VisionMissionStrategy

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BUSINESS PLAN
? Construct a Top Game-Content
Provider
Tel [phone] MP13824318192 Christopher Zhu
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Menu
? Marketing Analysis ? Operation Mode ?
Project Analysis ? Financial Analysis
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Marketing Analysis

• 1. The Trend of World Entertainment
• 2. The Structural Change of Game Industry
• 3. The Classification and Characteristic of Game
• Products
• 4. Summary of Chinas Online Game Market
• 5. Market Data From Chinas Online Game
• 6. Analysis to Consumption Behavior of Online
  Game
• 7. Operation Mode of Current Online Game
  Operators
• 8. Online Games Contributions to Related
  Industries

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1. The Trend of World Entertainment
Opera
Movie
E-Game
100 years ago (Movie/TV Times)
1500 years ago (Opera Times)
30 years ago (Internet TimesEconomy
of Experience)
By looking back, Mankinds entertainment goes
through novel, opera, movie/TV to E-game. This
new way of experiencing entertainment is a vital
leap and it is this progress that brings
infinite opportunities to our world.
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2. The Structural Change of Game Industry
PC/CONSOLE
MMORPG
Network Game
2002
2001
2000
1995
1998
1997
1999
1996
6
3. The Classification and Characteristic of Game
Products
3-1. Classification of online games
Weak Multiplayer interactivity Strong
Weak Internet
Dependence Strong
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3-2. The comparison between online game and
PC/Console
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3-3. Online games profitability mode
Online game has remarkable profitability mode

• The solution of pirate brings great
  opportunities.
• Economy of experienceinteractivity, experience,
  rapid communication, strong adherence.
• Online game is not simple product and one-time
  consumption, but a long-time, repetitive
  consumption behavior.
• Well constructed cash collection system
• PP card, monthly card
• Revenue sharing from telecommunication industry
• Internet advertisement

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4.Summary of Chinas Online Game Market
4.1 China has a massive internet user group
Unit10 thousand
Source CNNIC Report, Jan 2003
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4-2. Online Game--An Important Amusement For
Internet Users
Amusement (Mainly on games) reach 24.6 of total
users
Source CNNIC Report, Jan 2003
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5. Market Data From Chinas Online Game
5-1. The number of online game players is rapidly
increasing
4490.6
4500.0
140.0
138.7
4000.0
120.0
3310.2
3500.0
100.0
103.1
3000.0
91.2
2347.7
80.0
2227.3
2500.0
85.2
2000.0
60.0
1631.9
57.0
1495.3
55.2
1190.3
1500.0
41.0
40.0
37.1
36.5

• 35.7

807.4
767.1
1000.0
397.5
401.3
20.0
500.0
168.1
0.0
0.0
2001
2002
2003
2004
2005
2006
Online game paying users
Online game users(10k)
Online game user increasing ratio
Online game paying user increasing ratio
2001
2002
2003
2004
2005
2006
Online game Users(10K)
397.5
807.4
1495.3
2347.7
3310.2
4490.6
Online game paying user(10K)
Online game paying Users(10K)
168.1
401.3
767.1
1190.3
1631.9
2227.3
Online game Users increasing ratio
103.1
85.2
57.0
41.0
35.7
Online game paying Users increasing rate
138.7
91.2
55.2
37.1
36.5
Online game paying user increasing ratio
42.3
49.7
51.3
50.7
49.3
49.6
percentage of paying User / total online game user
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5-2. Direct revenue from online game market
90
187.6
83.4
On line game market size(100M RMB)
180.0
80
160.0
70
140.0
55.4
60
Up to April, 1st, 2003, there are 38 online game
operating companies and 3000 professionals
120.0
117.6
50
Increasing Ratio
100.0
40
35.0
80.0
77.6
30
60.0
58.4
19.7
50.5
20
40.0
9.1
10
20.0
3.1
0
0.0
2001
2002
2003
2004
2005
2006
Increasing ratio
Online game market size
CAGR 92.6
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6. Analysis to Consumption Behavior of Online Game
6-1. Occupation
Source 17173.com, May 2003
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6-2. Age span
Source 17173.com, May 2003
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6-3.Consumption time
Duration of each time
Frequency
Source 17173.com, May 2003
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6-4. Payment
Survey for rechargeable game card purchase (
monthly ) Unit RMB
Source 17173.com, May 2003
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7. Operation Mode of Current Online Game Operators
Game Developer
Net income25-35
Content/Tech support
7-15 RMB/month/Con-current user
PP card 70-65
Sales Channel -Traditional Channel -Online
sales -Mobile payment
IDC/Telecom
Game Operator
Server Bandwidth
Sales discount 30-35
Providing content
Access fee ADSL 3-RMB/hour
PP card
User (Player)
Pay 100 PP card
Internet access fee
Pleasure from games
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8-1. Revenues of Chinas telecom in recent years
8. Online Games Contributions to Related
Industries
1999
2000
2001
2002
2431.9
3074.0
3571.9
4102.4
Telecommunication income(100M RMB)
21.4
26.4
16.2
14.9
Telecommunication income increase
36.5
64.6
132.2
184.6
Data communication income(100M RMB)
81.3
77.0
104.7
39.7
Data communication income increase
Percentage of Data Communication Income/total
telecom income
1.5
2.1
3.7
4.5
4102.4
4200
40.0
3571.9
\3700
35.0
104.7
184.6
200
3074.0
3200
180
100.0
30.0
81.3
77.0
26.4
160
2700
132.2
2431.9
80.0
140
25.0
120
2200
Data Communication Income
21.4
60.0
Telecommunication income increase
Increasing ratio
100
20.0
39.7
(100M MB)
16.2
64.6
1700
\80
14.9
40.0
15.0
60
36.5
1200
40
20.0
10.0
20
700
0
0.0
5.0
200
1999
2000
2001
2002
-300
0.0
1999
2000
2001
2002
Data Communication income increse)
Data communication income
Telecom Income(100M RMB)
Telecom income increase
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8-2. Online games contributions to related
industries
Contribution to media and publishing
18.2
32.8
Contribution to IT
68.3
Contribution to Telecom
9.1
Online game market size
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Unit hundred M RMB
Data sourceIDC,2002.12
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Operation Mode

• The Best Entry Time to Online Game Industry
• Operation Mode
• Profitability Mode
• On Investment Operation
• Operator Background (Gamehome)
• Appendix Management of Gamehome

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1. The Best Entry Time to Online Game Industry
1-1. 2003-2004 is the best investment time since
the operation mode is relatively mature but the
development is at the early stage.
Preparative stage
? Before1997?
? 1997-2001?
? 2002-2005?
? 2005 later?
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1-2. Market dimensions In china, there are
over 10 million online game players and will up
to 15 million at the end of this year. In 2003,
the direct revenue of online game industry is
more than 2 thousand million RMB.
2001
2002
2003
2004
2005
2006
397.5
807.4
1495.3
2347.7
3310.2
4490.6
Online game users (I0K)
168.1
401.3
767.1
1190.3
1631.9
2227.3
Online game paying users(10k)
103.1
85.2
57.0
41.0
35.7
Online game user increasing ratio
138.7
91.2
55.2
37.1
36.5
Online game paying user increasing ratio
42.3
49.7
51.3
50.7
49.3
49.6
Total online game user

• 1-3. Market saturation demand exceeds supply.
• 38 online game operators, 3000 professionals, 57
  games.
• On average, each people contributes production
  value of 2 M RMB
• Each game on average has 1 hundred and 20
  thousand users and annual revenue is 35 M RMB.
  (summation of operation cost and property right
  fee is less than 10 M RMB.

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2-1. Operation Mode

• Game operation(1 st year). Through operating
  one or two games, becomes one of the mainstream
  operators and establishes a stable, solid market
  and financial base
• for companys long-term development.
• Construct game portal(2 nd year). Provide chat
  platform, game forum, AVATA, virtual community,
  casual game and value added mobile telecom
  service, etc.
• Develop Chinas top quality game(3 rd year).
  Game in nature is of culture, therefore the one
  which has vitality must be characteristic of
  local culture. Due to the unsatisfying
  production quality in Mainland China and Taiwan,
  We will combine the advanced developing platform,
  technology and originalities to create top
  quality and cultural game.
• Develop game related products(4 th year).
  Utilize the game derived images, stories
• to compile and publish merchandising
  products such as books, develop cartoons, toy,
  stationery, etc.

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2-2. Operation Mode
1-2.????
1. Game Operation
2. Game Portal

• Strategy
• Industry chain interaction
• Resource integration

Strategy
3. Game Developing
4. Merchandising Products
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3. Profitability Mode
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4. On investment
4-1. Investment amount and manner

• ? Investment amount 2.0 million USD
• ? Share holding Investor holds 49 of GameHome
  shares and
• GameHome management holds 51(the percentage is
  based on the
• whole team, resources both in China and overseas,
  operation,
• previously invested capital).
• ? During investment process, the nature of
  GameHome will not be
• changed. The reason is that GameHome as a Chinese
  company held
• an ICP license and could apply e-publishing
  license, both of them are
• necessary for online game operation . And this
  is very difficult for a JV
• or WOFE to apply in China.
• ? Tri-angle investment A normal VC operation
  manner in China.

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4-2. VC Operation

• ?IPO
• Online game market is massive in China, GameHome
  plans to go
• public in NASDAQ or Hongkong within three years.
  VCs investment
• return can be obtained through this.
• ?GameHome purchase
• To make the VC safe, GameHome plans to purchase
  back VCs shares
• in two years if VC want to exit.
• ?Capital M A
• If there is normal operation, GameHome plans to
  seek MA opportunity
• both in China and overseas. Currently many listed
  companies are
• seeking the entry point in game industry.
  Through this VC can sell its
• shares of GameHome and minimize its investment
  risk.

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• 4-3. Financial Control
• ? Independent CFO. VC can nominate CFO in
  GameHome
• to control the budget and financial operation.
• ? Budgeting system. GameHome exercises the WOFE
• financial policy for monthly yearly budget. We
  have the
• well-operated system for this.
• ? Transparent financial system. Regular operation
  
• finance report to BOD, third party auditing
  exercise etc.

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5.Operator Background -Gamehome

• Set up in 2002, Gamehome is a Shanghai based
  professional online game operator in
• China. With top operation team which is joined
  by senior and experienced game,
• entertainment or IT professionals, Gamehome has
  successfully or uniquely involved in
• the mainstream of the industry. In the past two
  years, Gamehome established
• reliablePartnerships, owned reasonable resources
  and constituted a promising project-
• oriented strategy for online game operation in
  the market place. Gamehome has put
• a totality of two million and five hundred
  thousand RMB for two years operation.In Oct,
• 2002, Gamehome signed the sole agency contract
  with Koreas SIS Global Inc for the
• online game of Fantasy For You II-IM ONLINE. The
  developer of the game is Koreas
• EYAGI INC. Fantasy For You ?was very popular in
  Korea and Taiwan, and Fantasy
• For You II is better in terms of graphic,
  content,etc. The license fee for the game is
  four
• hundred thousand USD plus 27.5 of net income of
  game operation. Gamehome paid
• fifty thousand USD as a deposit on contract
  signing. For the project, Gamehome
• conducted successful marketing, technology
  preparation and market expectation showed
• that Fantasy For You II was dominated over
  LINEAGE, ranked No.1 in game bill board.
• But the investment did not come on time, the
  project was unfortunately suspended. But
• Gamehome keeps key staff members separately in
  Beijing, Shanghai and Shenzhen to
• source game and raise money in order to continue
  development.

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5.Operator Background -Gamehome

• Gamehome operations
• 1. April, 2003. Signed MOU with the largest
  internet evaluation company AC
• Nielson//Net Rating, mutually agreed to establish
  the online game testing and rating
• system, a pioneering action in Chinas game
  industry.
• 2. April,2003. Agreement with CNC and mutually
  agreed CNC provide Bandwidth service
• to Gamehome.
• 3. April, 2003. MOU with KGIA(Korea Game
  Industry Alliance ), mutually agreed to
• promote Korean games in China.
• 4. May, 2003. Signed MOU with KT(Korea Telecom)
  reached consensus that both sides
• would establish game portal in China and publish
  ten games that KT own licenses.
• 5. June, 2003, MOU with e-frontier, a game
  developer and license company in Japan.
• Gamehome is entitled to operate such value-added
  services as MP game, MMS, CG and
• MP ringing.
• 6. Oct, 2003. Signed cooperation agreement with
  Beijing Xingge Technology(a value-
• added content provider for China Unicom),
  mutually agreed Gamehome provides mobile
• service to Xingge and China Unicom.
• 7. Sept, 2003. MOU with Demers Soft Inc of Korea
  for technology cooperation and co-
• develop games. And Demers Soft Inc provides game
  developing engine.

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Appendix 1 Management

• James Li-CEO
• Over 6 years experience working in internet
  eCommerce business field in executive management
  roles.
• -CEO, MeetChina.com (MeetWorldTrade.com)
• James setup 12 WOFE operation 12 major cities
  (Beijing, Shanghai, Guangzhou, Chendu etc) in
  China, built up unique
• B2B model, achieved 8 million USD annual sales
  revenue, led MeetChina became a leading B2B
  Portal in the world.
• -CO-Founder President of ChinaByData.com
• Online marketing company, which merged into
  MeetChina finally.
• -Vice General Manager, Huafeng Food Industry
  Group
• Worked as marketing manager, BD manager, and
  finally as VGM, established 3 new JV which
  involved in 3 Billion
• RMB total investment.
• Training Financialmanagerial acounting/
  ISO9000(external inspector certificate)
• MBA, Golden Gate University, San Francisco.
  Bachelor of Engineering, Hubei Technology
  University, Wuhan.
• Christopher Zhu-Vice President
• -GM, Shenzhen Chunlin Investment. Co., Ltd.
• -President for Asia Pacific Region, Sherwood
  International(US based FB and Entertainment
  operator,investment
• equity)
• -GM of Xiamen Company, MeetChina.com(Meetwordetrad
  e.com)
• -Ass. GM, Shenzhen Window of the World Tourism
  Development

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Appendix 2 Management

• Wang Lei-COO
• Over 3 years online game operation marketing
  experiences in executive management roles.
• -Marketing Manager, Assistant to General Manager.
• In charge of productizing marketing of Stone
  Age The 4th Coming (T4C)
• -Marketing Director, GreatelSoft
• PDA software contents development
  distribution, set up distribution agreement with
  Handango
• PocketGear.
• -Co-Founder VP, Hanwawa Co.LTD
• Established the company from the very beginning,
  Operating the game Noe Dark Saver from
• WizGate.
• BE, Computer Science, China University of
  Geosciences
• Bofeng Li-CTO
• Over 8 years experience working in programming
  system configuration, thereinto 4 years game
  development experience.
• -Development Team Leader, System analyst
• Developed Three Kingdom, BLchat, Tang
  Dynasty Poem etc. Two patents holder.
• -Tech Director, Go4IT Technology
• Developed e-Learning system for HP, 6 Sigma
  application system for GE, training system for
  China Netcom.
• -CTO, Octiga Soft

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Appendix 3 Management
Wang Jianfei-marketing director Over 6 years game
industry experiences. --2001/07-Current,
Marketing manager of TWP, a famous Taiwan based
company Involved in Dragon Raja, Three
Kingdom etc. --1997/04-2001/07 Marketing manager
of Soft World International Corp, one of the
biggest game company in China Taiwan. Involved
in various products including PC package game
online game. Ma Ting-operation director --Product
manager, the Biggamer, one of leading PC package
game publisher in China Involved in SAKURA
WARS, Return to Castle WOLFSTEIN, House of
Dead etc. --Project manager, Asiagame --Editor,
Software CDROM, one of the biggest magazine
in game industry.
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Project Analysis
1.Korea partner background (Mgame) 2.Product
analysis-Lunentia 3.Product analysis-Repent2 4.Con
tract terms 5.Marketing strategy
(Lunentia) 6.Sales strategy 7.Operation
plan 8.Competitive advantage
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1.Korea partner background Mgame

• Mgame is leader of the online games in Korea,
  established in 1999, Mgame Corp.s (Formerly
  known as Wizgate Corp) core members had been
  working on online games even before its
  establishment. The first online game, Dark
  Saver has been developed ever since 1996 and was
  ready for service in 1997.
• Mgame have over 10 Million people registered as
  members for Mgame.com, 2 million for Darksaver,
  800K for both Droiyan online Myth of Soma, 3
  million for online Worms, 1.5 million for
  Bomberman online. The total registrant for the
  companys service comes out to be around 13
  million with about 100K concurrent users logged
  onto the service in Korea.
• President Son, Seung Chul Number of employees
  297 Capital 1,644 million Korean won
• Mgames product mgame.com (game portal), Droiyan
  online, online Worms, Online Bomberman,
  Neodarksaver, The myth of SOMA, Darksaver, Knight
  online, Repent online. Except the game
  portal-mgame.com and The myth of SOMA, all others
  7 games had been provided service in China
• Awards
• 2001.2 Korea Web Award 2000 (Korean Times)
• Commercial Resource Award (Commercial
  Resource)
• 2001.8 Awarded Superior New-tech Co., by
  Technology Credit Warranty Foundation
• 2001.12 Received a Grand Prize for Korean Venture
  Company-Korean Achievement Association
• Received a CTO Grand Prize for Korean
  Venture Company-Korean Achievement Association
• 2002.11 Mgame Received a Grand Prize from
  Hitweb 2002 for online Game-sponsored by Korean
  Times

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2.Product analysis Lunentia
Current status

• Ranking10th place (AVG.) in Korea
• Service Open-Beta (Since Nov.2003)
• Major target
• Women, young online gamers
• Beginners, family members
• Style Cute, cartoon
• Technology Full 3D MMORPG
• Members 1,100,000
• Visitors 300,000 daily

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2.Product analysis Lunentia

• Full 3D characters, backgrounds
• 4 players classes (warriors, fighters, rangers,
  magicians)
• Select-Map system (for easy transportation)
• Unique auto-navigating system to target position
• In-game internet radio
• Players versus player battle by wearing mask(PVP)
• Trading vending system
• Chatting system messenger (Guild, friends,
  party, couple)
• Party system
• Gold chest/roulette system
• Boat feature when crossing deep water
• Class converting system

Notes the features with red color are unique
system which others game dont have currently.
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2.Product analysis Lunentia
Features to be added

• Guild system
• Facial motion system
• More skills magics
• More armors weapons
• More maps/dungeons
• More monsters/Boss monsters
• Siege system (controlling a map or location)
• Private rooms
• Marriage/Couple system
• Kissing system

Notes the features with red color are unique
system which others game dont have currently.
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2.Product analysis Lunentia
Characteristics

• Full 3D technology with 3rd personal view (Which
  fit Chinese players)
• Colorful brilliant graphics
• User friendly interface
• Focus on building user community
• Many cosmetic items (Shown on actual game play)
  such as weapon, shoes, gloves, shirts, skirts,
  masks, glasses
• Relatively easy fast level up
• Softcore MMORPG, suitable for women, children,
  family, online game beginners)

Notes the features with red color are unique
system which others game dont have currently.
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3.Product analysis Repent2

• Style Heroic Fantasy MMORPG
• Official website www.repent-online.com
• Service Open-Beta (Since Dec.2002)
• Technology Full 3D MMORPG
• Main features
• Two races, each race has 4 classes (warriors,
  soldier, rangers, magician)
• Guild system, party system
• Siege warfare system
• Various items and equipment with different
  attributes.
• Economic system
• Territory build up system

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3.Product analysis Repent2
Analysis Repent2 is a game like Legend of Mir or
MU, which have majority of game players in China.
Repent2 had some unique system races system
Siege warfare, economic system territory system
etc, which most of 3D MMOPRG dont have
currently, even current top game-MU dont have
these feature and planning to add them. Game
with races and siege warfare system could attract
thousands of game fans. For instance, Dragon
Raja(2D game) had races system, three years ago,
this game become number one both in Korea and
Taiwan, although this game have been served for 3
years in China, it still has about 20K concurrent
users. To actualize this function in 3D
MMORPG is not an easy way, that is why so many 3D
MMORPG wanted to add this function but failed.
Repent2 can take advantage of this
function/system to become a big hit in heroic
fantasy MMORPG market.
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4.Contract terms

• License fee 800K-1,000K USD for Lunentia
  Repent2 together (Price would have a little
  change depends on how fast we could move).
• Payment schedule 30 within 20 days from
  contract sign, 40 within 20 days after open beta
  testing, 30 within 20 days after commercial
  service.
• Revenue sharing (running royalty) 27 of net
  income (gross income deducting 30 sales cost).
• Duration three (3) years after signing contract
  term of sell-off three (3) months after the
  contract finished date. Another 1 year would be
  free after 3 years if both parties didnt object.

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5.Marketing Strategy (Lunentia)
Product positioning
????
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5.Marketing Strategy (Lunentia)
Competitive analysis

• Market situation timing

• 1. China have a huge cartoon game market,
  occupy more than 40 of market share and is
  getting bigger constantly.
• 2. Cartoon games are much less than
  heroic-fantasy style game, most of them are very
  successful, such as Stone age, Cross gate, RO
  etc.
• 3. Most of cartoon games are approaching their
  life cycle problem, there is a huge demand on
  cartoon game in 2004.

Heroic fantasy
Cartoon
Game style
40
60
Market share
Legend of Mir./LeneageII
Outstanding game
Cross gate/RO

• Competitors comparison

45
SWOT analysis
5.Marketing Strategy (Lunentia)
SWOT analysis
W(Weakness)
S(Strength)
1.Fully, in-depth marketing research
planning. 2.Excellent operation experience of the
management team. 3.Good relationship with media
distribution channel. 4.Good relationship with
related government department.
1. Lunentia has low brand awareness in China 2.
Dont have strong financial support
O (0pportunity)
WO Difficult to occupy significant market
share .
SO Easy to achieve expected income, make profit
1.Lack of cartoon games in China, less
competition. 2. Main competitors already operated
2-3 years, it is the time when new products
replace old ones
T(Threaten)
ST Can exactly judge the market demand and make
proper marketing strategy, which reduce operation
risk. Can source high quality products Product
style is very healthy, easy to match government
policy.
WT Difficult to promote the product, and
difficult to remain users base.  
1. Industry competition getting intensive 2.
Investment is getting higher 3. Lack of
professional management team 4. Lack of high
quality products 5. Governments regulation
regarding foreign game is getting harsher.
46
5.Marketing Strategy (Lunentia)
Integrated marketing
IDC cooperation

• Server and bandwidth sharing,
• Dial-in application as one of billing method
• Local promotion by leverage IDCs local resources
  (such as internet bar)

Internet bar alliance

• Flagship/workshop internet bar
• Off line outreach and promotion
• PP card/client CD/Poster distribution

Co-Branding Bundling

• Sales bundling, bundled with hardware manufacture
  such as Lenovo, ASUS, IBM, DELL.
• Co-branding with some well-known and favorable
  brand such as KFC, COCOLA, to increase games'
  popularity.
• Integrated with MSN, QQ, say the player can get
  free game playing time by converting his usage of
  MSN or QQ.

47
5.Marketing Strategy (Lunentia)
Promotion outline

• Lunentia is a women-oriented game, with lots of
  interactive elements insight the game. Such as
  chatting, dating/marriage, messenger, community
  system, as well as others MMORPGs normal
  features. So we can promote this game as the
  fist design-for-women game in Chinas game
  history, The time of female game is coming!!,
  Lunentia would be granted as the new pioneer of
  Cartoon MMORPG.
• The whole promotion would be laid out by a series
  of campaign/event, emphasizing on three themes
  friendship, love and mystery.
• Friendship seeking for true friendship in the
  mystery game world
• Love true love would come at the end in mystery
  world!
• Mysterymysteryeverything is mystery and
  fantasticwaiting for your exploring!

48
5.Marketing Strategy (Lunentia)
Media strategy
Cooperated media
Professional industry magazine good relationship
with more than 20 game magazines
Popular paper magazine good relationship with
more than 50 national IT paper and magazine
Portal site Close relationship with Sina,
Netease, Sohu game channel
Game portal more than 50 game portals
TV Close relationship with the most famous TV
column????
Maintain close relationship with major famous
individual game forum and organizations

• Advertisement Ads on hot spot
• Soft media game content introduction, soft
  article
• Co-promotion Product roadshow promotion with
  media together

Model
Strategy
4 Burst campaignPulse pattern
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5.Marketing Strategy (Lunentia)
Prioritization
First stage national coverage. (1st-3rd
month) (online media would be major tools for
online game, most of those are national coverage
Second stage national coverage big
campaign/event promotion on first tier cities
(2nd-6th month) (First tier cities Beijing,
Shanghai, Guangzhou, Chendu/Chongqing, Xian)
Third stage national coverage campaign or
local promotion on second tier cities (4nd-8th
month) (Secong tier cities Shenyang, Hangzhou,
Tianjin, Nanjing, Changsha, Shenzhen, Xiamen,
Qingdao, Wuhan, Suzhou, Hefei, Zhenzhou etc)
Fourth stage regularly promotion/event,
remaindering. Special campaign on new upgraded
content
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6.Sales Strategy
Traditional sales channel
Traditional channel
Major sales channel for PP card distribution, end
sales of this channel is thousands of software
retail store around every cities. This channel
occupy 40-60 of total sales. Two system have
already been well- built up one is franchise
store, HQ purchase PP card and distribute to its
retail store another one is distribution system,
thousands of retail store some major
wholesalers and distributors, intensive
competition and price sensitive.
Book distribution channel
Book publishing company, book store, news paper
magazine store etc, so-called second channel.
Occupy 20-40 of total sales.
Very powerful channel, 3,000 branches in China
with very good location, big place, and good
brand. We are going to develop this channel in
2004.
XingHua book store
Mail-order
Mail order is very effective to cover some
country side, and easy to increase band
awareness.
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6.Sales Strategy
Online sales channel

• Online sales for virtual PP card
• All game players are internet users, they are
  very familiar with online payment, with deposit
  card or credit card or even mobile SMS, they can
  easily to purchase PP card on our website or
  others online sales portal.
• Online sales for PP card
• For internet bar or some special place, with
  special printing facility, to print the PP card
  out, which is like a simplified PP card.

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6.Sales Strategy
Sales policy

• 1. Channel policy
• First stage, nation-wide whole seller. As talked
  with three major whole sellers (Jinghe, Zhiguan,
  Junet), we can get their offer
• 25-30 whole seller discount on retail price
• Minimum monthly sales guarantee, normally equal
  to average concurrent user4
• First down payment, as 10-30 of average
  concurrent user20012month (if it is half-year
  contract, then times 6 month).
• Second stage, regional whole seller. Divide to
  several major regions, each region setup one
  whole seller.
• 2. Pricing Point card 0.4 RMB/hour Monthly
  card 40RMB/month

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7.Operation plan
1.Prelaunching stage ?.Collect detailed
marketing information and analyze
competitors. ?.Marketing preparing, promote
suspensive concept for our game through all
kind of media ?.Detailed game testing
report. ?.Server structure software
solution ?.Soft article preparing ?.Server
program testing ?.Database system testing
4. Commercial service ?.Implement large scale PR
event ?.Large scale Ads and soft article ?.Smooth
sales channel, develop new channel ?.Develop
various cooperation with all kinds of
distribution channel, provide multiple
payment method purchase channel. ?. Regional
promotion event
2. Close beta service ?.Release Ads. and soft
article, PR event ?.Launching games official
website, full introduction about game,
attract register user ?.Conduct game
testing (close beta test), bug fixing,
balance adjustment. ?.Game upgrading to suit for
Chinese game players ?.Correct the
translation ?.Ad/poster design ?.Online event
planning ?.Game master management system
development
3.Open beta service ?.Large scale media
campaign, increasing product awareness. ?.PP
card production ?.Related package design and
production ?.Server running test ?.PP card
distribution ?.Promotion event
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7.Operation plan
55
8.Competitive analysis

• Strong support from partner. Mgame is one of top
  five games company in Korea, currently had 7
  games serving in China, Mgame had successful
  cooperation service experiences with Chinese
  partner, good understanding about Chinese culture
  market most important, they can provide very
  strong technical support for game operation which
  most of Korea game developer couldnt provide
  with.
• ePublishing license. From this year, Chinese
  government has very harsh policy on foreign
  online game, every foreign online game need to
  apply epublishing license before it is published
  in China. ePublishing license has been become
  more and more difficult to get right now for
  foreign games. Mgame already agreed to sign a
  co-development contract and source code for us to
  apply epublishing license, by which, we only
  need to apply epublishing license as local game.
  (The epublishing license of local game is much
  easier to get than foreign game)
• Cost/License fee. We only need to 800K USD
  license fee for two games. Currently one game
  such as Lunentia or Repent2 normally sold out
  between 700K-1,200K USD. Which means we only pay
  half of the license fee of our competitors.
• Operation risk. We have two type games which fit
  two type of customer taste, by which we , dilute
  our operation risk.
• Product quality. Quality of Lunentia Repent2
  are much better than others.

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8.Competitive analysis
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Financial Analysis

• Appendix 1 Investment Budget
• Appendix 2 Sales Forecast
• Appendix 3 Human Resource Plan
• Appendix 4-6 Yearly PL

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Appendix 1 Investment Budget
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Appendix 2 Sales forecast
Concurrent number
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Appendix 3 Human resource plan
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