Can a Gaming Cafe be Successful? 345
droidlev asks: "For years I've been toying around with the idea of opening up a medium sized gaming cafe in the Chicago suburbs. I have already taken care of the issue on how to make money during the day, when our younger market is in school, However, the question of whether or not a place like this can be successful, still remains. I've seen plenty of undermanned and poorly planned places in the area (and on the East Coast) like this go under in six months. What is your opinion? What ideas and thoughts do you have that could help a place, like the one I'm proposing, succeed? Do you have gaming cafes in your area that are successful? What unique techniques have they implemented?"
Research? (Score:4, Insightful)
Value added. (Score:5, Insightful)
Why should I use your facility rather than a crappy one. Are you going to have hot chicks offering massage? How about a place to smoke while you play? Good DJs beat matching to the action? Red velvet? What?
Take it from me nothing is worse than just another fucking cubicle.
No, here's why (Score:5, Insightful)
depends on how you do it (Score:4, Insightful)
I did find a few things I would do differently, for one I would like to see a bank of printers, scanners, etc so that during certain hours (maybe school hours and few after that, the machines could actually be used for study, business etc. I also thought of adding a gamestop type game exchange with maybe a points program for time rented and maybe tournaments and contests (monthly high score, etc). Another idea would be to have certain nights that are 18+ and special events on a monthly basis. For rental time I wanted to use a keycard system like gemstar to keep track of time and charges. I had also thought about working out an advertising/sales deal with a local vendor to help with equipment costs.
I wrote an entire business plan but then got a job offer I couldnt pass up and just kind of threw it aside for now. I belive "cyber cafe's" are viable here but they need more of a hook than just "PC's for rent".
It may work, it may not. (Score:3, Insightful)
We had one place that was successful in my area quite a few years back because they could provide a large amount of internet bandwidth for a relatively low cost compared to consumer prices. However, when DSL and eventually cable modem caught on, that market was done.
If this is strictly a gaming cafe, in the age of oodles of bandwidth everywhere, if you cannot support numerous tournaments with worthwhile prizes (that people will potentially play all day or two straight days to get), it won't work.
As other posters suggested, if you combine food/coffee with the gaming, you may be onto something. But a gaming-only cafe, I think that idea was done 6-8 years ago and then it was done. When corporate-level bandwidth started to be available in homes at commodity prices, that was the end of that. You can now play in numerous online tourneys and still get very good prizes and whatnot...and from my perspective that's what a good portion of the people will go to a cafe and play for. When I played, I played for cash or prizes worth over $300 USD. That was the only way I could justify paying to get into a place and then wasting a day or two with the possibility I might get eliminated before I got the chance to earn a top 3 spot (which were the only payouts in a cafe tourney).
Aside from what I just said, if you live in a major metro area, it might work. I would imagine Chicago would be a decent place to try this because of all the bandwidth there and managed hosting of all kinds. I know Hurricane Electric will rent out completely furnished computer labs and such expressly designed for gaming. You pay a deposit to the provider, charge the people to come in and play, etc etc. If you plan it right, you can make money.
Re:Chicago... (Score:3, Insightful)
It's also right across Lawler Ave from Niles North High School.
Regarding the demographics in that area, there's a lot of money to the north, and it's standard suburbia south into Chicago proper. The kids from Niles North have more money than brains (I went there- I can say it!). And Old Orchard is a hangout for most young people from the Chicago border north past Wilmette.
The location at Old Orchard is exceptional, and one of the few locations I'd see working for this kind of thing in Chicago.
Sadly though, the person doing this is going to probably fail. There's very little chance a "cyber-gaming cafe" is going to make it. A better shot would be a high quality coffee/cafe type thing, with some computers and gaming thrown in. Make sure it's got the three keys to retail success: "location, location, location!".
I've seen maybe 30 venture of this type around the country. One is still in operation. It's a business that reproduces a non social activity in a social setting. People can game at home... eventually they stop hanging out at the parlor and go home- but the business still has a lease.
You think? (Score:4, Insightful)
You're probably going to need to cater to teens. Teens are less likely to have their own computers, or their usage is restricted by their parents. They're also a lot more social-- they want to get out of the house and they have time to kill. Conversely adults are more likely to be able to afford their own gaming rigs, and (more importantly) they tend to want to be left alone-- they'd rather play in the comfort of home than hanging around a gaming cafe-- especially if it's filled with packs of teenagers (kind of a catch 22...)
The downside, of course, is that you'll be spending a lot of time playing babysitter. You'll be constantly monitoring for theft and vandalism, telling them not to smoke in front, maybe even breaking up a fight or two. You're going to get a lot of attitude. Did I mention the theft and vandalism? Things are going to go missing and you're going to have no idea how they pulled it off. Things are going to be broken for no reason at all. Ever seen an arcade machine in pristine condition? For that matter, ever seen an arcade bathroom? That's what yours will look like every night too...
Re:Yes we have one. (Score:5, Insightful)
Re:Bargain shopping (Score:3, Insightful)
Also, I've only ever been to a gaming cafe once, but I recall that they had some sort of tab system. They had software that tracked users login times so that accurate bills would be. An unlimited monthly plan would probably kill you, but do offer some sort of membership discount. A couple free hours at sign-up and discounted hourly rates help. And as far as the tab concept goes, have some sort of system that instills trust into the customers by allowing them to play for a few hours without having to pay until the next time they come in. Say that after you pay for 10 hours, you're allowed up to 5 hours of unpaid time. After they play for 5 hours without paying, then you kick them off.
Basically, you want to have rigid rules to combat cheating/stealing, but in those rules, allow some flexibility so that your customers trust you and don't feel like you only care about them for their money.
Re:They Can Work (Score:3, Insightful)
Re:Read about this guy's experience (Score:2, Insightful)
Maybe...? (Score:1, Insightful)
A couple thoughts from me.
Re:Yes we have one. (Score:5, Insightful)
Re:What kind of games? (Score:2, Insightful)
Or at least have a pinboard somewhere for people to put up notes about stuff they want to sell. You won't make money from the deals directly, but if you become a known trading hub, people will get used to dropping by for new deals. Add another pinboard for people looking for groups to play with, and a third for convention dates and the like. Information brings in people, and too many make the simple mistake of cramming it all on one pinboard.
They can't get it at home (Score:5, Insightful)
1) Your job is NOT running your cafe. Your job is improving it. Owning a small business is a red queen affair: you have to be constantly improving just to stay even with the competition. Do every job in your cafe just long enough to know how to do it well. ( This will be anything from doing taxes to fixing hubs to cleaning the toilet. ) Then DELEGATE.
2) Your territory does not end at the door. OK, legally maybe it does, but you must treat the area immediately around your business as your territory. Clean up trash, cover grafitti ( immediately ), get rid of panhandlers. If something goes wrong immediately outside your business, it is not your fault, but it is your responsibility.
Get to know your neighbors. They can be helpful, or they can hurt you. ( This is especially important in your case, for many of them may initially view your clientele as troublemakers )
Join your local business association. Get to know your local cops.
3) You may have drug dealers and hookers of both sexes trying to use your place as a base of operations. Get rid of them. Not only do they give the cops a reason to cause you problems, but they will be competing for your customers' money.
4) Decide exactly what your business is. Yes, it sounds silly, but many owners don't really know what line of work they are in. In your case, you are not just in the business of offering games. As several posters have noted, most people can get that at home. You have to offer them an experience that they can't get at home.
A) Coffee and food will help. It does not have to be great food + coffee, but decent and reliably so. ( which many people don't have at home because they are too busy playing games. )
B) Have at least one hot babe working for you. ( Most gamers don't have one of those at home ) It helps if she is not an idiot, too.
C) Create a social scene ( most gamers don't have that at home, either ) This means catering to women. Keep them happy, and they will hang around, and then the guys will hang around too. Find out what kind of games women prefer. Have plenty of them. Keep the bathrooms clean.
D) Have a clear statement of expected behavior ( no smoking, no fighting, no booze, etc - whatever rules you think will do best ) Be very, very clear about what standards you expect of your customers, and then stick to them. Be prepared to explain why those particular rules are important to you. A large number of gamers play games because they find the rest of the world to be confusing, irrational, and hypocritical. Very few of them have a social environment that makes sense at home. E) Keep asking yourself 'What can I do for my customers that they can't get at home?"
Good comment, and a few additions. (Score:4, Insightful)
It's like a rebirth of the video arcade, but it's more captivating.
Some things that a game spot should avoid:
- Ruthless monitoring of the players. If you have the game police watching everyone and barking every time someone does something you don't like, it will keep people away REAL fast. Make sure you have a supply of keyboards and mice. They're cheap. Don't worry about them so much.
- Tailoring to the very young kids. While families might visit a gaming center once in awhile, you don't want to alienate your core customer group by forcing them to be proper little gentlemen because sometimes a young kid might play. Some ediquite is a good idea, but be too strict and you'll drive them right away.
- Limiting internet usage. Don't limit internet usage. Sure, you could block porn sites, but don't block everything else.
A game cafe should have a method of quickly regenerating a PC to "defaults" and should have a couple machines on stand-by. If you don't have to worry about users screwing up Windows, you don't have to be the PC Nanny.
You should also provide stations for people that want to bring in their own PC's. You could charge the same amount of money, but let people use their own equipment. If I am going to go to someplace like this for a bunch of hours with some friends, I want to bring my own PC, my own LCD screen, and my own keyboard+mouse.
I've been to places that break all these suggestions and I'll never go back. It would have been great if they weren't so strict. I mean, gamers want to hang out, play some games, yell at each other, and have fun. Let them do that and you could be successful.
Re:Value added. (Score:5, Insightful)
Re:Bargain shopping (Score:3, Insightful)
If you knew a bar that had tasty food and snacks for a reasonable price, would you go there more often than other bars? I sure would! If there was a cinema in town that had dollar cokes, that would be the ONLY cinema I ever went to. And I'd buy a coke every single time. Everybody would buy a coke every single time.
I'm no economist, I know there's a special point between the two competing factors of how much people will buy vs. how much you take in per purchase. You gotta maximize it. I have a sick feeling that maybe bars, restaurants,etc. have maximized their profits, but it's downright sick, and I wonder if the curve is shallower and you wouldn't lose much money even if you avoid inflation.
Just don't do everything at once (Score:3, Insightful)
Your principle problem will come from having to pay bills and not having money for it. You get money by (a) your original investment: be careful of what is known as "the cost of capital" - anything you borrow will have to go back (b) paying customers: whatever your target audience is, be ready to shift this as fashions change - this can be almost seasonal.. (c) whatever franchise you manage to get going local businesses may be interested in banner advertising on your default logon screens.
You spend money by running the business (read: pay your bills, staff, live AND set aside enough for maintenance and equipment/business refresh - the cycle of that depends on what you want to do and how destructive our clients are
The equation is simple: if you get your income (including future planning) to rise above your spend and you have about 3 months running costs in the bank you have a winner. As a matter of fact, if you have a winner of that scale you should pump some of your profits in doing it again elsewhere and create a chain but NEVER try to continue a business after it shows not to work where you you put it. You'll know that in 3 months or so (so you know what your potential loss is before you do this).
Ultimately, if you've got 3 shops doing this with profit you have in principle something that you can sell on for quite a bit more, but let's tackle that when you get there
Oh, and try to avoid personal risk, companies can be set up with 'limited liability' but some companies want your shirt/house as guarantee - be careful because it can be used on a succesful business to take it over. The bankis by NO means your friend. They may help you, but they're a business too. The more you can avoid external money the better it is, and if you do get a loan, make sure it's one you can clear ASAP without penalties. Try and stay debtfree where possible, that's the stuff that will keep you awake at night.
Good luck - starting a business is a nervous enterprise but it's also very rewarding when it all starts to tick.
= CH =
Recipe for Disaster (Score:3, Insightful)
Re:Bargain shopping (Score:2, Insightful)