Netflix was established in 1997 . On sept.7 2001 americas leading movie chain regal cinemas filed for bancruptcy protection. The movie industry has been in trouble for a long time. If people stop paying 25.00 for a popcorn and coke they are done.  Dont you wonder why there is no Major chain in this business? Starbucks charges 3.00 for a coffee you charge 3.00 for an hour. People will buy a couple coffees a day but your  people will buy the equivalent of 3-4 coffees a day and yet you will struggle. Why? If there is a coffee stand on every street corner in America why not one cyber cafe?    Let me explain. YOUR cliental are kids. They have a limited supply and there parents are spending 4+ dollars on gas.  When the kids get older and can drive half go chasing girls with there $. Bang half your best customers gone every year. Large centers get more traffic but the overhead is 2-3 times more than a small place. Are you in this business or just thinking about it?

You both seem right. I think the biggest variable is having the money to blow. It's a service industry, and well... without money, no one can keep you funded. If everyone had money, it would be spent back and worth in a lot of places... But it's not that way. The cliental have to always have spendable money. If that isn't possible then well the business is doomed. The other possible alternative is to always have new cliental with money, but that depends on the location and if people can come to your store.

As far as 900 sq ft., personally that seems to small to me. You'll need to make more than 500 a month. Even if your cutting rent and have a great location, size needs to be a little bigger. I seen 2 at about 1500-3000 sq ft. and they are still doing ok, not making money, but surviving. I don't think their location is all that great though.

To bring a little bit of my own experience... with the downfall of our economy, our chocolate business did lose 10% of our sales from the previous year, and it seems to continue that way. We make enough to survive and some extra but I can see customers aren't returning as often, and our cliental (The companies with major money) is dropping. Some of our customers have lost their businesses, homes, jobs, etc. It will eventually affect everyone, not just mom and pop businesses, corporations will feel the impact as well.

ZaCkO

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Who is your attitude?

gault:

Netflix was established in 1997 . On sept.7 2001 americas leading movie chain regal cinemas filed for bancruptcy protection. The movie industry has been in trouble for a long time. If people stop paying 25.00 for a popcorn and coke they are done.  Dont you wonder why there is no Major chain in this business? Starbucks charges 3.00 for a coffee you charge 3.00 for an hour. People will buy a couple coffees a day but your  people will buy the equivalent of 3-4 coffees a day and yet you will struggle. Why? If there is a coffee stand on every street corner in America why not one cyber cafe?    Let me explain. YOUR cliental are kids. They have a limited supply and there parents are spending 4+ dollars on gas.  When the kids get older and can drive half go chasing girls with there $. Bang half your best customers gone every year. Large centers get more traffic but the overhead is 2-3 times more than a small place. Are you in this business or just thinking about it?

I tend to look at the local economies of the cities and towns within a 25 mile radius of me first, with the big national picture in the background. AMC Theaters just added 12 or so new units to their existing 12 unit building in Danbury (a city of 80,000). They are state of the art with huge curved screens, killer surround sound systems and the most comfortable "kick back" chairs I have ever seen in a movie theatre. The point of this is that the kids go there for the experience, not necessarily the movie. Oh, and don't forget the popcorn (kidding).

I also think that the video gaming industry can be related to the restaurant business in certain ways. For the most part (90%), its five years and your out (if that). Use the business for that period and either sell it or close it. There will be the few (10%) that survive for a strong 15 to 20 year span with relatively few bumps. The reason for this is popularity (and of course good food). Popularity is highly determined by atmosphere, ambiance and scale of size (not too big, not to small). Again, its the experience that people remember.

Another industry I see as related are the casinos. The psychological genius involved is impressive. Think of that feeling you get upon entering the place. Its overwhelming isn't it? Bells, whistles, cha-ching noises everywhere. Visual stimulus in every nook and cranny. Wide open fun and games. I believe we need to create the same "feeling" on a smaller scale in order to produce and run a successful GC.

This is the scale and atmosphere that the large centers produce to make them successful over the long run. Overlook these basic ideas and your center will not survive. The clientele are kids 12 to 21 (junior high, high school and some college). Once they start to drink (legally), they will go to the restaurants, bars and casinos, for their experiences, not your GC. Nobody sits at home because gas costs more, no matter how expensive it gets.

To answer your last question, I am in the process of securing the financing for what I hope will be a successful GC. I have spent the last 8 months researching industry data and reading this forum which contains very valuable information from what I consider to be the experienced professionals in this business. I am going to model my business after the larger centers that have been open for at least 3 years. As in any business, you look at what is out there and copy the ones that are successful to the letter. This will at least give me a solid base to work off of while I adjust to the particular local client requirements along the way.

As in any business, you look at what is out there and copy the ones that are successful to the letter. This will at least give me a solid base to work off of while I adjust to the particular local client requirements along the way.

Agreed this happens, but it's also funny that some businesses copy one another and even though one is successful now, success breeds failure. Some don't care about the ethics and see money now, not later. Just like _ _ _ _ _ soft copies pretty much everything because they can't make anything themselves. Spend nothing on research and all on production. Look nice and fancy. Won't work forever!

Copy and upgrade, nows that what I look at. If I see a great idea, I will take it and make it better. More successful!

ZaCkO

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Who is your attitude?

onebigflip

 

I would suggest you join iGames as an honorary gaming center so that you will have access to the private forums area that contains a wealth of information to assist you.  Most of the proprietary info is posted there not in the open Gamers forums area that is really for Gamers to post about games and events and such.

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Co-Op Advertising and Marketing Committee
Game Support Committee Member

I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
-Winston Churchill

I actually didn't own the shop in Gault, I was just visiting it to see it's operation.  The owner in my opinion started way too big and didn't seem to do any homework on starting small and thinking big.  He claimed a  cost of 1800.00 per system and 450 per monitor. 2500sqft at about 2.75, purchased chairs at 180.  He had a flat fee of 5.00 an hour but didn't have tournaments or welcome serious gamers.  It was a pretty good location, just down the street from a high school.  I believe the start  up killed him.  I think  there was  30pcs and 10 xbox360s.

 

Thank you for the help,

 Brian
 

onebigflip:

I actually didn't own the shop in Gault, I was just visiting it to see it's operation.  The owner in my opinion started way too big and didn't seem to do any homework on starting small and thinking big.  He claimed a  cost of 1800.00 per system and 450 per monitor. 2500sqft at about 2.75, purchased chairs at 180.  He had a flat fee of 5.00 an hour but didn't have tournaments or welcome serious gamers.  It was a pretty good location, just down the street from a high school.  I believe the start  up killed him.  I think  there was  30pcs and 10 xbox360s.

Thank you for the help,

 Brian

2.75 a sq foot? Or does that mean something else... at a sq foot that's way expensive. Better get some serious traffic if that really is ... $7000 a month. For $1,800 each, it better be nice systems. Can build a beast AMD,ATI for that price.

Suppose he didn't even use math...

30 pcs (x) 1800 = 54000
10 xbox 360s (x) 375 = 3750
40 monitors (x) 450 = 18000
40 chairs (x) 180 = 7200

Total shown: $82,950

Other costs need to be included... but monthly expenses if 7,000 is rent. You need to make about 15,000 a month or more to keep some money.

Suppose his monthly expense is 10,000... and if he was able to get 5,000 stored a month. Again just suppose, this is not real calculations.

12 (x) 5000 = 60000 a year if lucky

That still means a year and a half to pay back. Plus that doesn't count all the hidden costs, build costs, licenses, other monthly expenses he may have... the list goes on and on. I'm sure to pay himself back would be at least 3 years and he would have to have a lot of traffic. Plus he doesn't spend any of the money he makes on new video games... so this looks bad already.

40 systems (x) 5 = $200 an hour if always full, lets say he has 8 hour days, open everyday... 7 (x) 8 = 56... 56 (x) 200 = 11,200 one week if always maxed out... now it's 4 weeks to a month, and chop the maxed out by 4, but multiple by 4 (for the weeks to a month), = 11,200 still. The chances are OUCH... still not making enough.

I hope he isn't counting on one high school, eventually the kids will not have money to keep coming. The location I want would be near 2 high schools and 2 mid schools. That's a lot better chances, and rent is less than $3,000 a month for about 2000 sq ft. Is it really 2.75 a sq foot? Still my question :)

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Who is your attitude?

if you copy a succesful business without alot of checking of market then you really don't get it. the location, the people, the atmosphere, the comfort value, and the wow factor are required to last in a business, but, you may be copying the business as it is now and missing how they grew it. you need to model your business based on the information at hand, close imitation might work but an exact copy might fail as ther may be some aspects that should be modified to meet the customers demands. if i saw a location that made alot of extra cash selling pepsi products as well as the normal gamer drinks and my customers prefered coke, would it be a good decision to buy a big supply of pepsi to copy the other person's successful business? No it would not, the business model could be copied with the exception of this little detail and would work better than an exact copy. the business would also have to change to acomodate the changes in the customer base, each generation has it's own ideas about the world and the wow value is different to each of them. the generations also change as they mature so you have to change with them. a copy of a succesful business is a snapshot of how they were, and does not reflect how they are now but it does affect your ability to meet changing demand. customers tend to frown on copies unless they improve something thet the customers are attracted to in the business type.

depending on the area 1 high school could support a huge GC for a long time. in my area there is a large government project that keeps the economy here stable while the rest of the country suffers. a very big portion of the parents living here work there and bring home fat pay checks all the time. in asddition alot of the students at schools here ride the transit busses rather than school busses as they can't drive themselves until they turn 18 and the schools do not have the budget to move them all. this changes the income figures the range from a school and the customer age range for a GC. in addition a school across the river has so many students that night classes are required because they can't handle them all during the day. alot of those students hang out on this side of the river due to the layout of the city across the river. that school would be able to support a huge GC for a very long time b4 getting too small, but by then there will be another annex to add customers to the GC and yet that school would not have many students going to a GC. the school has alot of the lower to middle class minority students and they tend to push out new businesses in favor of more gangs. my point is the number or size of the schools are really secondary to the type of students in the school and ratio of customer type students to non-customer types. if the GC find the non-customer types have gotten to be too many to keep the GC supported then the GC owner should consider some kind of advertising campaign to expand the area of the stable customer base.

if girls are a reason for some customers spending less time there then attract the female gamers and non gamers to the GC with some creative advertising (just advertising is not enough IMHO) to show off aspects of the location that would apeal to them other than just games. getting a handle on what would attract non-gamers is a simple matter of researching your customers, at the point in this example that it would happen, the owner should be good at reserching the customer base anyway so it shouldn't be a problem. Alot of businesses have changed over the years due to the customer changing and now women tend to be the big spenders,

 if a business can attract women it stands a higher chance of staying in business as women tend to change less than men during the maturing process. most large business chains that serve the regular customer aim for the women in the population as thier main target audience, as this is not quite the best place to get customers for a GC having women as the secondary customer will have to do, but, a careful planning of how to attract women can make an otherwise broke GC into a profitable one. if all tactics for drawing in business are done right the GC should be stable, but, will still require adjustments to accomodate the customers both gamers and non-gamers alike.

 keep in mind that this strategy is not perfect and must be customised to work and that spending more on advertising does not guarantee more customers or more money from existing customers, what really matters is how the money put into advertising is spent. as the options available to a GC may be vary different from another GC and the amount of potential customers seeing an ad will vary by medium and area, the type of advertising chosen is more important than the amount spent on the ads. for example if there was a simple person telling you to buy car insurance from gieco it would not be as effective as that same person doing the voice of a cute little gecko telling you to switch and save 15% yet they would be similar in price. how you use this (if at all) is up to you and does require thinking outside the box but keep in mind that i do not own a GC yet i have however thought about many ways to extend the slim profits that come with this type of business without breaking the bank, crowding the customer base out, or adding a different type of business to the GC.

How many people go to this school? 2,000-3,000? or less... that doesn't look good unless you have a majority of those people are your customers. Depends, how many students we have and how many are customers?

You definitely convinced me 1 school could help generate customers, but if we rely only on the school, yes me and you will agree... we won't make it. From what I have seen and read from research... some of the game centers are just relying on the schools as their customer base. I don't think a majority of students are gamers (last I checked, not here), but maybe somewhere else. Be lucky if 25% of that is pure cliental for a gaming center here. It's more like 10% of the students from each school. And even then, they won't always come. So you are definitely thinking right, you'll need the market know how, advertise it right, and where to pull people from.

Maybe some schools provide customers that return often, but I don't think customers can keep returning. I see it like this... you'll need customers that come often but not all the time, and a lot of different customers that come often. If I come all the time, I will run out of money... (unless I have a job and am making enough money to come just about everyday). If I am not there, that's one more person that is not there to help continue the friendly and fun atmosphere experience. Imagine coming to a nice game center, and hardly anyone or no one is there. That place is a dead beat, I am better off at home on the internet.

If we limit ourselves to a small customer number, drastically we could look at it like this. I know this is too far fetch, but just imagine. Let's say you have 16 computer stations and 16 customers that come very often (yearly). To pay yourself back that basically means they have to eventually pay you as if they bought each station themselves and own it themselves. Now let's double that number. 32 people... each person pays half and now they can only come half of the time. And so forth... 256 (come 1/16 of the time and pay 1/16 of the cost) people pay 1/16 of the equipment price for you to pay yourself back. Well equipment for 16 computers might be 32,000 = each person pays 2,000 out of their pocket (for 256 people... 32,000 (x) 1/16). That's just for that equipment... The numbers definitely need to go up... and we aren't talking small at all. With all the expenses there has to be a large customer base.

I don't own a game center either, so what we have to say may not go with others. I myself have thought of many ways to expand the customer base, even offer alternatives that will keep customers in. When it comes down to it though, location is the biggest factor. We will need people who can get to us. And if we set ourselves up somewhere that cannot get customers to us, no matter how much we try to market, offer great deals, we're screwed. So this really goes back to my question... 7,000 for rent, is it really? And how many students go to the school? That location sounds scary.

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Who is your attitude?

It seems like everyone on this form is crying the blues. Maybe you all should be used car salesman or in some other field of business. I thought this was to inspire and help however all I’m getting is everyone’s miseries and failures. I'm new to the forum and igames. First thing, why did you all get into the gaming business and what the hell are you on this forum if you hate the industry that this forum supports. This is a fantastic time for games and the gaming centers; you just have to know how to run a business. The businesses that failed we due to nothing more than poor management, inspiration, and low creative skills. C'mon people if Coffee Bean had the same drive I see here starbucks would be the Microsoft of coffee, yet you see these business right across the street from each other and both are doing quite fine. YOU CAN NOT RUN A BUSINESS WITHOUT EFFECTIVE MARKETING, CREATIVITY AND THE HAVING THE SKILLS TO EVOLVE YOUR BUSINESS MODEL TO MEET THE DEMAND OF YOUR ENVIROMENT. Forget about blaming your business failure on gas, Xboxes, playstations etc....the core problem is that a failed business has never found the need of its consumers.....it's not how big and cool you're GC is it's what you do with the space you have. You have to know what your consumers or potential consumers want as well as making your environment inviting enough to keep them coming back with money in their pockets over and over. This is effective business planning and marketing. I won't start a business to avoid failure.....I start a business to succeed. We are in hard times, and people are losing houses, jobs and their comfortable way of life. The last thing they will let go is pride, social interaction and leisure entertainment. We the owners of GCs provide that level of social leisure entertainment that may not come in the form of a new Xbox or console for the home which just downsized from a 4 bedrooms to a 2 br condo or apt. the space is smaller yet the need to relax and have fun are still a part of us all. We provide the solution to the need. Find out the right amount of consoles, comps, vending etc. that you need to make that space (no matter what the size) home to someone willing to pay you for making them comfortable and SATISFIED. Oh and as far as the funding.... no fico, no bank docs, for a small fee there is a program that will get you corporate funding for 500k in 90 days. How do I know this.....I've done it my self when a defunt partner left me hanging with a business plan in one hand and my @#$#$ in the other. Let me know if there is any interest and I'll forward the info. Listen we are all here for one reason or another I want to associate with winners not losers. I have a vast amount of recourses that I can provide and I will look to you all for the same. I'm here to learn and to teach.....SO LET'S GET BACK TO GAMING......or try selling a few SUVs’  

 

Paragraphs!  My eyes are bleeding!

You might not want to use Starbucks as an example since they announced they are closing 600 stores (Link).

While there is a lot of truth to what you say, the reality is that it is not easy to get financing and times are definitely tougher now, and depending on where you are in this country, things can be drastically different.

Let us note again that this is the public gamer forums, and to be honest I don't think there was a ton of negativity, just discussion.  Also, if we paint a rosey picture then everybody will think they can run a center, and they'll lose their shirt over it.  As you said, you can succeed if it is done right.  Seems to me that makes it at least a moderately difficult thing to accomplish.

 

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LanLizards: Mishawaka, IN
Give your opinion on
RootJack: Pirate Energy Drink

zimarm - have you joined iGames as a member so that you have access to the private forums?  If so I believe you will find more of what you desire there.  there are many "successful" gaming centers in these forums and many who have been open for 4 or more years.  unfortunately many are struggling in the current economic climate.  None are being negative just honest. most of us have much to share that you would find useful and we welcome input from new or future center owners.

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Co-Op Advertising and Marketing Committee
Game Support Committee Member

I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
-Winston Churchill

Sorry for the lack of paragraphs...and my ranting I'm just passionate about my sucess and goals in general. I'm on this forrum as will be on the others for inspirationan and guidence because I believe I have much to learn as well as teach.

That being said (new Paragraph...lol) I do have a corp credit program that will get funding of 500k in 45 to 90 days and had the need to offer that to any developing or new GCs I love the fact that we (GC owners) can come together and share resourses. I've been in marketing and run my recoord label from a grassroots marketing platofrm for years now with great sucess.

If anyone needs a resourse for financing, credit repair (so they can get financing) marketing etc I will share what I have

 

Thanks again guys...oh sorry for the bleeding eys LanLizards....

zimarm5:

It seems like everyone on this form is crying the blues. Maybe you all should be used car salesman or in some other field of business. I thought this was to inspire and help however all I’m getting is everyone’s miseries and failures. I'm new to the forum and igames. First thing, why did you all get into the gaming business and what the hell are you on this forum if you hate the industry that this forum supports. This is a fantastic time for games and the gaming centers; you just have to know how to run a business. The businesses that failed we due to nothing more than poor management, inspiration, and low creative skills. C'mon people if Coffee Bean had the same drive I see here starbucks would be the Microsoft of coffee, yet you see these business right across the street from each other and both are doing quite fine. YOU CAN NOT RUN A BUSINESS WITHOUT EFFECTIVE MARKETING, CREATIVITY AND THE HAVING THE SKILLS TO EVOLVE YOUR BUSINESS MODEL TO MEET THE DEMAND OF YOUR ENVIROMENT. Forget about blaming your business failure on gas, Xboxes, playstations etc....the core problem is that a failed business has never found the need of its consumers.....it's not how big and cool you're GC is it's what you do with the space you have. You have to know what your consumers or potential consumers want as well as making your environment inviting enough to keep them coming back with money in their pockets over and over. This is effective business planning and marketing. I won't start a business to avoid failure.....I start a business to succeed. We are in hard times, and people are losing houses, jobs and their comfortable way of life. The last thing they will let go is pride, social interaction and leisure entertainment. We the owners of GCs provide that level of social leisure entertainment that may not come in the form of a new Xbox or console for the home which just downsized from a 4 bedrooms to a 2 br condo or apt. the space is smaller yet the need to relax and have fun are still a part of us all. We provide the solution to the need. Find out the right amount of consoles, comps, vending etc. that you need to make that space (no matter what the size) home to someone willing to pay you for making them comfortable and SATISFIED. Oh and as far as the funding.... no fico, no bank docs, for a small fee there is a program that will get you corporate funding for 500k in 90 days. How do I know this.....I've done it my self when a defunt partner left me hanging with a business plan in one hand and my @#$#$ in the other. Let me know if there is any interest and I'll forward the info. Listen we are all here for one reason or another I want to associate with winners not losers. I have a vast amount of recourses that I can provide and I will look to you all for the same. I'm here to learn and to teach.....SO LET'S GET BACK TO GAMING......or try selling a few SUVs’

Sorry if I was sounding negative. But I have seen a lot of people just think they can run a business, especially people that do nothing but play video games. There's a lot more to it. And a lot of people, wanna bes, don't realize it. Either a gaming center or any small business, they go under for a lot of reasons but mostly because the owner himself is digging the hole. It's risk envolved, and sure I have my own goals too, but even though it sounds close to negative, it's more close to correct. It's better to know than not right? I'm not saying you won't make it, just people should know their stuff... research, plan, etc. And well that just isn't happening for the most part. That is why people aren't making it.

There used to be a computer business across the street from our business. They claimed they had 10+ years of experience (Phf ya right). Less than a year they were out of business. Their parts were very old and over priced. Claiming means nothing, the place had a lot of bad signs that they were going under. The owner himself did not speak good english, no air conditioning, poor location, offered computer stations for renting, but no virus/spyware protection on them, no games, no anything but internet explorer and messager, you couldn't even install anything and the price was $4 an hour. Ya it's a joke. He eventually stopped with the computers, only did repair, and selling internet service. But he wasn't supplying the internet himself, he was just a seller. On the repair side, the computers were left in pieces and open everywhere. I would never take my computer there, be afraid of it not returning with it's hardware (besides that I can fix anything myself, but just saying I would never go there if I couldn't). At the time it was $200 for a 64mb agp card. That time was not very long ago. Outrageous price. When I checked the center's rent, he was paying 2,000 a month. Well sometimes I would go by there and he wasn't open even though his hours said he was. And when he was open, the place was dead. Not very smart right?

Note: I wouldn't compare Microsoft to anything. Else it wouldn't work or lack quality. Microsoft in a hospital = we all dead. Bill Gates said if his Vista operating system was on every hospital machine we would all live longer, anyone really think that is true? 

People can try to put you down and be negative about your success and goals, but ultimately you are the one that makes that sucess go where it does. If you want to reach your goals, you will even if everyone says you won't. I tell a lot of people I'm programming a point of sales, and I have been, I have the knowledge and know-how to the works, I have a working one already in our store, but still a majority believe it takes too much work and I'm full of it. Well there's not much to say except I keep going and I get closer and closer to being done, working everyday on it. I don't let them tell me it can't be done, because I am getting there and I'm almost done. Everyone can be negative about it, but it won't stop me, my goal will be reached as long as I don't stop myself.

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Who is your attitude?

I don't think anyone on these forums is going to be getting $500K in funding in the next 90 days. Please take a picture of that check once it hits your mailbox. =)