Startup Proposal Assignment
After the rise of the gaming industry in the 1950s, it has been evolving continuously and has become a major form of entertainment for everyone irrespective of age. In fact, the induction of mobile gaming in recent years has gained momentum and is becoming popular among people due to the portability and the graphics processing capabilities of inexpensive mobile phones. We also saw the release of various gaming consoles like the PlayStation and the Xbox. However, most gamers still prefer PCs over mobile phones and gaming consoles, the reason being the ultimate experience and the availability of a vast collection of games exclusively developed for operating systems like Windows. Unfortunately, a gaming PC with such capabilities can be very expensive.
With the evolution of technology, cloud computing has emerged as a popular alternative to traditional data centres and it is evident that cloud computing is the future of data storage and virtualization. Clutooth Cloud Gaming proposes to offer a low latency cloud gaming platform as a service which would eliminate the need for buying expensive graphical processing units for high-end 4K gaming.
The users will be able to play games with high graphics requirement from a variety of operating systems such as the Windows OS, Linux OS, macOS, Android, and even their browsers. This startup has extreme potential provided the low competition in the Indian market and the high profit to loss ratio.
The global gaming industry had a market value of $151.55 billion in the fiscal year, 2019. According to a recent report by Newzoo’s senior marketing analyst Tom Wijman, this valuation is expected to top $159.3 billion in revenue by the end of 2020.
There is a lot of demand for a cloud gaming service in the market and with the current pandemic, people are transitioning towards indoor gaming, thus increasing the market demand for this product significantly.
RELEVANT PRODUCTS IN THE MARKET
The idea of cloud gaming is relatively new in the market and it is rapidly growing with a few companies offering this service. Fortune 500 companies like Google, Sony and Microsoft have developed products like Google Stadia, PlayStation Now and XCloud. Other similar products include Shadow and Vortex Gaming. This startup is an extreme game changer in India because these services are only available to the residents of the United States and there is only one competitor, The Gaming Project in the Indian cloud gaming market. This idea is novel as compared to other existing products in the market because it can generate high revenue with a low initial investment.
“India recorded about 365 million online gamers in the financial year 2020. This number is estimated to reach 510 million by the fiscal year 2022,” according to Statista.com.
The service will be mainly targeted to Indian residents because there is only 1 existing product in this field in India, while there is a huge demand for such a product. And, since 55% of gamers are in the age group 10 and 24 years, we believe that they are potential customers which can be turned into regularly paying customers easily. It is expected that the conversion rates will be higher in urban regions because of the higher availability of basic technological equipment required to access the service.
TECHNOLOGIES AND EXPERTISE REQUIRED
An array of technologies is required for the success of this startup.
Web Development expertise is required for the development of the frontend website.
For the backend, AWS Elastic Cloud Compute (EC2) reserved G4 instances in Mumbai region with up to 4 NVIDIA Tesla T4 GPUs, 48 vCPUs and 192 GiB of memory will be used to deploy the cloud gaming infrastructure.
The EC2 instances will be deployed with the Microsoft Windows Server 2019 Base AMI. Expertise in Python programming language and AWS Lambda service is required for EC2 automation.
AWS Elastic Block Storage (EBS) will be used for hosting virtual machines and storing the games. AWS Systems Manager and AWS SDK will be used for debugging and troubleshooting tasks. AWS CloudWatch and Cost Explorer will be used for setting alarms and managing the costs. AWS Direct Connect will be used for reducing the data transfer costs significantly.
Expertise in Microsoft Windows Server administration is required for managing the active directory and group policy objects.
Remote desktop access technology is required to allow the users to access the virtual machines deployed on the cloud from their device.
The frontend and the backend of the cloud gaming platform will be deployed on a reputed cloud provider like AWS.
The users will visit our website, where they can view the various pricing plans and purchase one of the plans to register. After the registration on the website, an AWS Lambda function will be triggered to manage the authentication and authorization of the user with the domain’s active directory (AD). If the user is accessing the website using a web browser, he will be redirected to a web page with remote access to the virtual machine deployed on one of the EC2 instances. The user will be automatically logged into the Windows user account created with the active directory. The user can then play games and leave the session by logging out. After the user logs out of the website, a function will be triggered in AWS Lambda to log off the user from the session in the Windows virtual machine, thus closing any application running previously. Python will be mainly used for automating the EC2 fleet.
Regular monitoring and system checks will be carried out using AWS Systems Manager and AWS SDK.
Remote desktop and mobile access technologies will be used for streaming the game from the virtual gaming machine to the user’s device.
The games will run on the Windows operating system and hence Microsoft Windows Server administration will be used.
The authentication of users will be done using Active Directory connected to the startup website domain.
The breakup of the estimated budget is as follows:
- Website development, hosting and maintenance cost: ₹20000 per annum
- 200 GB EBS General Purpose SSD (gp2) Volumes: ₹1450 per month x 12 = ₹17450 per annum
- g4dn.xlarge Microsoft Windows Server 2019 Base AMI Amazon EC2 reserved instance pricing in Mumbai region: ₹337891 per annum
- 1 TB estimated monthly data transfer costs using AWS Direct Connect (₹3.31/GB/Month) = 3310 per month x 12 = ₹39720 per annum
- Human resource costs = ₹50000 per annum
Total estimated budget = ₹465061 per annum
The pricing will be split into three tiers: “Fortnightly Pass”, “Monthly Pass” and “Hourly Pass”.
Each pass will provide varying access to the registered user.
The Fortnightly Pass will provide the user with a state of the art gaming experience and sophisticated access to the cloud gaming services for 15 days without any hindrance at the price of ₹699.
The Monthly Pass will provide the user with an unparalleled gaming experience and access to the cloud gaming services for 30 days at the price of ₹1400.
The Hourly Pass will be a great plan for users who wish to pay only for the number of hours they utilize the cloud gaming service and play. The hourly pass will cost ₹50.
The passes need to be purchased before playing and will be valid only until their expiry.
The major target audience for this startup is internet users. And among them, the ones who play, search and read about games on the internet are a much more specific audience.
The product will be marketed digitally to reach a wider audience across multiple regions in India.
Facebook Ads and Google Ads CPC and CPA campaigns will be used for increasing the reach of the cloud gaming service significantly across India.
Display, video, and brand awareness advertisement campaigns will be used to generate leads and drive conversions on the website.
Social media marketing will also be used for promoting the brand and creating awareness among people between the age group 10 and 24 years.
Various virtual gaming events and tournaments can be organized on the cloud instances to promote the brand and provide the users with a free hands-on experience of the service. Also, gaming tournaments can be sponsored by providing tournament organizers with our cloud infrastructure.
There are some areas which need special attention while building this business.
Digital rights management (DRM) of games is an important aspect of this startup. It is essential to ensure that the games licensed from a developer are not pirated or being distributed without the publisher’s consent. Failure to do so might result in the loss of digital publishing rights and legal complications.
The internet service providers allocate only limited resources to any organization and this data capping may lead to some hurdles in the far future when terabytes of data are transferred between the server and the client. This may also lead to additional operating costs.
User data security is one of the significant factors for maintaining brand reputation. Any minor user data leak from the startup may lead to extreme consequences like user dissatisfaction, lower conversions and other legal issues. The data, irrespective of its classification, should always be kept secure.