Help: I'm thinking about opening up an internet cafe/gaming

[TranceNation]

Ok, I'm still in the planning stage but myself and a couple of friends are seriously thinking about opening up an internet cafe / gaming place in my area. Just wanted to see if anybody's done this before and get feedback on if it's a good idea or not?
So far here's what we've planned:
20-25 machines lan together with high speed access. machines will probably be 1.6 intel p4 with 512 ram and nvidia geforce (or similar).
os is probably win2000, will have printing services, email, word processing, etc. Users will be charged $3 hour. We'll have some concessions like soda, snacks, etc. Plan to open 24hours.

Our concerns:
1.Demand: we need to figure out if there is any demand for this, target audience: gamers, tourist who want inet access, people who don't have net access (email,chatting,etc).

2. Location: Where can we get a place that is easily accessible to yet not that expensive? that's a tough one

3. Laws/licenses: we haven't done any research on this so we'll need more to do more work.

4. Backup plans: what if it doesn't work out? what can we do with the business.

anyways, feedback is welcomed.

 

[FoBoT]

why would you put w2k on them?

 

[StageLeft]

Do these places ever actually make money?

 

[notfred]

Are you planning on opening a cafe, or a gaming place? Snacks and soda is not a cafe. You should sell food, coffee, etc. If you want to be a cafe. Go to a cafe, you'll see what I mean.

If you're buying 25 machines, get them from Dell or someone and try to get a volume discount. It will be cheaper.

You will be buying 25 licences for every new game that comes out. That's going to be (at $30/game) $750 per game. That means each game has to pe played for at LEAST 10 hours on EVERY computer before you start making money (at $3/hour). Also, if the machines are $1000 each, that's 333 hours of play time to pay for the machine, before you start to pay for the games. That's 2 weeks of constant play time.

How are you going to manage time? Are people going to sign up accounts, and the machines will keep track of when they log in and log out?

You're going to need an internet connection that can handle 25 simultaneous games. That won't be cheap.

Good locations are not cheap. Rent in shopping malls and things is expensive.

I suggest NOT having CD-ROM drives, zip drives, etc in the machines (or access to USB ports). This will discourage people from using your high speed connection to downlaod warez.

 

[Viper GTS]

Couple things...

- Demand is likely low given the explosion of broadband and the downturn in PC hardware prices
- Laws/licenses - You have to have special licenses to run games in these types of environments. You can't just buy 25 copies of UT.

You're looking at a minimum $15K initial investment for hardware alone, probably more if you want good hardware. Your hardware will depreciate drastically starting from day one, so if you do bail you'll likely lose 50% or more of your hardware value.

Just a few thoughts.

Viper GTS

 

[RossMAN]

Originally posted by: Skoorb
Do these places ever actually make money?

Barely. Internet cafe's used to be all the rage here in Portland. There are a few which have sprouted up recently and are still in business (how? I dunno) they usually cater to gamers.

Initially I would tout the $3/hour access as a GRAND OPENING special then later jack it up to $5-$6/hr which I think is the industry standard. Make sure to cater to gamers. All your monitors should be CRT either nice flat 17" or 19" monitors, the specs you listed seem nice, really nice. Definitely have all the major games available to play against each other and online. Also offer services like CD duplication, some special machines should be equipped with a webcam, some tied to color inkjet printers and black and white laser printers. Accept all forms of payment (cash, credit card and check). Maybe sell cards which give internet access, like $50 gets you a 12 hour internet access card ($10 savings off buying regular per hour price of $5 x 12).

Advertise and get word of mouth out about your new internet cafe. Pay a marketing company (or do it yourself) to send out a nice simple flier (maybe include a freebie, like a free small coffee) to the neighborhood.

I would concentrate more on the internet aspect than the cafe (coffee/pastry).

If you have any specific questions please don't hesitate to ask. I used to visit the local internet cafe's a lot to use IRC, telnet, MUD, etc. but haven't been to one in years. I've been to internet cafe's here in Portland, Oregon, Las Vegas (which has 1 on the strip, maybe more but I couldn't find them) and the mecca of internet cafe's which is Sydney, Australia.

Sydney had internet cafe's practically on every block in the downtown area. Some of these were really shoddy and some were really nice. Some had these plasticy flat keyboards which were weird, some had really shoddy keyboards, this one had really nice ViewSonic 17" LCDs, P3's and faster.

Oh and also make sure you cater to chatters, so install IRC, MSN, AIM, ICQ onto your computers.

Don't expect to make a lot of money, most internet cafe's fail.

 

[HomeBrewerDude]

you better get a business plan together... sounds toooooo sketchy so far.



depreciation isn't necessarily a bad thing... as long as you have cash flow, and enough cash reserves to keep it afloat for a while (a year).

 

[diskop]

It's gonna be hard, so you'd better have a huge, well planned out venture before you start into any of this. Location, probably by a high school or something so kids can come by during lunch or after school and play away.

 

[TechieZer0]

I used to go to one of these places near the local University. It was really the suck. The games featured were ok but back then Duke Nukem/Quake was supreme. You are going to have to have REGISTERED versions of all the games/software you feature and I think that is where $$$ get's consumed.

The food was also no reason to go to this place as it was an afterthought.

Personally I think the food should be some sort of Pizza/soup/salad/bread/soft drink/coffee/tea/water buffet all you can eat and the PC time for the first hour is FREE. Then stick them with fees after the first hour + the buffet costs.

Charge extra for printing/copying costs.

You would think these places would be good word of mouth trial advertising for PC Hardware, Software and Broadband. For Advertising, someone should sponser you in some way.

Another thing you can do is resell some of that phat pipe you are going to get to save even more money like your own personal Telco.

Another good angle to throw in could be PC hardware and software classes/training at certain times outside of the lunch/dinner crowds. You might even get State unemployment subsidies.

Somehow the LAN Party crowd might be sucked in to your establishment if you have enough room to share your network and fat pipe. $15-20/head for a day of LAN Party gaming is easy money if managed right.

edited---to add more ideas...

 

[kranky]

Checklist for starting a cybercafe.
Link to s/w to run one.
Buy a startup guide for such a place.

I'm skeptical that such a place can be successful. I'd concentrate on minimizing your startup costs.

Running a place 24 hours costs a lot of money. Who is your target audience, and how many of them are going to want to come in at 4AM?

The thought that occurs to me is: who will find this attractive for $3/hour?

 

[cnwk64]

Location, Location, and Location
If you can find a location that is good for Internet cafe, chance are the rent is going to cost you an arm and a leg.
And if it is good for Internet cafe and rent is cheap, I can think of more then 5 different business that is going to make you more money then Internet Cafe. (may be more extra work)
Only place I can think of to open Internet Cafe that make good sense, is in developing countries, like China, Thai, Mexico, etc. where high speed internet is either cost too much or simplly not avaiable.
I don't see a future in open it in either Eroupe, or US. DSL and Cable access is very where, most college towns are all wired for high speed connection.
Why is your customers should come to your place, instead of use his/her own Internet access.
If you are going for LAN party, H/W is going to cost you a big time, again, why customers want to paly at your palce? what is your advantage compare to those high speed Internet connection such as DSL, Cable?

Place I can think of would be for business users, like airport, subway, downtown, etc...
and the rent for those place is sky high.....

 

[ElFenix]

the schlotzky's around here have internet access in each one... and thats a fast food deli...

 

[RossMAN]

Originally posted by: ElFenix
the schlotzky's around here have internet access in each one... and thats a fast food deli...

How much is their internet access?

 

[PhaZe]

Theres a new place near me that is half gaming and half cafe. It's ran by an Asain family and one of my friend knew one of them from a CS ladder. (most of them play cs only). Anyway, they bought 30 dell machines, and 30 17inch LCDs. I think they messed up on the monitor selection because ghosting is a major issue now. They barely have 2 weeks open and the place is always packed in the afternoon until closing. They only have 2 roadrunner connections for the 30 pc's. I think their main income comes from the cafe, they have all types of drinks and food. I like the caramel lattes, they are 3.25$. They charge 3/hr for the gaming. I asked them about the desks (They are real nice, compact and sleek looking) and they said they bought them at Sams club for 69$ a piece. I don't know how much the monthly rent is but they bought a copy of each game for every computer. Their website is www.toesonlinegaming.com and they use http://www.tinasoft.com/ to manange the time. You pay up from and the guy tells you a computer number and it cuts you off after your time runs out. Pretty nice place, clean and location is right by a 30room AMC theatre...

 

[Jzero]

Here's one pitfall:
The PCs have to be better than average. When I first started gaming in college (1998-1999), Quake II and Unreal were fairly new stuff. My school had just gotten all new PCs in the labs which blew the heck out of my crappy K6-2 333. Within a year, though, most of us had better hardware, and there was no point going to the lab to play. We'd much rather just sit in our rooms and play unsocially then go somewhere else where the computers are lower quality, just to play in a group.

That being said, I'd never bother paying to play someplace unless they could somehow provide a better experience than I can provide for myself, and currently, I can't see any place stocked with even fairly high-end OEM boxes doing so.

Some things that would attract me--
Board games. I dunno how many PC gamers are also board gamers, but if I happened to be at a venue playing MageKnight Dungeons, Settlers of Catan, or Cosmic Encounter, I may be convinced to spend $10 to school people for a couple hours in Q3A or WC3 just because I was there. If you can get me in the door, you may be able to get something out of me. As a board gamer, I'd be willing to pay a sensible rate for a good amount of table space, and some good coffee and snacks, and once I'm there, I might buy computer time.

Team games. One of my fondest memories of on-line gaming involved playing Commandos: Behind Enemy Lines in the computer labs. We all sat in the same lab and we were able to coordinate and work as a team. It was not nearly as fun to do this over BComm or the phone or in-game chat. We would also do this for StarCraft and team FPS games--one team each in separate labs. Worms was also far more fun when everyone was in the same room. I'd be more likely to pay to play a team game in a team atmosphere that I can't create in my own studio apartment.

 

[TechieZer0]

What also must be a big expense for these kind of places has to be the Electric Bill. Just the Air Conditioning cost must be through the roof with all of those PC heat machines and everyone else including a kitchen...

I bet the Electric bills must be over $700/month just for a modest place.

 

[benliong]

Originally posted by: cnwk64
Only place I can think of to open Internet Cafe that make good sense, is in developing countries, like China, Thai, Mexico, etc. where high speed internet is either cost too much or simplly not avaiable.

Give it a year or so, Boardband in southern China would be comparable to that in US.

Place I can think of would be for business users, like airport, subway, downtown, etc...
and the rent for those place is sky high.....

I totally agree. I travel quite frequently between US and Asia and a lot of times the trip involves hours of waiting time for transit. I'd had that in a lot of airport and only in detroit can I find a Internet Cafe. I always wonder why.....

Although the rent for these area (airport especially) are sky high, incentive for people to use the service is so much higher than in any random place in the city. You can also charge a little higher on coffees to sort of make up for the cost. People in airport don't usually play games. They are mostly business people who need to read on stocks / news / email so there might be another way to save money on licenses.

I was thinking of doing a internet cafe thing too (not seriously, but kicking the idea around). I live around a University Campus and those kids would obviously have high-speed lan connection at home and if they do not have a good enough computer, the school computer lab is often a good network gaming hangout. This is probably not a good place to put your business.

One idea I have though was that instead of having a bunch of PCs there would be a bunch of consoles (say xbox), and network it together to provide multiplayer experience (say 16 player HALO) that normally wouldn't be possible. This would really work if there were more internet-ready / Link-up games available for PS2 / Xbox / GC.

I am actually planning to try that idea out in a campus fair with something like 4-5 xbox, or if there is any good link-up games, PS2s.

 

[TechieZer0]

I am a boardgamer! I think I am going to start a thread just to see who else is.

 

[TranceNation]

hi all thanks for the input and feedback. i'm at work right now so i'll have to read and think about it all when i'm at home after work. but yeah I agree our plan needs a whole lot of work before we can do anything. We can currently come up with $20k to get started. We are thinking that it's more of a gaming place where you can play the latest games (unreal tourn 2, etc) and have a lounge area where you can play console games like xbox halo hooked up together and hold some tournaments etc.

 

[cnwk64]

I don't think you can make the money (a lot) that way.
Peopel who play those games are most likely 20-30 older male with above averge income (at least most of my friends)
they don't need a place to play game, they may like place to meet people. so once in a while for lan party whould work out, but you can't relay on them for your monthly bill. and they alway like to show off their computer, if they lose in your lan party, your equipment is to blame..... guess what, they don't like lose.

another target customer for you would been teenagers, they like to hang out in your place, but the problem is they normally don't have much cash to spend, so you may have 10-15 teens hang out, but only few is paying customers. and teens (male) tends to abuse your computer more offten then other group.

Financial wise, I think 20K should get you start, but not enough to stay in business.....

 

[TechieZer0]

I just read a Wired article about PC baangs in South Korea. Imagine 16 million people who congregate in Internet cafes every day.

The culture there is so different---so very different. They have 2 cable stations that show PROFESSIONAL games of Starcraft and other homegrown stuff. The biggest thing there right now is a massive mulltiplayer game called Lineage which is played online by 3 million people DAILY. This game is produced by NCsoft who's US division is led by----Richard Garriott.

70 percent of the countrys Internet users are online gamers as opposed to the 20 percent we have in the US.

 

[mcveigh]

I think these are on the decline, but in tampa, one local computer store has opened up a small cafe (i haven't seen it yet) but they are having lan parties there. maybe you caould rent out space for lan parties? say 10-20 bucks apiece, 20-30 stations, just supply a LAN and powerstrip?

 

[Turkey]

I'm thinking you should play the party/LAN Party angle more... you rent maybe 3 or 4 rooms that can hold maybe 15 people each. 2 rooms have maybe 3 high end machines each, like upgraded every 3 months (then sell the now "obsolete" parts on ebay or whatever), and 10 - 12 high speed connections. The other 1 or 2 rooms just have 5 - 10 low end, "just browse the web" PCs with vending machines. People can come in anytime and use the "just browse the web" PCs for $3-4/hour, or use the high end machines for games during the day for $6-8/hour. Then at night is when you make your real money. You host kickass LAN parties, public or private, one in each high-end room. People pay a bundle of money for the use of the rooms, food, and fast network connection. They can bring their own PCs or pay thru the nose for your high end machines. Make people book private parties 2 weeks in advance... have public parties Friday and Sat. night. During the LAN parties, you have food and couches in your "just browse the web" room where the partyers can chill. You'd contract with a catering company to provide most of the food (pizza, burgers, bigsoftpretzels, etc). It'd be best to do this next to an urban geek school (CWRU, MIT) and have one night a week as a campus discount night. Or, you could do it like a nightclub... one of the non-gaming rooms has a disco ball, DJ, the other one is a bar. Drunken gaming!

So you've eliminated the a lot of startup and maintenance costs, and provided a high-end service (you always want to provide a high-end, high-margin service). Plus, you have almost no food costs and not much health inspector issues, plus you provide better food to your customers. I bet it'd be a pretty good draw for fraternity rush events, ACM parties, and just a bunch of geeks who want to go out on Friday/Sat night but don't have the nerve to ask a woman out.

 

[mcveigh]

and you can sell crystal meth to the gamers who need that "edge" :Q

 

[BD2003]

I dont think theres any money in non gaming internet cafes. Maybe at an airport yes, but anywhere else, forget about it. Every single one I've seen has been counterstrike oriented.

CS is the meat and potatoes. But people are going to want to play other games. Once you've got CS, youve got DOD. You can pick up startcraft for extremely cheap, so thats another no brainer. I'd say warcraft 3 is going to be the next big thing.

Basically, you want it to be the place that they would rather play at.

And youre going to need a really good tech. Have him lock the computers down so anyone who uses them cant download, install, or change anything. The last thing you want is cheaters. Keep every PC the same, and for the love of god, check each and every one every day to make sure they still work. Dont bother with speakers, get good headphones for all of them.

Offer rates at $3 an hour for walkins, with cheaper access for longtime members. You want people to come and keep coming. The more people are there, the more peeople will come. Keep it clean and civilized.

As far as food goes, soda/chips/coffee is pretty much all you need. Anything else is a waste of resources.

Above all, if you want people to come, it has to be better than at home. That means AC, good computers, comfy seats, and a bunch of friends to hang around with.

As far as location, I'd say open it in a suburb. It would become a place for high school kids to hang out at. College kids have a place to hang out already, and a network of their own.