EXECUTIVE SUMMARY

MISSION STATEMENT
To increase revenue and minimize costs, Pandemonium should utilize the financial analysis and
non-financial data for decision making.

COMPANY INFORMATION
We will be focusing on increasing revenue through in-app purchases with the help of non-financial data
and decreasing costs through re-financing and issuing debt at a lower rate than 10%.

FINANCIAL STATEMENT ANALYSIS

Statement of Cash Flows:
An analysis of the cash flows indicates that a loan was taken to acquire Go Play in 2013, since we see a
large amount of cash transaction in the investing and financing section of the statement. This will cause
the balance sheet to have a high long term debt and a high interest expense on the income statement.

Balance Sheet:
The current ratio and working capital are analyzed from the balance sheet and tells us that Pandemonium
has good liquidity and short term assets are greater than short term debts. This is an indicator of only the
short term financial health of the company; we will also address creating a sustainable long term plan.

Statement of Operations:
From the statement, we concluded that net loss is increasing over the years because the cost of revenue is
increasing faster than revenue. Total revenues increased by only 15% from 2013 to 2014 while costs
increased by 30% from 2013 to 2014. We have identified several methods to increase revenues and
decrease costs discussed below.

Increasing Revenue:
From the financial statements, we recognized an average 50% decrease in revenue from Ultimate Juggle
to Ultimate Juggle Warrior. Similar companies to Pandemonium, like Zynga have adopted a revenue
generating structure often referred to as freemium, pay to win. This method lets the users play for free
but offers in-app purchases for extra features. After implementing this structure in 2008, Zynga increased
its revenue by $27 million in the 1st year. We also recommend that Pandemonium advertise its new
releases in the older versions of the game. Advertising within your own game will have a significantly
low cost compared to advertising in other apps, all while keeping and expanding the original fan base.
Another way to increase revenue is to launch the games in the android market which dominates over 70%
of the smartphone users globally. Reaching out to the android market would significantly expand
Pandemoniums products to a larger market and a greater audience.

Decreasing Expenses:
After acquiring Go Play, cost of revenue increased from 26% to 56% and R&D increased from 36% to
60% while revenue has been increasing at a much slower rate. This illustrates that Pandemonium is
utilizing its resources inefficiently. We suggest reorganizing Pandemonium's operational structure by
re-evaluating and re-assigning employees to maximize productivity and decrease costs.
To decrease the principal debt from acquiring Go Play, we recommend Pandemonium to issue new debt
with an interest rate lower than 10% and pay off the Go Play loan. For data storage, Pandemonium can
consider Bittorrent Sync, a better alternative to the current data storage that shares large files designed for
video gaming companies.

NON-FINANCIAL DATA
To examine non-financial data, we advise Pandemonium to focus on random satisfaction surveys that
customers can take after finishing levels as well as demographic models. More specifically, one
demographic trend shows that 48% of gamers are women, while only 22% of game developers are
women. We recommend Pandemonium to hire more experienced females to emphasize the HeForShe
campaign the company supports. Also, beta testing will be a low cost process of collecting data to
improve gaming experience, overall quality, and customer satisfaction. Beta testing usually ensures a
higher rate of success that leads to an increase in revenue.

Data Storage:
Another way to decrease cost is to convert Pandemoniums current data storage software to BitTorrent
Sync which is specific to the gaming industry. This software offers unlimited space, faster storage speed,
and increased privacy and security. The only costs for using this software are an annual fee of $40 and a
one time setup cost of $1,000 for the Network Attached Storage Device.

EXPANSION
After examining mega trends and demographics, Tuong seems to be the better option over Khayali.
Among many advantages, Tuong has a diverse and highly educated population which will allow
Pandemonium to hire the best in the field and allow a smooth, cultural transition into the country.
Economic mega trends predict that by 2030, the emerging nations will outperform the developed
countries. This will have a positive influence on Tuong since many E7 countries are in the Asia Pacific
region.

Before launching overseas, we recommend the following to ensure a greater chance of success in Tuong.
The games have to be translated correctly, not just word by word. The games have to adapt to the
countrys culture and focus on localization. Lastly, research on the distribution channels of Tuong and
on-device testing are a must. The focus on these aspects will help Pandemonium succeed internationally
where many other companies have failed.

PREDICTIVE MODELING
Potential expansions and partnerships can be forecasted through predictive modeling. For instance,
market trends can determine the most attractive games to customers, and standardized taxonomy will
gather only relevant data from all of the Juggle gaming apps. By picking out customer behavioral trends
in the apps and the market, Pandemonium can design future apps to appeal to customers and to increase
revenues. Overall, studying these models and trends will help the company produce successful games and
keep the loyal customer base in the long run.
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