Thoughts and experience on Gaming Cafe's

Hi there.  Myself, and two other friends are in the information gathering/business plan writing process of forming up and opening a gaming cafe.  We are looking to have a mix of terminals and tvs with consoles attached to them for gaming, most likely some tv access if folks are so inclined, and at some point displaying movies either on t.v.s or by projectors.  In addition we are contemplating renting out the space to local colleges/businesses/etc as a classroom or demonstration space.  We are looking to locate in an area that would be centrally located in terms of collegs, h.s, and the more affluent areas.  A major point is to not create a location that will become a 'hole in the wall', but instead be a more open location.   We want to promote social networking in such a location.  From research I have done, the most successfull places seem to focus on this aspect, and those that have failed really haven't done as such.  In addition to games, we are strongly considering serving alcohol to promote the social setting.

My questions to you, the community are thus:
1) There is not a tremendous wealth of information out there on why most gaming cafe's fail.  Does anyone here have ideas/considerations?

2) Does anyone here have ideas why particular places might overwhelmingly succeed?

3) With those questions being said, please provide any wisdom that you all may have.  I'm not looking solely at the responses given here, this is simply to supplement my already existing research.  And apologies if any grammar/spelling is off.  Thanks a lot for any help, insight, and wisdom any of you can provide.
ValhalarisingAsked:
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n64webCommented:
From what I've seen in my local area, the most successful internet/LAN/gaming cafe's emphasize the social community aspect.  In other words they get people involved with more than just games, they end up hosting functions, parties, and competitions.  Usually the business in this realm that tend to phase out quickly are those that only focus on gaming only.  It's simple math, why do I as a consumer want to go play a game at a cafe that I can play at home on my computer/console and play with my friends over the internet?  One business that has been in my area for years started with only a few computers LAN'ed together and then they added a coffee bar, and after that they added a retail section where they sell games, consoles, and peripherals.  Others I've seen come and go only offered internet browsing and just straight up computer gaming.

Hope that helps.
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n64webCommented:
Here's a good article, its dated but has some good points:

http://news.zdnet.com/2100-9595_22-102491.html
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ValhalarisingAuthor Commented:
Thanks.  One thing I'm definately noticing in many strict gaming facilities, is a 2-3 year curve.  Year 1-1.5 you do really well with business towards the end slowly edging off.  Year 1.5-2.5 your not making enough to update your tech, which falls behind, facilities begin to look crappy, you lose customers save for those few dedicated crazed few.  Year 2.5-3 business falls to the point where your loosing money/maybe just breaking even and you crash.  

I absolutely want to avoid doing this, and so it seems really that emphasising social community is really where it is at for a successful business in this line.  Go go Grassroots and such.  Keep the advice coming folks it's all helpfull!
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FrankB715Commented:
The one piece of advice that I can give you is....  DO NOT serve alcohol, unless you are planning on opening a bar or restaurant with the added attraction of offering video games. Here is why.
Serving alcohol brings on all kinds of other issues that you will have to deal with. Legal and otherwise.
Those who frequent gaming cafe's are generally below the legal drinking age. Here in NJ the drinking age is 21. Do you want to worry about checking id's or maybe accidentally serving to a minor and getting closed down or sued. Some parents will not want their kids going to a place where alcohol is served. This will limit the number of potential customers you could have.
Alcohol attracts a whole different element to your establishment. Are you prepared to deal with fights breaking out or maybe weapons being carried onto the premises.
I don't know where you are located but in NJ a liquor license is required for any establishment that sells alcoholic beverages. Liquor licenses here are extremely expensive. They can cost close to a million dollars. No, that's not a typo that's just New Jersey's way of gouging the business owner.
If you are prepared to deal with all of the issues that serving alcohol can bring than maybe you should be opening a different type of establishment. Maybe a strip club. You would probably make a heck of a lot more money.
Good Luck!
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crangryCommented:
My friend and some of his friends opened an Internet/gaming cafe in Calgary, and they've managed to do quite well in a market where, on avarage, most could quite easiliy afford computers/games of their own. Top this with the highest broadband penetration in north america, and you shouldn't be looking at fertile ground for this type of business.

Community is certainly they key to success. They're all gamers themselves, and treat the clients like friends instead of customers. They understand how gamers want to be treated, communicated with, and what they want available in their facilities, from games to food to events.

I would certainly say the key to developing a good community is management that understands the people they are serving, and maintaining a list of games available that not only cater to the newest trends, but also gives the "legacy" CS players and their like a safe haven to come and flex their muscles.
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