CHINO GAMER
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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 -
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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 -
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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.
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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.
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BUSINESS PLAN
ABBREVIATIONS
The abbreviations used in the below mentioned plan are stated as under:
Abbreviations
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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.
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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
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❖ 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;
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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.
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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:
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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
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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,
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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
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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).
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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.
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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.
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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.
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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
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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.
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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.
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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
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