Financial projections for an app

The course is about entrepreneurship. Our app idea revolves around creating an Application where gamers can easily find like-minded players and teams for specific electronic games. It allows users to set preferences for the kind of teammates they’re looking for, streamlining the process of forming harmonious and enjoyable gaming groups. The app also offers a virtual environment where players with similar skills and interests can connect, making it easier to assemble compatible teams. Additionally, users can use the app to communicate with each other and arrange in-game events and competitions. We want you to make some financial projections (not real) for the next three years include the income,balance sheet,cash flow statements and ratio analysis, considering Discord and Mumble as our main competitors. Note: the selling price of subscription is 9.99 SR. Use IFRS

1
Section 5: The Economics of GamerSyncer
1.0 Introduction:
GamerSyncer is aimed to bring an evolution in the gaming community experience. GamerSyncer
economic model is designed to ensure maximization of profit while at the same time delivering
an exceptional experience to the gamers worldwide.
1.1 Revenue Drivers and Profit Margins
GamerSyncer’s revenue tiers includes premium memberships which have exclusive gaming
perks, in-app purchases which cater for personalized content, and targeted ads. Table 1 shows
this illustration.
Table: Revenue Drivers and Profit Margins
Revenue
Source
Price/CPM
$5/month
Estimated
Units/Impressions
Year 1
50,000 subscribers
Total
Revenue
Year 1
$3,000,000
Premium
Memberships
In-App
Purchases
Ad Revenues
COS per
Unit
Profit
Margin
$1.25/month 75%
$3/item
300,000 purchases
$900,000
$1/item
66.7%
$10/CPM
10 million
impressions
$100,000
Minimal
Nearly
100%
1.2 Fixed and Variable Costs
GamerSyncer’s business model emphasizes lean operations with a balance between fixed and
variable costs which are as follows:
Cost Category
Detail
Amount/Cost
Fixed Costs (Annual)
Server Hosting
$60,000
Salaries (Dev & Ops)
$200,000
Rent
$24,000
Utilities and Misc
$12,000
Total Fixed Costs
$296,000
Variable Costs
Marketing & Advertising
$3/new user acquired
Customer Support
$0.50/active user/month
2
1.3 Start-up Costs
Getting GamerSyncer off the ground requires an initial investment distributed as follows:
Start-up Cost Category
Amount
$200,000
$70,000
$50,000
$10,000
575
1000
5,000
$336,575
App Development
App expenses (Logo design, etc.)
Legal
Market Research
Trademark Publication fee
Trademark Consideration Fee
Trademark registration and certificate issuance fee
Total Start-up Costs
1.4 Break-even Chart and Calculations
Break-even Point Calculation:
Break-even Quantity=Fixed Costs / (Price per Unit – Variable Cost per Unit)
Using the premium membership as a unit:
$296,000 / ($5 – $1.25) ≈ 74,400 memberships required to break even annually
After crossing the break-even point, (Marked by the dotted line), each additional membership
directly contributes to the profit pool.
Chart 1: Break -Even Chart
Break-even Chart
Number of members
120000
100000
80000
60000
40000
20000
0
1
2
3
4
5
6
7
8
9
10
11
Fixed cost &Revenue
Number of Memberships
Annual Revenue
Fixed Costs
12
3
Section6: The Marketing Plan of GamerSyncer
Section 7: The Product (or Service) Design and Development Plan of GamerSyncer
4
Section 8: The Operations Plan of GamerSyncer
Operation plan:
Backstage
Front stage
• Server management
• User interface (UI)
• Database management
• Graphics and animation
• Code execution
• Sound design
• Security measures
• Gameplay mechanics
• Monitoring and maintenance
• Community engagement
Equipments and facilities:
• Hardware: Computers and mobile phones are purchased for software
development, testing, and customer support. Additionally, network devices like
routers are bought to ensure seamless internet connectivity within the office.
• Software: A database management system is acquired to efficiently store and
manage user data and game information.
Development Environment:
• Software Development Tools: Purchased software development tools, including
integrated development environments and debugging tools, aid in efficient
software development.
Customer Support Tools:
5
• Communication Tools: Purchased communication tools facilitate interactions
between the customer support team and users.
• Customer Relationship Management (CRM) Software: This software assists in
managing customer interactions and feedback.(purchased)
Security Measures:
• Security Software and Encryption Mechanisms: These tools are used to protect
user data and ensure the overall security of the platform. (Purchased)
• Firewalls: Firewalls are employed to filter network traffic and prevent
unauthorized access. (Purchased)
Section 9: The Management Team and GamerSyncer Structure
6
Section 10: The Financial Projections of GamerSyncer