So I’m watching Extended Play on TechTV the other day. This particular episode took place in a gaming cafe. Basically its like a lan party where people pay to play each other on PC’s. BTW the game of choice is Counter Strike.
Anyways the entrepreneur in me says “That would be a cool business to have.” Games and computers, two of my favorite things. So I’m basically wondering what would all be involved in starting up something like that and how much would it cost. I can imagine with all the computers and hardware it would be up there. Plus you would have to find someone with knowledge to hook it all up. I dont have near the resources right now to do something like that, this is more or less a fanciful thought.
Well before you start, evaluate your market. If nobody but yourself plays computer games then your business might just end up in the gutter.
Once you’ve decided the venture might be a good investment, you’ll want to find a place, I mean people don’t just want to play in your basement, they want atmosphere!
Of course, the hard part. Capital. You’ll need to get enough money to pay for the first few months when income is still just barely breaks even or doesn’t. Many places either get someone to sponsor them (i.e Pepsi, tell them that you’ll only serve pepsi products provided they can pay for a freezer/signs). Also buy stuff used and get the first hand stuff only if you can afford it. Try ebay or look for competative pricing around town.
Now the fun part, hooking it all up. Look for someone who might know how that might be a friend and offer them say 5 hours of gameplay free or something along those lines. If it comes to it you can hire someone from a company to do it for you.
Next you’ll need to promote it somehow, try asking a local radio station to give out a couple passes for some free gametime and people will learn about Obvious Guy’s Gaming Lounge and the teeming millions will flock.
(sorry pressed submit a little too soon)
Thats just the jist of it, I’ve left out a few key points like how to set your pricing and other important elements in business. Nowdays you’ll need about 5 Million permits and people (or the knowledge) to do your company books and all the yucky heebeejeebies
The one’s in this area have all crashed and burned. My son has a better system at home and a faster cable connnection than the cafes that have sprouted up. There is a market but collecting plugged in teenage gamers willing to pay $ 5.00 - 10.00 per hour to do something they could just as easily (and probably better) at home is a bit of a hard sell.
d12 dropped some good basic advice, I’m going to try and run with it a bit. I have quite a bit of experience in arcade operations.
#1 The niche market comment was accurate but can be toyed with. Are you planning on making a LAN center that happens to have a vending machine or two or are you going for a “cafe/coffeehouse” environment that happens to have computers? Nice blends of the two can be achieved but you are either looking at expensive initial setup costs or leaning heavily on one or the other.
Virtual World in Walnut Creek had one of my favorite examples. When you walked in, it looked more like a plush sports bar incuding wine/beer sales and a basic short order menu and a small kitchen. The simulators were totally out of view so it provided a beautiful relaxed environment with a few monitors scattered around near the ceiling showing the current games in progress. Of course they went out of business also but I don’t know the total reasons for their demise. My guess, trying to do too much. They were set up to run 24 players at a time and I think it was unusual for them to have more than 2-4 going at any given time. My guess, its a franchise thing and it wasn’t generating enough return to impress anyone, so it folded.
IF you are doing this “for the love of the gamer” you can go pretty far. I would love to do something like this myself but you’re looking at about $20-30K in setup costs, plus being able to cover a lease for a year or so just so people can find that you exist. Radio station promos will help, offering discounts to high school student body cards could really bump your draw up. Running tournaments will also help keep everyone interested especially with some decent prizes.
Warning about giving away free services as tournament prizes. Don’t kill the goose that lays the golden egg. Tournament winners will often be regular customers with alot of experience at multiplayer games. Having 100 hours of free play coupons as a prize could create a zero revenue customer for a couple months. Aiming for membership programs and sending out short term buy one get one free programs may help boost traffic.
Running other services might help too. Having a few machines set up with MS Office and letting people do term papers or access the internet and such for a nominal fee could help draw revenues that way.
Next issue:
Cleaning and maintenance. Its real easy for network game places to look like a total dump in a big hurry. One we have here in my area I have a hard time imagining going into just because it looks so dirty, cheap, and slapped together (and I love online multiplayer stuff). Keeping a public access place clean is a war in itself especially since the majority of your customers will probably be teenagers. Roughly 40% of our arcade labor is nothing but sweeping, wiping off monitors, picking up trash, etc. The furniture and equipment you use will be subject to heavy use and will need replacing often. Cleaning a mouse will be a common sight, optical mice might help there. Keyboards will become dingy or have letters rubbed off in a matter of a couple months. Things like joysticks if you have/allow them will be cosntantly demolished by heavy use. In fact for control peripherals like joysticks it might be feasible to build your own units using quality arcade machine components that will last for years even under heavy use…
The places I have seen were usually $1.50-$2.50 per hour. You could also buy in bulk like 5 hours for $5 instead of the normal $1.50/hr.
The neat thing is being able to run games with 4-8 of your friends some of whom might not even have computers at home. One of my friends has a house shared by 6 single guys that has a room with 6 puters in it and they regularly have very successful Everquest group sessions. Having teams that can yell back and forth to each other is a big bonus in online competitions.
For a business model…look at something like a pool hall maybe… since idle puters dont cost much, like pool tables. For a quick guideline, if there is someone waiting for a machine over 20% of the time you need another play station.