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5 Replies Last post: Oct 16, 2007 4:20 PM by Endeavor

Feedback on new business idea - video game centers

Sep 25, 2007 4:44 PM

JavaJoe 19 posts since
Jul 28, 2007

My friend who lives in northern California mentioned that they are starting to see "video game centers" popping up - where people pay an hourly rate to play games live against each other. Given the popularity of Wii, Xbox, etc. the gaming market does seem to be very lucrative, however it seems highly specialized. I'm not a gamer myself, but was wondering if anyone in the small business community can weigh in on the potential of this new business idea. How competitive or saturated is this business type?

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Endeavor 5 posts since
Sep 27, 2007

1. Re: Feedback on new business idea - video game centers Sep 27, 2007 3:40 PM

Hi JavaJoe,

About 4-5 years ago in Southern California gaming cafes were extremely popular. Kids would pay $1.50 - $3 per hour to rent time on a gaming computer to play action games such as Counterstrike. Counterstrike really fueled these centers. Unfortunately, the competitiveness and typical taunting and trash talking that occurs in these games lead to a few assaults, attempted murders, and murders. Overtime these businesses started to lose traction as the cost of gaming PCs and broadband came down, people would build their own and use their own personalized settings and systems to play against friends online. The in-game systems for connecting players and servers have been improved and there is a very social web 2.0 aspect and series of easy to use tools that allow gamers to connect to friends and play together online with integrated voice communication like they could in-person. All the gaming cafes I've seen have died off. I almost became co-owner in one and helped setup one of them inside a very popular university hang-out and it did great while the industry was booming, then like all fads, it started to lose a lot of business and eventually closed shop.

Gaming is a very strong industry that has no signs of slowing at this point, but in-person gaming cafes haven't done as well. You'd be better off organizing in-person gaming competitions with sponsors, awards and entry fees. Events like these are very popular. As for console gaming, it may work, I'm not sure. Take a look at GameCrazy, GameSpot and the other gaming specialist stores and talk to their staff and customers, see what they would think of it.

Best of Luck,

Ben

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JavaJoe 19 posts since
Jul 28, 2007

2. Re: Feedback on new business idea - video game centers Sep 27, 2007 5:43 PM

in response to: Endeavor

Thanks for your detailed response. I will definitely take your comments into consideration, esp. the liability issues to be aware of.

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digifut.com 14 posts since
Oct 12, 2007

3. Re: Feedback on new business idea - video game centers Oct 16, 2007 12:43 PM

in response to: JavaJoe

JavaJoe:

Maybe you can promote competitions for non violent games, or establish strict rules of gaming, so noone will start the trash talk,insults and all that bad behaviors.

Sports videogames tournaments have huge acceptance too.

The idea is great but if you want to avoid the violence issues mentioned above try offering non violent games.

Good luck with this new enterprise,

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Lighthouse24 2,396 posts since
Oct 10, 2007

4. Re: Feedback on new business idea - video game centers Oct 16, 2007 1:54 PM

I agree with everything that Endeavor wrote, plus in conservative regions, these types of businesses seem to be a favorite site for media stories that are less than helpful -- for instance, where does the six o'clock news go when they decide to do their bi-weekly feature on teen smoking, drinking, drug use, violence, or whatever? To a place with lots of teens (your friend's place, if the business is successful). It's hard to draw the kinds of players and behaviors you'd want when potential customers keep seeing your storefront as a part of a negative message.

Here's a related idea to consider, however. You know those inflatable "space walk" amusements that people rent for kids parties? How about starting up a similar business by building the type of gaming center you've describe inside a "toy hauler" trailer -- and then take the gaming center to the kids? It doesn't seem like the investment would be much more, operating costs would be much less, and many of the problems would be avoided. Just one of those ideas that fell out of the sky that I'll never use -- but maybe your friend can! Best wishes . . .

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Endeavor 5 posts since
Sep 27, 2007

5. Re: Feedback on new business idea - video game centers Oct 16, 2007 4:20 PM

in response to: Lighthouse24

That's very true. I forgot about all the drug use, drinking and smoking that goes on at these centers.

This toy hauler trailer you speak of sounds an awful lot like a LAN Party. A LAN party is an event that either takes place in a friend's home or in an event center hosted by a corporate sponsor. In this, people bring their own computers and play against each other live in person for a chance at winning a prize. This is very much like the gaming competitions / tournaments I spoke of. About a year back my gaming team made it to the finals of Verizon FiOS Grand Tournament in LA, and one of our members went so far as winning the grand prize of $100,000. http://pc.gamezone.com/news/08_08_06_08_14AM.htm

This event was organized by the CyberatheleteAmateur League http://www.caleague.com/ and sponsored by Verizon. Recently there was another tournament that took place in a number of cities sponsored by NewEgg.com called LANFest2k7 http://promotions.newegg.com/LANFEST2007/index.html

In addition to that, Half-Life, makers of CounterStrike just unveiled a new series of games, one of which that has been out less than a week and already has a cash tournament for $1,000. http://www.cevo.com/?page=event&id=61

There's a lot of opportunity in managing gaming leagues and tournaments with a strong set of rules and regulations and corporate sponsors.

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Feedback on new business idea - video game centers

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