increasing with every year. If we look at the stats in year 2016, there were 161 Million viewers were just occasional viewers while 162 Million viewers were E-sports fans. In year 2017, 194 Million viewers were occasional viewers while 191 Million were enthusiasts. An increase of roughly 15% was observed in between these two years. Such 15% was observed as consistent increase in global viewer base and considering the statistics in year 2019, 264 Million were occasional viewers while 252 Million were the enthusiasts. CAGR of 15.4% was precisely followed and in year 2020, we can see the global - 12 - BUSINESS PLAN viewership rose up to the total of 589 Million among which 286 Million were enthusiasts and rest were occasional viewers. LATIN AMERICAN STAGE Revenues in Latin America are growing rapidly. Considering the growth rate of such revenue is the reason why a new startup such as Chino Gamer is looking to enter into the market and have piece of that pie as well. Back in 2017, Total revenue generated by Latin American E-sports brands was aggregated to be $40.3 Million. An increase of 87.9% of the total revenue increase was observed from year 2016. Moving forward, in year 2018, an increase of 28.6% was observed and there after CAGR of 23.2% was observed in both year 2019 and 2020. According to a latest survey conducted by Newzoo.com, CAGR of 23.2% will also be observed and in year 2021, total revenue of $95.8 Million will be observed. Out of which $55.6Million will be Media Rights, - 13 - BUSINESS PLAN Advertisements, Merchandising, Tickets and Game publisher fee while the rest of $40.2 Million will be due to BIR. MEXICAN STAGE Mexico is emerging market for gaming and e-sports industry. It has both potential and vision to grow to become one of the biggest markets in Latin American region. Latin America has 45 million E-sports viewers with a market that this year has generated profits of $32 Million, being Mexico the second country that generates more audience in the region behind Brazil, according to data from the consulting firm Newzoo. The electronic sports market generated in 2019 worldwide more than one billion dollars and it is estimated that in 2022 will reach 1,790, according to the same consultant. The graph below represents the increase in the revenue of Mexican Industry over the years (i.e. starting from 2014 and projecting till 2022) In year 2014, revenue of the E-sporting industry was only $1.2 Million. Then a static increase of 1.75% was observed till year 2015. In year 2019 a massive increase was noticed when industry’s revenue jumped to $10.4 Million. In just over the span of 4 years, Mexico had over 104% revenue increase. It is projected that at the end of year 2020, the revenue of Mexican industry will be touching $13.2 Million and by the end of year 2021, & 2022, the revenue will be $16.3Million and $20.3 Million - 14 - BUSINESS PLAN COMPETITOR’S ANALYSIS “Competition is always a good thing. It forces us to do our best. A monopoly renders people complacent and satisfied with mediocrity.” – Nancy Pearcy Competition generates healthy environment; it gives life to new innovations and promote ideageneration. Considering the spectrum of activities, Chino Gamer will be facing competition in both local Mexican/Latin American industry as well as on International scale. To ascertain the competitive advantage, both scales have been assessed in detail and prominent facts have been presented hereunder: PLAYERS OF THE GAME – INTERNATIONAL SPECTRUM Believing in the idea “Go big, or go home”, Chino Gamer will be competing on international level in coming future. But before doing so, it is intelligent to highlight the key aspects of its competitors. By keeping future vision in view, international competitors have been identified and their prominent facts are stated hereunder: CLOUD-9 (C9) Cloud9 (C9) is an American professional esports organization based in Los Angeles, California that develops an online broadcasting network for competitive gaming, video streaming, leagues and tournaments. With championships industry-wide, unmatched viewership hours, and extensive benefits packages for players and staff, Cloud9 prides itself on being the best in all categories. It was formed in 2013, when CEO Jack Etienne bought the former Quantic Gaming League of Legends roster. Following the success of Cloud9's League of Legends team in the North American League of Legends Championship Series, the team began expanding into other esports. In 2018, Cloud9's Counter-Strike: Global Offensive roster became the first and only North American team to win a Major after defeating FaZe Clan. TEAM SOLO MID (TSM) Team SoloMid (TSM) is a North American esports team, created around the community website SoloMid.Net by brothers Andy "Reginald" Dinh and Dan "Dan Dinh" Dinh in September 2009. The team was first seen in early 2011 after being formed to participate in the Riot Season 1 Championship later that year. The organization previously hosted TSM Darkness and Team SoloMid Evo. Team SoloMid is the only team to qualify for all of the first seven World Championships and all of the first ten NA LCS Finals. TSM's League of Legends team has won six of the totals fifteen splits of North America's League of Legends Championship Series (LCS). - 15 - BUSINESS PLAN TEAM LIQUID (TL) Team Liquid is a world-renowned professional gaming organization established in 2000. Since its grassroots beginnings as a Battle.net clan and StarCraft community site, they have grown into a multifaceted global company with unparalleled reach in the industry. With plans for further investments into world class esports athletes, facilities, and infrastructure, Team Liquid stands at the forefront of a thriving new industry. With over 60 championship caliber athletes in 14 of the world’s top games, Team Liquid is synonymous with success. Team Liquid collective teams have won the most prize money in the history of esports while amassing trophies across different titles and different countries. Team Liquid’s European Dota 2 team has built a reputation as one of the greatest teams of all time, winning The International 2017 and Supermajor 2018 along the way. FNATIC (FNC) FNATIC is a global esports entertainment brand headquartered in London, laser-focused on seeking out, levelling up and amplifying gamers and creators. FNATIC was Founded in 2004 and is one of the most successful esports brands of the last decade, winning more than 200 championships across 30 different games. Today, driven by entertainment, FNC is the channel through which the most forward-thinking brands communicate with young people. FNC deliver industry-leading content, experiences and activations through offices and facilities in cities between Los Angeles and Tokyo. FNC’s League of Legends team won the first-ever League of Legends World Championship in 2011, and also holds the record—tied with G2 Esports—for the most League of Legends Championship Series split titles in the LEC, totaling seven of the fifteen played so far (as of May 2020). G2 ESPORTS (G2) G2 Esports, formerly known as Gamers2, is a Spanish esports organization based in Berlin, Germany, with players competing in League of Legends, Counter-Strike: Global Offensive, Hearthstone, Rocket League, Rainbow Six Siege, and iRacing. The organization was founded on 24 February 2014 by former League of Legends pro Carlos "ocelote" Rodríguez Santiago and investor Jens Hilgers. G2's League of Legends team competes in the League of Legends European Championship (LEC), the highest level of competitive League of Legends in Europe. G2's Rainbow Six Siege team competes in the European League (EUL), the highest level of competitive Rainbow Six Siege in Europe. - 16 - BUSINESS PLAN FaZe Clan (FC) FaZe Clan (formerly FaZe Sniping) is a professional esports and entertainment organization headquartered in Los Angeles, United States. Founded on May 30, 2010, the organization has players from around the world, across multiple games, including Call of Duty, Counter-Strike: Global Offensive, Player Unknown's Battlegrounds, Tom Clancy's Rainbow Six Siege, FIFA, Valorant and Fortnite Battle Royale. In 2020, the organization expanded into the Asian market, acquiring a PUBG Mobile and FIFA Online roster. Known for its disruptive original content and hyper-loyal fanbase, FaZe Clan counts celebrities such as NFL star JuJu SmithSchuster and musicians Offset and Lil Yachty among its ranks. As gaming enters the mainstream, FaZe Clan is leading the charge. - 17 - BUSINESS PLAN BRAND’S VALUE Generating goodwill and brand image is one thing, but being the best and operationally sound is how entrepreneurs and investors see an entity making profits. If you are not operationally capable to stay in the market for coming 10 to 15 years, then all the fame, boom and spotlight you had will be just a temporary thing. Considering the top-notch E-sports brand, they have not only been winning championships and making good content for their viewers, but they are also spending a lot on creating their brands so longer fan base and investor worthy association can be created. Cloud 9 and Team SoloMid have managed to create a brand value of $400 Million, which is the highest any brand has achieved so far. With the difference of $80 Million, Team Liquid has been there at $320 Million. FaZe Clan has the value of $240 Million, while both Fnatics and G2 Esports are at $175 Million and $165 Million respectively. BRAND VALUE (Million $- 400 400 300 320 250 240 200 150 175 165 Fnatic G2 Esports 100 50 0 Cloud9 Team SoloMid Team Liquid Faze Clan REVENUE Brand value marks your accomplishments over the years since you started operating in the industry. While Revenue measures one’s yearly performance in shape of profits earned. Ideal situation would be to be on top while generating brand value and making hefty profits. But E-sports industry, like every other industry, doesn’t let you play by these rules. If you focus on yearly profits, somehow you see a dip in brand value. Same situation was to be faced by Cloud9. Being a champion in almost 9-10 world wide gaming titles, they tried their level best to be on top, which they achieved in the shape of Brand Value but unfortunately, they are not making profits as they should have been. Similar situation was faced by FaZe Clan. They are making hefty yearly profits but somehow are struggling to generate a good brand value. - 18 - BUSINESS PLAN Team SoloMid and FaZe Clan is making $35 Million profits per annum. $33 Million in profits are being generated by Team Liquid. Cloud9 stands behind Team Liquid after making $29Million. Thereafter comes G2 and Fnatics for making $22Million and $16 Million a year. A graphical presentation has been included to demonstrate such numbers. REVENUE (Million) 40 $35 $35 35 $33 $29 30 25 $22 20 $16 15 10 5 0 Team SoloMid - 19 - Faze Clan Team Liquid Cloud9 G2 Esports Fnatic BUSINESS PLAN PLAYERS OF THE GAME – LOCAL SPECTRUM Competing on Latin American level is not as easy as it sounds. You get to witness some amazing people (athletes) putting their “superhero” capes on and doing some unbelievable stunts which leave audience speechless and bewildered. Latin America being the smallest among other regions doesn’t mean it has insignificant number of players. Among all other Latin American countries, Mexican E-Sports players are leading the charge. According to Newzoo.com, in one of their reports it was stated that Jorge "NerzhuL" Ivan Meza, Gerardo "Porky" Alonso, Ali "Seeiya" Bracamontes, Marcelo "Thyak" Ramones, and Diego "Arce" Chang are the top 5 players in League of Legends’ players. Collectively, they have earned roughly above $ 1.6 Million over the span of last 4 years. Some prominent names in local Mexican/Latin American E-sports industry are presented down below. Theses brand are potential competitors to Chino Gamer. TEAM QUETZAL (TQ): Team Quetzal is a Latin American multi-gaming organization based in Mexico. Team Quetzal is a professional multi-game organization of esports with teams in Counter-Strike: Global Offensive, League of Legends, Rainbow Six: Siege, Hearthstone, FIFA, Racing, and Dota2. The team was founded in 2011 as a project to promote esports in Mexico, and is currently the best multi-game team in Mexico and one of the best in Latin America. Team Quetzal has totally participated in 18 tournaments for the last 7 years. In that period the squad won 2 tourneys and has taken the 3rd position twice. The most profitable appearance for Team Quetzal was World Electronic Sports Games/2016/Americas in 2016 with $8,875 in prize money shared for the position #3. RAINBOW7: Rainbow7 is a professional League of Legends team from Latin America based in Mexico. They are co-owned by the American toy company Just Toys. Rainbow7’s Earnings have crossed over the mark of $100,000. Rainbow7 has totally took part in 13 events for the last 5 years. In that period the team won 4 tourneys, was a runner up in 1 tournament and has taken the 3rd place 4 times. The most beneficial appearance for Rainbow7 was World Championship/2017 in 2017 with $34,474 in prize reward shared for the position #17. Rainbow7 has received the first profit playing League of Legends in the year 2016. According to yearly performance analysis, the year 2017 was the most productive for this squad with $59,824 in prize money shared. The most active year for Rainbow7 was 2017 with 5 appearances in official competitions. - 20 - BUSINESS PLAN GILLETTE INFINITY E-SPORTS: Infinity Esports is a Costa Rican multi-gaming organization founded in 2009. They entered the League of Legends scene in 2014. Their name was previously stylized InFinity eSports. The team currently competes under the name Gillette Infinity due to a sponsorship deal with Gillette. Infinity Esports has proven to be an exemplary organization. The team has been to three straight Finals in their region, losing the first two against Rainbow7, the iconic representative in the Latin America North (LAN) Now, for the first time in the region’s history, there's a new champion to represent LAN at Worlds. Coming off their historic win, Infinity will look to leverage their momentum at Worlds for the first time ever. XTEN SPORTS: XTEN Esports is a Latin American multi-gaming organization founded in Mexico in 2018. They were previously known as Predators Esports. The name “XTEN” refers to the perfection that exist in archery, discipline practiced by Wong Lee, the team's president. In this sport, the very center of the target is marked with an X, which gives the maximum score one can win, ten points. This is the origin of the team's name, “X-TEN”. XTEN Esports has been involved in different games e.g. League of Legend, Overwatch, Fortnite and StarCraft (SC). 6SENSE: 6Sense is a Latin American gaming organization, majorly dealing in League of Legends team. 6Sense was established in Mexico in 2016 and since then it has been participating in the tournaments. 6Sense has totally participated in 2 tournaments for the last 4 years. In that period the squad was a runner up in 2 tournaments. The most profitable appearance for 6Sense was HGC Copa America 2018/Phase 1/North Region in 2018 with $3,000 in prize money shared for the place #2. 6Sense has acquired the first income playing Heroes of the Storm in the year 2017. According to annual performance breakdown, the year 2017 was the most successful for this team with $3,000 in prize money shared. The most active year for 6Sense was 2017 with 1 appearance in official competitions. FRATRES: The Fratres is another esports organization in the region of Latin America based in Mexico engaged in different games. Fratres have topped more than $10,000. Fratres has totally played in 6 competitions for the last 4 years. In that period the team won 2 tourneys, was a runner up in 1 tournament and has taken the 3rd position thrice. The most profitable appearance for Fratres was HGC Copa America 2018/Phase 1 in 2018 with $4,000 in prize reward shared for the position #2. Fratres has earned the first profit playing Heroes of the Storm in the year 2017. As stated in yearly performance breakdown, the year 2018 was the most successful for this squad with $9,000 in prize money shared. The most active year for Fratres was 2018 with 4 appearances in official events. - 21 - BUSINESS PLAN EARNINGS: EARNINGS $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 RAINBOW7 INFINITY ESPORTS XTEN ESPORTS TEAM QUETZAL FRATRES 6SENSE Rainbow7 has been more than successful since its inception. It has secured almost $120,000 over past 5 years by competing in various tournaments. Infinity Sports has secured 2nd position in rank card, as they managed to secure $57,262. XTEN Esports, as started back in 2018, has secured $16,360 so far. Team Quetzal has earned $13,876, Fratres has earned $10,000 and 6Sense has earned &6,000. - 22 - BUSINESS PLAN COMPETITIVE ADVANTAGE Competitive advantage which Chino Gamer will have over its competitors will be assessed by understanding the different dynamics of circumstances classified under “SWOT”. Keeping an eye over such factors, not only provides an entity to outperform its’ rivals but also enables it to deploy counter strategies to ensure longer survival in the market. Strengths Emerging industry in Mexico as well as Latin America; S W Weaknesses Strong competition in Mexico as well as Latin American region; Lack of proper regulation in E-sports industry; Emerging Economy of Mexico; Easy availability of resources; Unpredictability of revenue generation; Rising trend of e-sports revenue and audience on a global scale; Multiple revenue streams; and Complex organization structure; Huge fan base all over the world. Expensive tools and equipment; and Engaging young players. Investor needed for startups. Opportunities Threats Established competitors in Favorable development environment; Mexico as well as Latin American E-sports has brought new light to the gaming world; Region; Creating job opportunities; Increasing aggression of players; Higher brand value; Difficult for sponsors to target Identification of new revenue streams e.g. betting & merchandising; and specific market; Increasing monetization of players and games. Poor health and fitness habits. Not a socially acceptable O - 23 - Game disruption; and T career path. BUSINESS PLAN ▪ E-Sports being an emerging industry in Latin American does provide ample of opportunities for new entrants. Introduction of every new gaming format, changes or revamps gaming industry. Target market in this industry is defined on the basis of gaming titles. It is not based on any factors like players’ age, nationality, region, ethnicity or any traditional factor which is usually observed in other markets. Such factor will be considered by Chino Gamer and they will initially compete in Call of Duty Modern Warfare. This will not only ensure their prominence on Mexican & Latin American but will also give them a chance to test their limits and compete on the international level. ▪ Being highly profitable market, it will help Chino Gamer to not only be self-sustaining entity, but will also allow them to offer reasonable amount of money for economic development and growth the country. This will be done in shape of taxes paid on revenue earned from various revenue streams. (Please refer to Sales’ Forecast section for details related to revenue streams.) ▪ Providing opportunities to young players will help them in their personal as well as professional growth. Targeting this very factor, will not only provide Chino Gamer with young and energetic players but will also provide them an opportunity to invest on a player who would have longer career span. ▪ Strong competition in local as well as in international market will be a difficult thing to overcome. For that both resources and effective media campaigns will be launched by Chino Gamer. If they don’t have a good social footprint, they will face hurdles in attracting new gamers. The loss will be bigger if a better player is recruited by any of Chino Gamer local or international competitor. ▪ Unpredictability relating to revenue generation is a tipping point in this industry. There is no guarantee that every startup will succeed because despite having tons of capital. To fight off this cause, Chino Gamer has diversified its revenue streams. They will not be solely relying on prize money and championship rewards, rather they will be associating with sponsors, social media houses, clothing brands and other potential revenue generating powerhouses to make this venture a success. ▪ The biggest threat which will be faced would be relating to player’s health and fitness. Excessive and unscheduled screen time not only cause skin diseases and vision impairment but also cause extensive hair loss. This will be dealt by Chino Gamer by carefully monitoring player’s playtime schedule. A routine fitness checkup will be ensured. Activities off of the gaming chair will also be embedded into their routines. - 24 - BUSINESS PLAN MARKETING PLAN AND STRATEGY MARKETING ANALYSIS – A SHORT GLIMPSE In 2018, revenue generated from the eSports industry approached $1Bn, with nearly 80 percent of that revenue coming from sponsorships and advertising. And it’s not just gaming companies getting in on the action: Coca-Cola was one of eSports’ top sponsors, along with other big companies like T-Mobile, Audi, and Red Bull. Spending on esports is projected to surge at a CAGR of 18.3% between 2018 and 2023 to reach almost US$1.8Bn. From a relatively niche global market worth US$194m in 2014, esports saw its total revenues leap fivefold, to US$1.1Bn in 2019. The $1.1Bn is a small part of the total global video games and esports market, which is expected to be worth US$162bn in 2023. - 25 - BUSINESS PLAN MARKETING PLAN THE AUDIANCE As with any other marketing strategy, finding the right esports audience lets you communicate with them in right way. Esports have a dedicated and growing audience. According to one report on the state of esports, in 2018, there were an estimated 380 million viewers, and the audience is expected to grow to 557 million by 2021. To identify the target audience, tools relating to social listening (such as feedback forms, surveys, or questionnaires) may also be considered, with which you can break down your audience by gender and age data, and tailor your strategies accordingly. You can also use this listening data to pinpoint where in the world conversations around your game are taking place. League of Legends, for example, predominantly attracts players in Western Europe and Korea, with North America only accounting for 10.8% of their total player pool. This listening data will enable you to uncover new audiences you might not have thought to reach out to. Like conventional sports, esports is divided into various gaming genres ▪ PvP (Player vs. Player) ▪ FPS (First-Person Shooter) ▪ RTS (Real-Time Strategy) ▪ MOBA (Multiplayer Online Battle Arena) ▪ MMORPG (Massively Multiplayer Online Role-Playing Games) Considering the initial selection of FPS genre by Chino Gamer, related audiences and their interests should be identified and targeted using the core strength of content creation. As a result, Chino Gamer can also sort out the brands they can relate themselves to and to partner with, and both will have a higher chance of lasting partnership. THE CHANNELS This is another of those basic marketing strategies. You’ve identified an audience, and now the questions are: Where can you best reach them? How can you best approach them? More often than not, you will find your audience in minor and major video game streaming sites. Here are some of them: ▪ ▪ ▪ ▪ ▪ ▪ Twitch; YouTube Gaming; Hitbox; Beam; Azubu; and Facebook Gaming. Twitch and YouTube, in particular, are the go-to platforms for eSports fans. While Twitch was purposebuilt for gamers to stream to an audience, YouTube was where this phenomenon first caught on. Find out who’s playing/broadcasting the game you’ve chosen as your target and place your ads there. In fact, - 26 - BUSINESS PLAN it’s helpful to cast as wide a net as possible at first, running your ads on both Twitch and YouTube on a variety of channels. Once you’ve figured out your esports target market, now you can find where they are lurking. That way, if you’re planning to sponsor another esports team in the future, you can scour for the best of the best in the gaming space. THE INFLUENCERS Influencer marketing is definitely not dead. You can leverage influencer marketing by picking streamers with a huge following to market your brands. Ninja, the biggest streamer on YouTube and Twitch with 19 million and 14 million subscribers respectively, played a game of Fortnite with the famous rapper, Drake. And you can get inspiration from this example. Needless to say, you shouldn’t miss other video game streamers trailing behind Ninja on Twitch: ▪ ▪ ▪ ▪ Shroud (6.5 million subscribers); Summit1g (4 million subscribers); Riot Games (4 million subscribers); and Tsm_myth (5 million subscribers) Depending on how well known your brand is, as well as the size of your budget, you may have to work your way down a list before finding a collaborator. Even at the micro-influencer level, though, you’ll still be well positioned to start developing a loyal community of followers and fans. Even if the only thing you do is just put “Chino Gamer presents” at the beginning of the influencer’s video and down in the description, you’re already making strides. There is absolutely no doubt that influencer marketing can encourage highly-vocal esports teams to come to you for help in forms of partnerships, sponsorships, ads, and more. It’s a win-win for both! THE EVENTS The bigger tournaments are already spoken for to the tune of hundreds of millions of dollars. But there’s nothing that says you can’t host your own tournament. Smaller, private events can be a very effective way to not only market your brand, but they can also serve an entry point into serious eSports credibility. You can do something as simple as working with a local sports bar to host the event, setting up some consoles on their large screen TVs. Or you can go much deeper, using a company to provide you with everything you need to host something on a grander scale. ▪ Smaller Tournaments: Small things start from humble beginnings. So never underestimate the power of small tournaments. These are perfect points of entry into more significant esports events. This is also an ideal way for smaller brands to leverage esports marketing. You can partner with local businesses in nearby areas such as pubs, hotel bars, or sports bars. This will attract small and local esports teams in your area who can’t afford substantial entry fees as well. ▪ Bigger Tournaments: Whether you partner with another gaming platform or create a massive tournament from scratch yourself, bigger tournaments mean one thing: BIG TURNOUTS. These leagues/tournaments will also create a highly competitive atmosphere for all the famous esports teams and will give them a higher chance to be recognized by major sponsors as well. The best way for Chino Gamer is to convene smaller tournament so that they could see the fan’s reactions and will also end up generating smaller chunk of profit as well. Later on, bigger tournaments are a reasonable option. - 27 - BUSINESS PLAN PARTNERSHIP WITH BRANDS The interest in esports from brands is reflected in growing ad revenue, which eMarketer predicts will increase 25% this year and exceed $200 million by 2020 Esports is particularly profitable for the advertisers that are featured in conjunction with the games and many brands are recognizing the potential in this. There has been a surge in esports sponsorships and the entrance of non-endemic brands into the space over the past few years with many Fortune 500 companies getting in on the action including Mercedes-Benz, Coca-Cola, and T-Mobile. There are variety of options available for partnership with brands, but esports fans—and especially players—are picky. Relevance is key when identifying new partnerships, and quality is top of mind for any serious gamer. Some of the main/top-rated brand categories are: ▪ ▪ ▪ ▪ ▪ Energy Drinks Electronics/Hardware for Gaming Sports Drinks Entertainment Athletic Apparel/Snack Food Whether it’s an esports tournament, convention, or business summit, partnering with esports-related events will make for brand awareness on a bigger scale. Your brand can be at the forefront of these events and will likely develop long-term relationships with leading esports teams, video game streamers, organizers, or even like-minded sponsors. It was announced recently that BMW have signed global partnerships with five top E-sport organizations, the details of the partnership involve BMW providing branded vehicles for teams to travel to and from the events. It’s a unique partnership that sees BMW leverage the rivalries between gamers who often compete against one another, driven by social media amplification; we imagine this may be the catalyst for more brands to follow suit in this strategy. By keeping everything in mind, Chino Gamer has already set foot in the E-sports industry and have moved towards signing an agreement with the biggest E-sports brand in Ecuador called “Skull Crusher”. This partnership will not only bring bigger profits but will help Chino Gamer to be recognized from a thousand miles away. - 28 - BUSINESS PLAN MONETIZATION STRATEGY Past experience in segments like social media shows that where the attention of young consumers goes, dollars soon follow. The goal, of course, is to pursue profitability and become commercially sustainable. As established sports organizations have found, the best and least risky way to do this is to tap into several sources of revenue rather than one or two main lifelines — diversity of options. FRANCHISING Franchising — owning teams or leagues that compete in esports — creates its own ecosystem of revenue streams. This avenue provides a solid platform that can underpin a range of longer-term commercial strategies. Franchising enables the creation of a narrative — seasons, series, competitions, rivalries — that will last years rather than months. As such, it offers esports teams and players the time and security needed to create a legacy and grow additional revenue streams, such as advertising, ticket sales, or media rights. Along with a narrative comes content to leverage — merchandise, video, podcasts — contributing further to the building of a storyline that people will spend money on. Franchising enhances sustainability and creates fertile conditions for commercial innovation and new revenue models. Esports teams operating within a franchise structure no longer need to rely on winning competitions and prize money as their core revenue source. This in turn gives greater confidence to investors and sponsors, who don’t feel their investment can be put at risk by the next bad performance. Currently, esports franchises appear to be evolving in one of two ways. They can become media companies focused on creating content around their narratives, such as stories about their players or rivalries with other teams. Or they can morph into lifestyle brands based on products and diversity — witness how the Fnatic family of esports teams’ equipment and clothing have the feel of Rip Curl to surfing or Burton to snowboarding. The same mindset is being followed by Chino Gamer. They have distributed operations in two different categories. LA ZONA will be a brand name associated with conducting league sessions throughout the year and M27 will be Chino Gamer’s own team for competing against rivals. It is to be highlighted that M27 will also be participating in LA ZONA’s league sessions whenever they are convened. Chino Gamer has included the best content creators in their staff. They will not only be focusing on creating content for Chino Gamer, but will also provide their valuable services to Skull-Crushers. Such endeavor is identified as an independent revenue stream and will contribute towards the self-sustaining ability of Chino Gamer. MEDIA RIGHTS Just as is the case for traditional sports, media rights are a natural — and potentially substantial — source of revenues for esports. Projections show media rights will be the fastest-growing source of esports revenues between 2018 and 2023, rising at a compound annual growth rate (CAGR) of 25.0% to reach US$506m – PwC Global Entertainment & Media Outlook Going forward, there’s the clear potential for one or more of the FAANG global tech platforms (Facebook, Amazon, Apple, Netflix, Google) to pick up esports and take it to a global mainstream audience. Chino Gamer will be focused on FAANG global tech platforms so that maximum number of audiences can be reached as increase in viewership also increases the potential revenue. - 29 - BUSINESS PLAN FAN PAYMENT MODELS The consumer contribution to esports will rise at a CAGR of 14.4% through 2023, reaching US$254m, while esports ticket sales will rise at a 17.3% CAGR to US$129m. Together, these consumer revenue streams will be bigger than streaming advertising but less than media rights. How will esports realize this consumer opportunity? Charging for top-tier events makes commercial sense, even if the fee is just a token amount: a fan may well be prepared to pay US$20 a year to watch NBA or La Liga their favorite esports league. But questions remain, even in long-established sports, about who they pay this money to and whether they feel they’re getting the value for it. That said, some fans may regard additional content such as behind-the-scenes access and stories as more valuable than the main live event. In the spring of 2019, Riot Games introduced the US$15 Pro View pass for fans of League of Legends (LOL) esports, which enables viewing of multiple streams and creation of personalized fan experiences. Revenues from the pass are split between regional LOL leagues and teams. What’s clear is that if Chino Gamer can identify the right consumer payments models and implement them correctly, fans will stay on board. There’s a useful precedent in the way video gaming revenue has boomed with in-game purchase models. Gamers are happy to pay for features that enhance their experience and allow them to customize it. SPONSORSHIPS AND ADVERTISING The forecasts suggest that sponsorship will retain that position over the coming five years, growing at a CAGR of 16.3% to US$598m in 2023 Sponsorship is currently the single biggest source of revenues for esports. Rather than grabbing the first sponsorship deal that comes along, companies are increasingly looking for additional value — value that might include access to other markets or hard-to-reach consumers, access to other companies that the investor has invested in, or access to infrastructure. This added value flows both ways — to sponsors and to esports businesses. Toyota’s partnership with Blizzard Entertainment’s Overwatch League included a documentary-style video series called “Access Granted” featuring Toyota vehicles. For a traditional sports club, an esports sponsorship could present an ideal entry point for getting into a new market such as China. For Chino Gamer, it is suggested to find a sponsor so that they become financially stable and their brand image could grow. PRIZE MONEY Prize money in esports is increasing at an incredible rate. While prize pools amounted to a mere couple thousand dollars at most in the past, they now reach several million dollars for large competitions. League of Legends for example distributed a total of $4.9 million for their World Championships last year to teams according to their final standings. This money does not go directly to the players, and most of it is absorbed by the organization as revenue. The esports team in this sense acts like a company, with the players as employees on yearly contracts. This meaning that the liability/ownership of any team related events are all held by the team owners. Domestically, teams in the North American League Championship Series (NALCS), after the franchising starting from 2018, are entitled to 32.5 percent of the league’s revenues. Half of this is evenly distributed, while the other half is allocated according to each team’s standings and viewer/fan engagement contribution. The way in which the last component is measured is not explicitly stated, but is predicted to be mainly related with the peak and average viewership of the team’s games throughout the season. - 30 - BUSINESS PLAN The Chino Gamer is also following such distribution structure relating to prize money. Players will be on yearly contracts, while the prize money will be considered as Chino Gamer’s revenue source. Such will be distributed as per the discretion and decision decided by the organization. MERCHANDISE SALES Each esports team similar to traditional sports offers apparel and other related merchandise. These include jerseys to t-shirts, and also other gaming related goods such as mouse pads which target their unique audience. Teams take various approaches such as the 100 Thieves, a new team formed in 2018, which uses a “hypebeast” style of merchandising, with high prices and limited quantity. This has been very successful for them with apparel selling out within 20 minutes of release. This is not surprising considering the low elasticity of demand that a lot of these core fans have. By setting price high and quantity low, 100 Thieves also attempts to make team merchandise into a Veblen good, a good that is demanded more when prices are high, as the good has value as a status symbol. Chino Gamer is considering this revenue stream as well. Merchandise will be sold through Chino Gamer website. Occasional discount deals, or bulk orders will also be entertained. To grow sales, members will also be given freebies with the merchandise. CONTENT CREATION Although very small compared to the other sectors, esports teams also make money through content creation on platforms such as YouTube and Twitch. Popular teams like Team Solo Mid have regular videos on how the teams are doing, and these videos rack up above 100,000 views each. With advertisement revenues on each view, the teams can keep funding high quality videos. Teams like Team Liquid take this onto a higher level by partnering with 1 Up Studios, an esports production company, showing just how much care they put into this sector. The income from this sector is very small and for some teams is a loss, but its spillover effects are huge in terms of reaching new audiences and expanding their fan base. The fan base, as we can see, being the number one priority in attracting sponsors. Chino Gamer, for now has its own Content Creation team. They are experienced people who love creating art for their audience. The content has been so authentic that biggest E-sports brand in Ecuador has offered Chino Gamer to get into an agreement for content production. This is a huge sign of relief and satisfaction for a new startup. - 31 - BUSINESS PLAN OPERATIONAL PLANS Mexico City is one of the most important economic centers in Latin America. The city (Federal District) accounts for nearly one-fourth of the gross domestic product of Mexico. Mexico City is ranked as one of the richest urban agglomeration in the world and is poised to become the 7th richest by 2020. The city is home to the headquarters of the country's largest banks, insurers as well as many international financial service companies for Latin America. The business district of the city, Santa Fe has most of the headquarters of the companies. It also houses the Mexican stock exchange (Bolsa Mexicana de Valores). Citigroup is one of the largest companies of the city which produces almost three times as much revenue than all 16 Citigroup's branches in the rest of Latin America. For conducting business in fashionable and professional manner, Chino Gamer has chosen to establish it headquarter in Colonia Roma, a district located in Mexico City. Operating from the business hub of the country not only provides ease of doing business but also promotes brand image and goodwill faster. HUMAN RESOURCES Chino Gamer believes in hiring the best of the best for upholding higher quality benchmarks. For this they are not only paying handsomely in form of salaries but are giving their employees a better lifestyle. Details of the Human resources which would be engaged in the business are given as under: Resources Description/Designation Salary ($)/month Accountant 500 Lawyer 650 Art Director x 2 1,500 each Senior Art Director x 2 950 each Video Editor x 2 950 each Senior Copywriter 1,250 Copywriter 950 Community Manger x 2 500 each Business Director 2,000 Sports Coach 1,500 Public Relations Executive 2,000 Human Resource Executive 1,250 Internal Auditor 1,250 Interns x 3 500 each Initially, Chino Gamer’s office staff will include all above stated individuals. When in future, operations will expand, the organization will hire more staff. The staffing requirements are considered after assessing the magnitude of operations, country’s employment rate and staffing costs. - 32 - BUSINESS PLAN HIREARCHY Chain of command is necessary in every organization. It helps in understanding job roles and define proper reporting channels. Following is a preliminary organogram (or organizational chart) of Chino Gamers: CHINOGAMER Director Marketing Community Manager - 33 - Director Creative Arts (I) Director Business Human Resources Legal Affairs Internal Audit Accounts Copywriter Art Director Director Creative Arts (II) Copywriter Video Editor BUSINESS PLAN SALES FORECAST Sales forecast is estimated on the basis of market expectation which are developed on the basis of different factors prevailing in the market e.g revenue estimation of Mexico & Latin America, market share expectation of Chino Gamer in Mexico & Latin America, growth rate of Mexico & America, Inflation Rate of Mexico & Latin America, etc. Details of such factors are explained in the next section of the plan under the heading, Assumptions. Below is the graphical illustration of what revenue Chino Gamer will be capable of generating from its operation in both Mexico as well as Latin America: Sales Forecast 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,- 2022 Mexican 2023 2024 2025 Latin American Further clarity about the figures can also be sought out from the Income Statement presented in the next section of the plan. - 34 - BUSINESS PLAN FINANCIAL HIGHLIGHTS The financial highlights will bring into light some of the prominent financial aspects of Chino Gamer. This will not only help the investor but also the user of this financial plan to consider the financial strategies which should be adopted and kept in check over the period of its existence. Major aspects of the financial plan include: ❖ Projected Income Statement; ❖ Projected Balance Sheet Statement; It is to be noted that projections have been casted over the period of 5 years starting from the year 2021 and ending at year 2025. ASSUMPTION Certain assumptions, were considered before making projections. It is to be highlighted that such assumptions, if changed, will impact the projections, but not drastically. The set of assumptions is presented below: 1. Market expectations are developed considering the following indicators / aspects: a. impact of COVID-19; b. competitiveness in the market of Mexico / Latin America, there was 11.1% increase as per Newzoo.com; c. initial plan to deal within a single title i.e. Call of Duty, which is itself not a very huge revenue generating source; 2. Rental cost is included for first six months in the year 2021. While full-year cost is included for the rest of the years. 3. As per the initial estimates, costs related to website development, pro-account licenses need to be capitalized and distributed over the forecast period i.e. 5 years. Therefore, USD 71,000 has been amortized over the respective 5 years in the Profit or Loss Account. 4. It is assumed that entity will distribute 10% of the income generated. 5. Vehicles include, 1 scooter, 1 staff van, 1 mini-van. 6. Depreciation rate for vehicle is 20% on WDV and for office equipment is 10% on WDV. 7. All the amount generated from the operations is realized at the end of year. 8. Tax is assumed to be 30% for all years. 9. It is assumed that there will be no impairment on any fixed asset over the next 5 years. 10. Expected Inflation Rates for Mexico is 4.01% and for Latin America is 6.23%. - 35 - BUSINESS PLAN 11. Expected revenue will be as follows: Years Latin American Mexican Sources - 95,800,000 118,025,600 145,407,539 179,142,088 220,703,053 16,300,000 20,375,000 25,468,750 31,835,938 39,794,922 *Newzoo.com, but we have assumed the growth rates as constant where no data for the respective year was available. 12. Expected market share will be as follows: Years Latin American Mexican 2021 1.00% 2.00% - 1.10% 1.21% 1.33% 1.46% 2.30% 2.76% 3.31% 3.97% Sources *Assumed 10% annual increase in Latin American and 15% annual increase in Mexican markets considering expectations from CHINOGAMERS. 13. Expect inflation rates for both of the region will be as follows: - 36 - Years Latin American Mexican Sources - 6.23% 6.23% 6.23% 6.23% 6.23% 4.01% 4.01% 4.01% 4.01% 4.01% *Averaged 5 years' available data from following sources: a) https://www.statista.com/statistics/275414/inflation-rate-inmexico/ b) https://www.statista.com/statistics/698928/inflation-rate-in-latinamerica-and-the-caribbean/ BUSINESS PLAN INCOME STATEMENTS (STATEMENT OF PROFIT & LOSS) Following is the illustration of the projected Income Statement of Chino Gamer for next 5 years, prepared on the basis of the assumption explained in the above section named as Assumption: - 37 - BUSINESS PLAN BALANCE SHEET (STATEMENT OF FINANCIAL PERFORMANCE) Following is the illustration of the projected Balance Sheet of Chino Gamer for next 5 years, prepared on the basis of the assumption explained in the above section named as Assumption: - 38 - BUSINESS PLAN REFERENCES Following are the reference sites that were used to research out the information regarding the e-sports industry and collecting information about the revenue estimation, market expectation and other relevant factors deemed to be needed for the development of business plan: https://www.statista.com/statistics/275414/inflation-rate-in-mexico/ https://www.statista.com/statistics/698928/inflation-rate-in-latin-america-and-the-caribbean/ https://www.statista.com/statistics/935146/revenue-esport-gaming-market-mexico/ https://www.mdcdatacenters.com/company/blog/mexico-leads-the-gaming-market-in-latin-america/ https://www.cms-lawnow.com/ealerts/2019/10/esports-in-mexico-a-growing-market-withopportunity-for-investment https://www.businessinsider.com/esports-ecosystem-market-report https://www.mexicanist.com/l/esports/ https://www.statista.com/outlook/203/116/video-games/mexico https://www.researchgate.net/publication/-_The_Impact_of_Social_Media_on_Video_Game _Communities_and_the_Gaming_Industry http://newtechmag.net/2019/06/30/the-professionalization-of-esports-in-latin-america/ https://seekingalpha.com/article/--look-esports-trend-and-main-companies-involved https://www.toptal.com/finance/market-research-analysts/esports https://mercercapital.com/article/esports-business-models-article/ https://mercercapital.com/article/esports-business-models-article/ https://www.forbes.com/sites/mikeozanian/2018/10/23/the-worlds-most-valuable-esports-companies1/#25bf43e16a6e https://www.smartsheet.com/free-competitor-analysis-template https://www.owler.com/company/cloud9 https://gamingstreet.com/economics-of-esports/ https://esportsflag.com/mexico - 39 -