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Communication For Managers

Case Assignment No. 1


Case Analysis Report on

‘GAME COLAB: CAN IT CONNECT INDIE GAME


DEVELOPERS?’

Submitted by:
Name: Chirag Pugaliya
Roll No: 171413
Section: D
Batch: MBA – FT (2017-19)

Institute of Management, Nirma University


Date of Submission: August 08, 2017
Case Assignment Report

Situational Analysis
In October 2013, Ben Reichert and Joseph Darnell established a startup Game CoLab. Darnell
earlier worked in Startup Chile program and also taught entrepreneurship in Mexico whereas
Reichert was the chief executive officer and cofounder of Abeona Games, an Arizona based video
game design and development studio. Thus, both of them were expert in startup arena. The startup
was a collaboration of two independent ideas which both of them were exploring while continuing
their education. Darnell came up with the idea of co-working place whereas Ben came up with idea
of identifying and connecting local indie game developers.
Darnell conducted industry analysis (Exhibit: 1) to identify the feasibility of co-working concept.
On the basis of researches and surveys conducted by Deskmag and Forbes, it could be seen that co-
working spaces was a viable business model with huge potential of growth. Furthermore, Darnell
interacted with the owners of only two co-working spaces of greater Phoenix area, CO+HOOTS
and Gangplank. Soon he realized that CO+HOOTS focused on creative professionals and designers.
On the other hand, Gangplanks, partly funded by Chandler, focused on software developers. Thus,
Darnell was very much sure there was ample space for new entrants in the industry. Moreover,
CO+HOOTS recently expanded into a new space which shows that there was demand for co-
working place in locality.
At the same time Reichert realized that indie video game developers appeared to be a large and
completely disconnected community. He knew that independent video games market was on a
boom because of new distribution channels, such as steam, opening up for the developers. As a
result the individual developers can launch their games in market without much investment
Moreover; developers had options such as crowd funding platforms like Kickstarter for funding.
But, if the developers were connected with each other they could come up with new innovative
concepts with the help of each other’s skills and knowledge.
Both of them started up structuring their business model on the basis of lean Startup methodology
which was action oriented and focused on getting continuous feedback from customers to improve
business and thus eliminating wastage. This ideology also satisfied the interest of both i.e. socially
conscious startup that contributed to community. Then Reichert invited 11 members to review the
CoLab value proposition. According to Reichert as per their membership rates, they could recover
the non-personnel costs with as little as dozen members i.e. the revenue generated from the
membership fee of 12 members will lead them to a break-even point. All their expenses would be
recovered.
Soon Darnell and Reichert decided a location and the Game CoLab was a reality. However there
were certain issues such as parking space, connectivity with corporates, and etc. But majority
members were very much satisfied. Soon the number of members increased but Darnell and
Reichert never considered non-vanity metric as success parameters. This showed that they applied
their management knowledge in their business. They had a variety of mix in members like students,
professionals, part-timers, etc. But it can be observed Game CoLab was major attraction for
professionals because their count increased most by the end of month. Meanwhile, four membership
plans were designed which were offered on month-to-month basis. Game CoLab conducted three
free events successfully to attract potential members.
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After few months, problems started surfacing. Several initial members cancelled their membership
stating high fees; certain members cited that they had to leave by 6 p.m. whereas they liked to work
during evening. Revenues started falling, to combat it Darnell and Reichert decided to put a $10
entry fee with a month’s membership free for attending events. They also faced location challenge
because property owner hiked the rent which was not in budget so they had to shift location which
might cause inconvenience to members but there were certain strategic advantages of new location.
At the same time they cited opportunity to tap the new markets in the form of educational institutes
and corporates which were pursing the gamification strategies which was latest trend. To grab the
opportunity they might would to shift their focus from MVP business model. It could act as an
incubator startup to link the market with indie game developers. Thus, Game CoLab was in
dilemma that it should focus on its traditional market i.e. indie developers or tap the new
opportunity.

Problem Statement
Game CoLab was facing major problem of connecting the local indie developers for longer time
period i.e. membership retention rate was low. Furthermore, they should restructure their business
model or not.

Objectives
 Retain the old memberships.
 Convert the new leads from the event in to members.
 Shift to the new location.
 Expand to the new markets.

Options:
 Tap the new markets, corporates and the institutes, by pivoting the business.
 Focus on traditional markets and retain the old memberships by incorporating necessary
changes.
 Seek help from venture capitalist and other investors to establish.

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Evaluation of Options:
 Tap new markets: Game CoLab should focus on new markets because it will increase
revenues by multiple times (Exhibit: 2.2) and thus help the startup to grow.
 Focus on traditional market: By concentrating on MVP concept the startup could satisfy its
members and survive in the market. But it won’t help the startup to grow and develop.
 Help from venture capitalist: By seeking help from investors and venture capitalist the
startup would definitely overcome current issues but it would limit the entrepreneurial spirit
of its founders by the influence of investors in day-to-day business.

Decision
Game CoLab should tap the new market which is driven by gamification strategies.

Action Plan
Replace month-to-month membership plans with a minimal annual membership fee and charge
commission on the revenue generated by the indie developers by cracking the deals with the clients
in the workshops.

Contingency Plan
They can focus on traditional market of indie developers by introducing new membership plan
focused on the number of hours/day a developer can access the facility as per their own
convenience. Thus, abolishing the previous time limit of 6 pm.

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EXECUTIVE SUMMARY

Game CoLab was a startup by Darnell and Reichert. The startup was a collaboration of two ideas
i.e. co-working space and connecting the indie developers. It was based on lean startup technology
and focused on MVP business model. After some time they started facing problems such as low
membership retention rate. At the same time there was an opportunity to expand by catering the
increasing demand for gamification in the educational sector among the institutes and the
corporates. Game Colab was facing dilemma regarding focusing on its traditional market or to grab
the opportunity. Ideally it should grab the opportunity.

Word Count: 100 words

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EXHIBITS

EXHIBIT 1.0

Porter’s five forces model (Industrial analysis)

Threat of new entry


Very high
Co-working space
industry is growing at
great pace.
Presently only
CO+HOOTS &
Gangplanks major
player

Bargaining Bargaining
powers of
suppliers powers of
buyers
Negligible
Mediocre
Its a service
industry. GAME COLAB Developers have
Suppliers exist in (Co-working industry) funding sources
form of owners but lacks
who rent their connectivity which
space. is key value
proposition of
Game Co-lab.

Threat of substitute
Negligible
Co-working space
for indie game
developers is very
niche segment

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EXHIBIT 2.1

Break-even point analysis:


As per case majority members opted for $50 per month membership.

Membership Fee (F) Number of Members (N) Total (F*N)


$50 9 $450
$200 1 $200
$350 1 $350
TOTAL 11 $1000

Initially Owners states that with membership of 11 members they would recover their non-
personnel cost i.e. their expense was approximately $1000- $1200

EXHIBIT 2.2
Initially revenue was $ 3000 when they tried to pivot business by conducting workshop and focused
on corporate clients.
Suppose they conduct 5 such successful workshops in a month.
Thus, revenues = 5*3000
= $15,000

GAME COLAB INDIE DEVELOPERS

=20% Commission =80%

= $3,000 = $12,000

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UNDERTAKING

To Whom It May Concern:


I, Chirag Pugaliya, hereby declare that this assignment is my original work and is not copied from
anyone/ anywhere. If found similar to other sources, I shall take complete responsibility of the
action, taken thereof by, CFM Team.

The total word count of main report is 1100 words which includes executive summary of 100
words.

Signature:
Name: Chirag Pugaliya
Roll No: 171413
Section: D
Batch: MBA – FT (2017-19)
Date: August 08, 2017

Word Count
Main Report: 1000

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