Digital Entrepreneurship: Videogame Sales Tracker

Executive Summary

The subject of this report is a business idea – a service that tracks videogame sales on game launchers and online stores and collects the best deals. The product will come in the form of a website and application with a search engine that allows clients to find the exact offers they need. This report uses PESTEL analysis, Porter’s Five Forces, Value Proposition Canvas, Bowman’s Strategy Clock and Nielsen’s Five Quality Components as a framework for the examination. The findings show that the business idea’s competition does not offer apps and personalisation which can be exploited by the company. The main recommendation for the firm is to choose the country with high internet speeds and pay increased attention to developing a reliable search system.

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Introduction

The world of digital video gaming continues to expand every day. In the past, people acquired new games in stores by purchasing physical copies on cartridges and disks for their consoles or computers. At the present time, PC gaming has another way of accessing games – through game launchers. Similar to the variety of game developers in the market, a large number of game launchers exist, each offering sales, exclusive games and bundle deals (Macgregor 2019). Thus, it may be challenging for players to find the best source for buying a particular product for the most affordable price in the market of digital and physical stores.

The present business report proposes an application with a supporting website that tracks videogame sales across digital platforms and helps people to find new deals or promotional codes. The report will investigate the external environment and the industry of gaming and websites that have a similar purpose. The plan will look into the needs and issues of potential customers, creating a value proposition and segments. The report will also demonstrate which business strategy is the most profitable for this application. Next, various ways to market the application digitally will be discussed. The report will also suggest several possible revenue streams, analysing the current state of virtual services and subscription-based access to content. Finally, the paper will present the website’s interface and offer some information about the application itself, as well as talk about other considerations and the conclusion to the business plan.

External Environment and Industry Analysis

First of all, it is vital to understand that the application will not compete with game launchers themselves since it will not sell videogames of offer discounts. The main feature of the app will be to collect data from available news sources, as well as the launchers, to present a client with a list of available deals. Therefore, one may consider the market of deal-tracking services as the primary industry for comparison. The research revealed that no such applications as the one proposed in this business plan existed. Currently, only a number of websites are available for players to see new deals.

PESTEL Analysis

While game launchers and developers encounter the need to conform to many governmental regulations, the discussed idea does not directly participate in pricing or distribution of the final product. The only influence of the government on the website and the application in the placement and content of advertisements on these platforms (Yüksel 2012). Thus, it is necessary to ensure that these regulations will be followed. The service may be available to children since gaming has customers of different ages, so advertisements should adhere to specific restrictions.

The service proposed in this business plan has a potential to be international, because most launchers have sales available to all their clients. Therefore, if the application will receive revenue from purchases or subscription-based plans, the income of consumers and the state of the global economy should be considered (Davidovici-Nora 2014). The product’s pricing will depend on each country’s financial abilities, taxes, exchange rates and economic growth.

The gaming industry has a diverse client base, with computer games being offered to children and adults from different socioeconomic backgrounds. As the application will have an international base, its developers and designers should take into consideration the cultures of all potential clients. It is possible to leave the structure of the website and the app simple to avoid unnecessary culture-based challenges and tensions. Marketing has to focus on offering a wide variety of products to appeal to different communities.

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The technological advancement in the fields of gaming, data collection and algorithms make the proposed project possible. Currently, one can collect information about sales from different platforms and organise in a way that will be easy for clients to understand and utilise. The use of big data and tags will simplify the search for both app owners and consumers (Schüritz, Seebacher & Dorner 2017). The creator will be able to use artificial intelligence (AI) as a tool to research latest deals, while customers will be able to sort through numerous offers with the help of hashtags.

As for the last two factors, the project will not affect the environment in a major way because of its fully digital nature. The company should employ sustainable practices and use technology that does not harm nature. Lastly, the application should not encounter any legal challenges if it displays only official information that is available to the public from other sources. The main purpose of the app is to combine data and deliver it to people via notifications and search.

Porter’s 5 Forces Analysis

It may be difficult to analyse the industry of deals-tracking applications because none exist at the present moment. Some websites, however, offer information about the upcoming deals and have a search option for clients. The competition includes such projects as Is There Any Deal, CheapShark, Slickdeals, Daily Game Deals and Reddit communities /r/GameDeals and /r/ConsoleDeals (Lee 2017). The last one in this list is a consumer-reliant initiative where gamers relay information to other people about the deals they find on the internet. Slickdeals operates similarly, utilising their clients’ access to information as the base of the service. Other websites collect data from game launchers.

The strengths of these businesses are that they are free, although they feature adverts on pages. Moreover, companies such as Is There Any Deal and CheapShark have a search option for choosing which game genre or price category the client needs. The main weakness of these projects is that they do not have an application that would notify customers about the latest deals or prepare personal selections for them. Overall, the bargaining power of buyers is great since the services rely on visitors and their decision to stay on the website or use the application (Dobbs 2014). The threat of substitutes is high as well because most options are free and they offer the same list of deals. The threat of new entrants is notable because the cost of creating and maintaining a website is relatively low. The bargaining power of suppliers is low because all information is publicly available on the internet.

Customer Segmentation and Value Proposition

In the industry of videogames, customers have a unifying characteristic – they are gamers, whether they play infrequently or every day. However, there also exist some differences that lead to segmentation. For instance, PC gamers are interested in products that are available on computers, while console gamers will search for information about the particular console (Xbox, Play Station, Nintendo Switch and others). Moreover, each gamer has particular tastes in games since a variety of genres exist. Customer may search only for shooters, puzzles, role play games or other types of videogames.

Nonetheless, their basic needs are the same regardless of the segment. Consumers need games that they will enjoy, and they need to buy them at a low price. People may sue multiple consoles and PC launchers, so they need a list of deals that details which system has the best deals. As for the gains and pains, customers value their time and want to find the needed videogames quickly, not spending time browsing different websites (Sheehan & Bruni-Bossio 2015). Clients also want to have a way to search for specific games, including their platform, genre, name, publisher, price and date of release. They do not want to pay for access to this information and are aware that they can find it elsewhere. Furthermore, customers do not wish to see unconfirmed details about upcoming sales, but they are willing to wait for a deal if it is extremely probable in the nearest future.

The proposed application can address the needs, gains and pains of customers. It should utilise data for gathering information for consoles and PC games. The app has to have an integrated search for platforms, names, genres and other product characteristics. It should work quickly and have a simple interface relieving the pain of spending too much time on research. Finally, it cannot be expensive, utilising advertising for most customers and subscription-based systems for those who want to access special features. As a result, the business will offer each customer segment the same website and application, but the latter will have functions for tailoring – personalised searches, regular mail lists or notifications with specific deals.

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Business Strategy

The current state of the market shows that most websites do not ask their users to pay for information on deals. Thus, any models that focus on moderate or high pricing have to be discarded. It is possible to consider two positions on the Bowman’s Strategy Clock – Low Price and Hybrid. For some people, the access to services that offer deals means spending much less money overall, while others may be willing to pay a small fee for saving money on games. The perceived value, however, is not low in any of these cases since games can be expensive and sales are usually popular among gamers (McLeod 2019). Thus, by choosing the right revenue streams, the business can base its activities on the Hybrid model.

The Hybrid position implies that the consumers feel as though they are getting a product or service at the best value-price ratio. By creating an application with highly personalised features and a simple interface with a search, the company can convince clients that its advertising and pricing options are balanced with the provided results. The aspect of personalisation is what serves as a differentiating feature for this application. It should become the principal value that will provide benefit for customers and allow the company to charge people for its services.

Digital Marketing

As the offer in this business plan is fully digital, it is sensible to focus on digital marketing as well. First, it is essential to raise awareness about the new application and website. Advertising can become the first option for acquiring new clients – various websites for gamers as well as videogame-discussing pages on Reddit and similar forums will be targeted as the primary places for marketing (Eyvrigh 2016). The only place for traditional marketing that may be reviewed is magazines about videogames, but their reputation is not as high as it was before digital platforms (Gach 2018). The website and application will be represented on social media such as Twitter, Instagram and Facebook to deliver new deals and connect with clients for additional interaction. Digital communications will be used to differentiate the application from its competitors (Eyvrigh 2016). The main point that makes the product stand out is its mobility and accessibility. While websites are often not optimised for smartphones or not equipped with notifications, the present app will be fully compatible with mobile devices, offering personalised deals at requested times.

The adverts will discuss these unique features as well, showing how easy it is to search for deals for free. However, paid customers will be able to remove advertising on the application and customise searches and daily or weekly lists of exclusive deals that were selected according to their tastes. They may also track specific consoles, game developers, genres and other classifications. The brand image will be based on simplicity and time-conservation since browsing for deals is becoming more difficult each day due to the growing number of consoles and game launchers (Macgregor 2019). As the main revenue stream for both offered platforms is advertising, repeat business will be encouraged organically – customers will check the website and the application for new deals regularly. The nature of the business idea implies that clients will prefer the service to its competitors and use it again, supporting the project by returning.

Revenue Streams

The creation of the website and its maintenance is a part of the costs. The business owner will need to pay programmers and web-designers to develop the structure of the website and the algorithms that will find and sort the necessary data. Next, customer service workers will also be hired to resolve complaints and receive clients’ feedback. The domain for the website is not free as well. As for the application, it will require the same work, including programmers and designers, customer service, managers and other employees. Moreover, digital advertising will require the services of designers, editors, social media managers (SMMs) and search engine optimisation specialists (SEOs). Advertising placement costs should also be included, although their price greatly varies depending on the platform.

The main source of revenue for both the website and the application, as mentioned above, is advertising. Adverts will be featured on every page of the site as well as on the lower part of the screen when the app is open. One-time purchase of a version of the application without ads will not encourage customers to spend money again, but it will provide another channel of revenue. However, if the business becomes popular, it may introduce personalised notifications as a service-based subscription, creating another resource. Currently, many digital services operate on a subscription basis, providing customers with an ability to pay a small monthly fee in exchange for added features (Davidovici-Nora 2014). While the information featured on the app is in open access, it will be researched and tailored for a particular customer.

As an outcome, advertising is likely to remain the most stable source of revenue for the business, with subscriptions being the second and one-time purchases being the final stream. The first profits should come in after the first month of the website gaining enough traffic. Depending on the success of marketing, it can happen after 1 or 2 months after the site’s launch. The application will bring revenue later, approximately in 5 or 6 months after release.

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Website/App Interface Design

Mark-up of the website’s first page.
Figure 1: Mark-up of the website’s first page.

The current stage of development allows one to offer a preliminary model of the future website (Figure 1). The full product cannot be built on a free platform since it will contain a sophisticated search engine for deals. However, one can see that the website will include a description of the service and a call to action to download the app. Moreover, it is reasonable to display some statistics for customers that will encourage them to return to the service. For example, one may see an amount of money that they will save using the service as well as the number of deals that appear in the database every day. The website’s main page will offer testimonials from previous customers, strengthening the business-client relationship. Finally, the social media for the service will be shown at the end, encouraging consumers to leave feedback and get in touch with the firm’s employees.

The final versions of the website and the application should be usable. According to Nielsen (2012), usability can be reached if the developed focuses on five components: “learnability, efficiency, memorability, errors, satisfaction” (para. 4). The learnability will be reached when the user will easily understand how to search for deals using the services. The learnability of the current mark-up is high because it does not contain any complex structures. The efficiency is also notable due to the loading speed and simplicity of the page. It is vital to retain a simple structure of the website because its speed will decrease due to the amount of stored data. Third, the design of the platforms should be memorable- the current version uses bright orange details to attract the attention of the customer. The users should be protected from making significant errors – all pages should link to each other and allow for returning without losing data. Finally, the design should be pleasing to the eye and not distracting, and the current mark-up does not overuse colour, focusing on whites and greys in contrast to orange.

Other Considerations

The critical resource for this project is information – the developers should be able to access and analyse large quantities of data before finishing the services. Another necessary resource is internet speed- the home office and the main servers should be placed in a country with high-quality internet connection speeds. These factors may support or disrupt the work of the service since its main marketing aspects are accessibility and time-conservation.

The key partners are users themselves as well as videogame developers, launchers and publications. The data gathering process may be improved with clients’ feedback and information, and various organisations can be contacted to provide more details on how and when they post news about deals. It is vital for the business to find the most efficient ways of collecting new data and create an algorithm for its sorting.

The organisational structure for the project is rather simple since it includes only management, developers (programmers and designers), marketers and customer service. A horizontal structure will allow the employees to deliver a product with the most dynamic and flexible structure. A potential issue may arise if the company will not find a way to sort gathered data. Another problem will occur if the customer will not find an application interesting, only using the website and not interacting with paid content.

Conclusion

The present business idea analyses the market of video gaming and proposes a service that allows gamers to search for the best deals on products. The service is realised in the form of a website and an application, the latter being the primary focus of the company. Currently, there exist no competitors for such an app, thus increasing the possibility of success. Both products will bring revenue from advertising, but the application will also have to other financial sources – a one-time purchase to remove adverts and a subscription-based option for personalisation. The project will require the work of programmers, designers, SMMs, SEOs and customer service employees.

Reference List

Davidovici-Nora, M 2014, ‘Paid and free digital business models innovations in the video game industry’, Digiworld Economic Journal, no. 94, pp. 83-102.

Dobbs, ME 2014, ‘Guidelines for applying Porter’s five forces framework: a set of industry analysis templates’, Competitiveness Review, vol. 24, no. 1, pp. 32-45.

Eyvrigh, GM 2016, ‘A review of marketing strategies’, Kuwait Chapter of Arabian Journal of Business and Management Review, vol. 33, no. 3492, pp. 1-7.

Gach, E 2018, Two more gaming magazines are ending, Web.

Lee, J 2017, Top 7 sites for video game deals & bargains, Web.

Macgregor, J 2019, I downloaded an all-in-one launcher because there are too many launchers, Web.

McLeod, R 2019, PC game launchers, ranked, Web.

Nielsen, J 2012, Usability 101: introduction to usability, Web.

Schüritz, R, Seebacher, S & Dorner, R 2017, ‘Capturing value from data: revenue models for data-driven services’, in Proceedings of the 50th Hawaii International Conference on System Sciences, University of Hawaii, Manoa.

Sheehan, NT & Bruni-Bossio, V 2015, ‘Strategic value curve analysis: diagnosing and improving customer value propositions’, Business Horizons, vol. 58, no. 3, pp. 317-324.

Yüksel, I 2012, ‘Developing a multi-criteria decision making model for PESTEL analysis’, International Journal of Business and Management, vol. 7, no. 24, pp. 52-66.

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