I have a friend in Aussie my age that runs a succesful LAN party buissness and ive recently been wondering about the viablity of haveing one near me. I almost dissmissed the idea entirely because boradband is a lot more readily available here but then i read in my PC Gamer about a compuer projector capable of DVD quality video at 300" of coruse for a gamer to get one would require about 6 and a half thousand bucks on top of thier regular system and 300" of wall space with the projetor 32 feet back. Which means that the CEO's of Microsoft and Oracle can add a gaming wing to thier house but noone else can really use it. Of course it would have all the popular games and top of the line sound and controls too.

Now i cant possibly be the only one that finds life sized Kaboto running at me exciting can i? But this would require a lot of captiol probaly about 11k per comp then all that space. Question is how much would people pay for it?
If it turned out to expesnive do you tihnk i could sell adds before/after games and would you sit though them?

If only i was a millionaire the world would be a cooler place.
ShiningOne

$11k per seat? That's expensive. I kind of doubt that would fly.

Ad sales would be minimal revenue because only a few people would see them.

How much would I pay for a LAN party? I'd probably be willing to drop $50 once a month for an evening of entertainment. Broadband's great, but being in the same room with the people you're playing with and against has to be pretty cool.

$50 a month?? Wow. That could motivate me to do something with my setup. If people would pay to come, I could really get a better setup at my house -- or somewhere else. Shoot, for that kind of money, I could rent someplace.

Yhea it would probaly suck up alot of electricity too. Of course i could always use the individual computers to play DVD's on the 25ft screen. I think thats bigger than regular movies...

Then run the LAN buissness when people aren't watchin' the movies.
I drink alot while i play. I wonder if there would be money in the food...

Heh there is a big empty lot where a market used to be i wonder how much to lease.....

Well its fun to pretend anyway.
ShiningOne

Think of it like a gym: Anyone can go to a store and buy an exercise machine for $1000. Lots of people do. But most people (uh, those inclined to not just allow their butts to slowly conform to the chairs they sit in, anyway), join gyms. In this area they run about $30 per month for the most part.

There are 3 things here: first, it costs less money-per month than buying a machine outright. Second, there are lots of other types of machines and facilities available to use. Third, you get to meet people, which gives you the extra little edge of shame to really finish your workout instead of just using the treadmill at home as a makeshit clothesline.

If you want to try a LAN-party sort of setup, try to use that model. First, they don't need to buy an expensive new computer for their games. Second, you supply the games and facilities and add-ons (maybe gaming paraphenalia, drinks, etc.). Third, they get to meet other geeks there to frolick with, maybe even play non-computer games with at a different time. It could be cool, but you need to find a way to keep the cost down. $50 a month is pricey. Also, you would only have so many seats. What kind of time limit would you impose on players to make sure everyone who paid got to play?

I thought those computers with the projector were more like $7,000? Regardless, it is probably very difficult to make money with one of these things, but they do keep opening so I could be wrong. However, the arcade industry is in a huge slump, so be warned. Even Speilberg just bailed on Gameworks.

Let's run some quick annual numbers:
10 computers @ 7k = $70,000
Rent on 2000 square feet at $1.50/foot = $36,000
Two 40-hour employees at $8/hour = $33,280
(I'm assuming you can't hire at minimum wage, and I'm leaving out benefit costs. One employee could be you, but I'm assuming you cannot afford to work for free.)
Electric bill ($1000/mo?) = $12,000

That totals $151,280. There are plenty of other costs (insurance, breakage, advertising, overhead, possibly security, furnishings, etc.) so this would probably be very low. Let's say it will cost you $200,000 to start and run the thing for a year.

Assuming you are open for 60 hours a week (only two employees, and they could work alone sometimes). You've got 10 computers, so that is 600 hours of time available to sell each week. That is a total of 31,200 hours annually. To break even, you would have to charge $6.41/hour just to break even (well, you get to pay yourself a blistering $16,640). If you charge $8/hour, you can make a profit of $49,600, which ain't too bad.

However, I am making a huge assumption here that simply won't actually happen. I am assuming you are selling every single available hour. More likely, you won't see any business during school/work hours, but you will be very busy nights and weekends. Let's say you adjust your operating hours (open 3p - midnight, etc.) and can actually sell half the time available. Now, you only have 15,600 hours to cover your costs, which means you break even at $12.82 an hour. Round up to $15/hour and you make a profit of $34,000. Does this price reduce your saleable hours? In other words, are there enough people in your area willing to pay $15/hour to play 5 on 5 over a LAN?

So, dump in a ton of money, work like a dog (I didn't include any days off or vacation time in there for you), and make $34,000 in the best case? Not for me, thanks.

"So, dump in a ton of money, work like a dog (I didn't include any days off or vacation time in there for you), and make $34,000 in the best case? Not for me, thanks."

Yeah, but if you're starting it with the idea that you're going to establish a franchise, then eking out a small profit is ok, because you're going to multiply that profit and start to see some savings based on volume.

And you don't just sell time on machines. You sell candy bars, pizza, soda, t-shirts, the games, Magic the Gathering cards, D&D stuff, etc. Then you get Gateway or Falcon to give you a break on the machines in return for advertising that they're Gateway or Falcon computers, etc.

Let's not forget other alternate income, either. During the day you can serve simple lunches (burgers, hot dogs, maybe salads), and get people on lunch hours. You can rent out the whole shop to corporations for the business day for training or team-building exercises. You can also charge merchandising fees for companies to have their games played on your machines, or to advertise those games on your walls. Go cross-functional, selling other non-computer gaming material (D&D, tabletop stuff, etc.) and you could make a good sideline. The computers might even end up being the loss leader or sideline that gets folks in.

Last, if you have only 10 stations, you aren't going to need anything like 2,000 square feet. Stick in a bar and a little restaurant, and then you'll need 2000-2500 square feet. It could be a "Cyberpub," for lack of a better term.

It's a strange analogy, but a LAN shop is a lot like a paintball business. People aren't willing to pay large amounts of money to play games with eachother ($5 an hour is about the best you'll get). But, when you start to find other ways to charge them, they're more than willing to pay.

Our local paintball place charges $15 for "course fees", which lets you play there for 9 hours (9:00 am - 6:00 pm). They provide the courses, an afternoon snack and the referies. However, you are required to use their amunition (which runs roughly $125 a box... a typical 4 person group uses 1 box every 9 hour session). They also rent out everything else that a person might need for a little extra. $20 a day for a gun, $10 for camoflage bodysuit, $5 for a mask, $2 for a bottle of pop, and they make money on any of the food you happen to buy above and beyond the little sack lunch they give you. All in all a typical person who doesn't have their own equipment ends up paying roughly $100 for this hobby that costs "$15 a day". But, ya see, if they charged $75 and gave you everything you needed, people wouldn't be willing to pay it. It's almost like when they make it seem like it's your choice to pay the extra, people are willing to do it.

So as the people above said, you charge them $5 an hour for the LAN usage, but you start providing extras. $1.50 for a Mt. Dew, $0.70 for a bag of chips (no outside food or drink allowed), etc. You might not end up being a millionair, but you could make a comfortable living if it's done right.

I'm not saying it is impossible, just difficult and not likely to make anyone rich.

I actually think 2000 square feet is too low as the idea was to have the Sony digital projectors for each station, and I think the PCGamer article said those need at least sixteen feet of distance to the screen to get the really large picture. Figure a 200 square foot area per station, not including your counter areas, bathrooms, storage, etc., and you blow right by 2000. Dropping those projectors would certainly lower your costs, but then you lose your competitive advantage against other LAN centers. Adding a restaurant (which you would need for anything more than microwaveable and snack foods) adds another entire enterprise that needs to carry its own weight.

Also, my guess is that you would end up paying the gaming companies, not vice-versa. I doubt the license agreements allow you to sell time on the games, so if you want to stay legal, you probably would have to negotiate something. You might get free games, but I seriously doubt the companies would pay you to put their games on the machines.

This whole thing reminds me of Virtual World, and those are all gone now. Those had the fancy gaming stations (16 total, IIRC), a gaming & gift shop, restaurant, and bar. Of course, their real problem was only having two games.

There aren't any other LAN centers around here, so that "competitive advantage" is not something I need. I could probably cut costs by building the computers myself, and do so for 800-1000 each, depending on fluctuations in RAM and mobo/processor combos.

I think people would pay for this. And you'd probably make more charging by the hour than the $50/month that sparked this conversation. Five dollars an hour seems feasible, too. Anyone can afford a couple hours a week at that rate.

But, again, the chances of me actually doing this are pretty small.

Think about this, though: Would one (or several) of your employees be willing to forfeit up-front pay in exchange for free gaming while on the clock, at least for a while? I think several of my friends might go for that.

At this point, the up-front costs for building the computers is about the only thing keeping me from pursuing this. Well, that and my wife...

Interesting discussion as I have been threatening my wife to open up just such a business.

I think you could get around the licensing problems by selling time on the computers, not the games. You buy the games, people play them. They pay to use the computers, not the games. Or pay for entrance at the door...

I'd be interested in more discussion for those thinking of doing this.

Why splurge on the huge screens, though? Why not purchase some nice 19" (or 21"s) monitors and have one big screen? Why not lease PCs instead of buy? Dell offers pretty nice support options even with a business lease. Broadband access in exchange for advertising by your local baby bell (or behemoth bell as the case may be). Break/fix or custom-build business on the side. Computer training for those bored housewives. Email lessons and we-surfing anyone? Custom classes for corporations.

I think there is money here to be made in diversification if nothing else. My main problem? Here in Little Rock, Arkansas, I'm not sure if the market is big enough to support such a place. We already have a table top gaming center with 4(?) node gaming network. I'm still very tempted. I think a good business plan would be enough to raise some start-up capitol from the small business lenders, government and otherwise.

Thoughts?

Leasing the computers is a good idea -- it eliminates a lot of the start-up expenses. Wipe out enough up-front costs, and you could probably make money every month.

I'm all in favor of 21" monitors as opposed to the projectors. It just doesn't work otherwise, if you ask me. Perhaps one projector hooked up to a computer up front (or in another room) showing DVD's for those who aren't actively playing (waiting room, so to speak.)

Tables in another room for table-top RPG's, perhaps?

You guys are really getting me psyched about this. My wife's not gonna be happy.

Hmmm, renting the PCs is a great idea. You can rent 1Ghz machines with top of the line video cards and 256 meg of ram for something like $50 a month.

You also need to have little promotional things like tournaments and whatnot where you give out prizes. Normally you can get companies like Blizzard or Epic to give you some t-shirts, mousepads, and games to hand out. You could also give out hours of free playtime as awards. Just something that gets people in to try the games and your systems and perhaps get them hooked.

"Would one (or several) of your employees be willing to forfeit up-front pay in exchange for free gaming while on the clock, at least for a while? I think several of my friends might go for that."

There used to be a place here called The Proving Grounds which was a LA place with 8 PCs hooked up. This was a long time ago and they're long since out of business, but it was a great place. All of the employees were paid minimum wage while they worked there (even if they're your friends, they still are required to be paid minimum wage unless they're co-owners). As a bonus, the place was open from 11:00 a.m. - Midnight, so after Midnight the employees were able to play on the LAN for free. I was friends with the owners, so we all used to play from 12:30 a.m. until someone passed out or until 10:30 when people started showing up in the parking lot to play. The employees were very happy with the arrangement since they were basically being paid to do their hobby.

Okay, I'm trying to talk myself out of this, so that my wife won't want to kill me tonight...

It seems like, even all this considered, you'd have to have a awful lot of people to make money.

Assuming that you charge $5/person/hour, then:

10 people, one hour per month covers your expenses per computer. So, you've got 100 hrs./month for the computers.

For every employee, you have to have 2 people playing for every hour that employee works. So, if you figure 2 paid employees, 4 people every hour go directly to those employees.

40 hours a month go to rent, at least. (Assuming you can find a place for $200/month. Fat chance!)

So, you've got to fill your ten stations for fourteen hours a month for rent on the building and PCs, but you're only making money on six of those stations, because the other four go to employees...

So, figuring in that you have to make $700 rent per month off of six computers, you have to have a full house (all ten computers being used) for 117 hours in that month just to pay expenses of rent plus employees. Then you have to have insurance.

I dunno. Maybe it would be easier with more computers, assuming you can keep the place full. It doesn't seem easy, though. Maybe you wouldn't have to have two employees there all the time -- that would increase your profit margin. It's possible, but risky.

I'm assuming you'd want to be there for some of the time....hey, no one said running a small business would be easy.

I still lean on the side of offer two payment methods--a membership or pay by the hour.

Memberships for those families with teenage kids. Hourly for those who like to pop in now and then.

I'll try to punch up the numbers I came up with when I tried to rationalize doing this a few months ago.

Yeah, of course I'd be there. I might only need one other person to pay on a regular basis, with maybe an alternate in case he turned up sick.

I'd be there on the weekends, and Friday nights and such. Of course, my wife won't like that idea.

With my job, it'd be hard. It would be easier if I quit my job, but I'd never do that. I like to know for sure that I'll be able to pay all my bills every month.

If you were open 12n-12a during the summer (maybe longer), and like 3p-12a during school, you'd probably keep the place pretty full, and it would be a manageable schedule for one or two people to operate.

If only I could get my wife interested. Might stand a chance then. If she quit her job, signed on as co-owner, and worked there when I couldn't be there, it would be a much easier experience to make money on. Then we wouldn't have to pay anyone else -- no more minimum wage requirements.

"If she quit her job, signed on as co-owner, and worked there when I couldn't be there, it would be a much easier experience to make money on."

That seems like the key to starting a business like this; multiple investors. Get 3 or 4 friends together to share the upfront expenses and to reduce costs. Need one of the partners to know about finances to keep the books, one of them to know how to talk to gaming and computer companies, one that is independently rich to get you through the lean times, and one who is so devoted that he'd work 100 hours a week if need be.

For hours, I'd probably work it around teenager schedules as Mike suggested. 3 - 11pm Sunday - Thursday, 3pm - 1:00 am Friday, 11am - 1:00 a.m. on Saturday. I'd also consider setting aside Sunday as an all tournement day. $10 entry fee, offer prizes of 20, 10, and 5 free hours of play plus t-shirts, games, etc that places are willing to donate.

It would be rough, but I think it could work.

Summers could definitely be profitable, too. When all the teenagers have nothing better to do than spend their parents' hard-earned money so that they can play games all day...That'd be a good three months for us!!

Once things got going, profitability could come really easy! I dunno. It could work.

"If she quit her job, signed on as co-owner, and worked there when I couldn't be there, it would be a much easier experience to make money on."

Hey, if you set your wife up as owner, you can really clean up on financing deals--as you'd have a woman-owned small business--the government loves to help finance those kinds of concerns.

Ok, I've got the accounting background (CPA), so I'll handle that side of things.... =) Anyone want to sign up to work 100 hrs a week?

And who's the anonymous millionaire that's going to back our little business? I know someone out there is looking for an investment...

I might be able to talk a millionaire into backing a venture. I wonder if he would require me to pay back the money? =)

Nah, I'm sure he wouldn't. We're only looking a couple hundred thou...

$2500 - Up-front capital, to include buying beverages, tables, chairs, deposits on computers and building

$5000 - To put in the account, in case we don't make money for the first few months

$2500 - Nation-wide advertising for the grand opening

$8000 - To open up four separate Swiss bank accounts

$182,000 - For the four of us venture capitalists (co-owners) to pocket, as a token of good-will (to then be transferred to afore-mentioned Swiss bank accounts)

I'm sure he'd never miss it. After all, what's 200 grand to a millionaire?

(Note: In a pinch, disregard numbers 3,4, and, as much as I hate to say it, 5. Perhaps replace numbers from 3 with numbers from 2 before disregarding 3. I'd take five grand, if that's all I could get!)

I honestly don't believe you'd be able to get enough customers.

Most of your potential customers are going to be people who already own their own equipment. That's how they were exposed to your product (LAN gaming) in the first place. Most of those people are going to be unwilling to spend additional funds to do what they already do at home. We're not talking about really social people here, mostly. These folks are quite satisfied playing over the 'net with other anonymous faceless people.

I think my idea is better. Put together some kinda of easily portable LAN gaming setup. Maybe 4 high powered laptops. Load up some simple to play/quick multiplayer games that anyone can pick up, FPS deathmatch, racing, etc. Get a deal with the local Sports bars. Sell time on the machines to bar patrons.

Not a bad idea either!

However, I don't think your target market is hardcore adult gamers--they (as always) would be a niche target who might be willing to rent the place out off-peak for a LAN party perhaps. You would welcome the adult hardcore gamer, but you would thrive on the teen crowd with nothing to do while their parents shopped at the mall--it could be an approved hangout place. Hey, parents bought pokemon right? So, why not membership at a gaming parlor? Would this be enough? Maybe not, but how about training, custom work, break/fix? (Heck, I'd even run my tax business out of the same location) I think it could very well work, assuming you have a large enough market. Will it make millions? Most small businesses don't. Could it get me out of the rat race? For a while.

Keep the thoughts coming. Very stimulating!

I dunno. Several of my friends and I get together periodically (read: as often as our significant others will let us) for this express purpose. We'd love to invite others, but it's just not feasible. Several people have expressed interest in the idea, but I only have two computers, with two of my best friends' computers configured so that all we have to do it bring them over and plug them in. We can't feasibly have more computers in the house, and my hub only has four ports.

We would pay $5/hour to get together somewhere else, where computers are ALWAYS set up, so that we could have more people join in, and so they wouldn't always have to bring their own computers. There has to be more people in the same situation.

Plus, in my area, very few people have broadband connections. It's just not worth it to try and play on the internet without it. (Nevermind the fact that four six hours a month, at five bucks per hour, you could get a cable modem.)

I think that there are probably a lot of people who are into gaming that simply haven't thought a whole lot about the idea of multiplayer gaming. Perhaps we could lure some console gamers over, too, as a lot of FPS fans on the console would be easily swayed.

I disagree, Bob. I think we'd have an audience.

If you build it, they will come.

Disclaimer: Before opening such a place in any community, take a survey of the jr. high/high school kids in the area. If a good percent of them express no interest, it'll never fly.

True, true. And kids are a fickle lot.

More power to you guys.

I have two thoughts.

The first is look to Korea. PC gaming has taken off there hugely based upon LAN cafes just like the one you're describing. StarCraft has sold gobs and gobs there for MP LAN play, and Rainbow 6/Rogue Spear is a close second for the same reasons. Do some research into how they do things. Don't worry about Little Rock--it's big enough. I'd worry if you were trying in San Francisco, or somewhere else with astronomical rent and wages (as well as other available entertainments :) ). Derive additional revenue from Jolt and Doritos, and you're done.

Secondly, buy all the games. Really. Please don't buy one copy and pirate it to all 30 machines. I know if you contact us, we might be able to cut a bulk deal on 30 copies of our games, and so would other companies, I'm sure. There will be a real temptation to cut corners here, but please don't do it. You'll set a better example for your clientele if you don't. You'll more than make up the 'loss' in support from companies if you do.

KP
Standard Disclaimers Apply

I second every word spoken there, Kevin!

I would never dream of pirating software in a business environment such as this. I'd be lying if I said that I have never pirated software for personal use (I'm so sorry! I feel bad!), but never in a situation such as this.

Plus, more and more companies are switching to CD keys. (You can't play on Battle.Net if someone is already logged on with the same CD key as you have, unless one of you has a spawned copy, but then only one of you could start the game.) So, I have a feeling that pirating the software, while bad from an ethical point of view, would be equally bad from a business point of view.

Here's a thought, though: Would you have to worry about kids running off with CDs? Perhaps a -nocd crack would be needed for every computer, for every game. Yech. I guess you could keep all the CDs at a central desk, and just hand them out as kids wanted them, making them sign for them and such...But who wants that? How else could you prevent this?

"I guess you could keep all the CDs at a central desk, and just hand them out as kids wanted them, making them sign for them and such"

I think that's a perfectly viable option. Some kid wants to play SC, make him sign in, give him the cd, then make him give back the CD before you let him leave. Take collateral.. maybe charge 10 bucks to get in, then give him 5 bucks back if he brings the CD to you. There's no way to be totally safe about it--someone out there is going to rip you off sooner or later--but even having some sort of system in place to prevent theft or abuse of the service will greatly reduce risks.

Personally, I would love to have a big LAN place around here. We have an internet cafe, which is supposed to cater to gamers, but it's usually pretty dead. If I had the capital, I'd definitely start up a LAN cafe--in fact, it's in our business plan for GamersClick, should the site become extremely profitable.

The biggest problem, I think, would be to draw enough interest. Say you have 30 devoted visitors. That's great, if they're always sitting at your cafe. Playing a game against 2 other people just isn't worth whatever people would be paying. You'd have to have enough interesting stuff going on all the time, like tournaments (with prizes) and such.

I think it's a great idea, and it'd be nice if there were more good gaming cafes around... it's just that it will take a lot of planning.

Game Domain LLC is my hometown gaming center. I sort of covered the Nox launch there (did a first impressions piece for Gone Gold) a couple years ago. I've lobbied the developers of Throne of Darkness to do a similar launch event (whether there or elsewhere) cause I think it will need some good word of mouth to survive on the suffocating marketplace. :)

Not sure what their equipment is now. Back then they were using high end PII systems with mostly 17" monitors. The owner arranged them in groups of four around pillars in the space. The networking stuff and power cords mostly ran into those pillars. It's located in your average strip shopping center, and it seems to feed a lot of business into the Jerry's restaurant next door.

The Web site has details on the fees and such. It's had the same owners these few years so I guess it's at least keeping him in business.

CounterStrike and Unreal Tourney seem to be the perennial favorites at the couple gaming centers around here (though Star Craft, C&C 2, Diablo 2 and some other things are popular as well).

Hell, do what they do at bowling alleys... Take one of their shoes and give it back to them when they return the CD. :)

Truly, you need it to be a Cafe style of place. Lets say there are already 10 people playing and 6 more walk in. The 10 people still have another 45 minutes left that they've paid for, so what do you do? You tell the 6 people that they need to wait. Good luck finding a 17 year old who's willing to wait around for 45 minutes to play a game without something else to do.

Maybe you could partner up with an arcade or something. If you are on the east or west coast you could go for a coffee house, but that doesn't work too well here in the Midwest.

Here's another log for the fire -- close to where I live there's a coffee house, and they have about 8 PCs set up that they rent for $10 for 2 hours. They PCs are almost always busy, and you know what game people play? EverQuest. Not only do people play, but there's usually several people huddled around the PC, kibitzing. It's not unusual for people sitting at PCs next to one another to be playing on the same server and grouping. They seem to have a lot of fun being able to talk to one another as they play.

Monkey in the wrench: In reading through Supertanker's breakdown of the finances I started to wonder how people are charged for crash-time. Would you have to pro-rate their time if there is a crash, and then a reboot, or installation problems? Or is there simply a "no responsibility/caveat emptor" clause when they sign on?

How do they handle this in all-knowing Korea?

Amanpour

I don't think I could charge people for crash time--hot spare, anyone? Keep the customer happy, and he'll tell a few people, piss him off and he'll tell the world.

Kevin, thanks for the comments! I'd certainly not jeopardize an entire business to save a few bucks on software. Besides, pirates piss me off. They are the reason the damn games have to sell for $50 in the first place.

Let's say for arguments sake that you do have 6 people waiting for a turn at the filled pcs. What about a couple of 35" TVs with a Dreamcast and/or PS2 with a couple of comfy couches? TV's are pretty cheap and the consoles are not too bad, finding used games should bring the cost down even more. After visiting a nice big arcade in Dallas, the games left me unimpressed. Maybe the difficulty was set too high or something. I'd much rather sit down with a PC or console game anyday than fight with an arcade machine. (I can't find a Galaga machine to save my life).

Yeah, I second that motion. Perhaps have a movie playing, tables set up for pen and paper RPGs or (God forbid) doing homework. Ideally, you would monitor stuff like this, too. If you see that you consistenly have five people waiting, perhaps you should go and start renting five more computers.

My wife and I discussed this last night, and she's actually all in favor of it. (Her exact words, at one point, were "You're gonna play games one way or the other; you might as well make some money doing it!") It didn't hurt my case that I opened with "Hey, honey, I thought of a way that you could quit your job and we could still pay the bills!" She loved that. She even agreed that working there wouldn't seem like work, and she would work there when I couldn't. And if we were there together, it wouldn't cut into "our time."

So, we're discussing specifics, now. Location, name, timeframe for startup, etc. Eight months from now, there might just be such a place...

Excellent, Murph! Keep us posted. I'm going to talk to my wife about it again tonight.

BTW where are you located?

Naturally, I will.

We're just outside Tulsa, OK. If everything goes accoring to my wife's plan, though, there will be one in a city near you soon!

Tulsa isn't that far....when you are up and running, I'll come visit the place.

Yeah, it's just a couple of hours, and we'd be sure and give you some free time.

Like I said, my wife wants to (eventually) open one in every city in the world, I think. She's convinced that this is the way to go.

There are several other suburbs of Tulsa that we could probably open these, and make some money. In five years or so, we could concievably have four to six different locations. It doesn't take much profit per location, at that point, to live comfortably. If we found out that there were a market in Oklahoma City...I'd quit my job.

Interesting stuff. I like the way your wife thinks. I know for a fact that if Little Rock could support one that Fayetteville would--in fact I'd be willing to bet that any College/University town would probably be able to support one--and supply some willing interns from CompSci departments (as this would involve networking, admin, some database work, etc).

Exciting stuff.

Great! I'm glad to see one of us has the guts to turn this conversation into a reality. It really sounds like a fun business with a lot of potential. You should pick up a federal small business grant application from your local city hall. They give away thousands of dollars to help you get set up if the business is something fairly new to the area, and this definantly will be.

They also provide a lot of zero interest loans on top of the federal grants. It works a lot like a student loan where you aren't required to pay it back until 1) you start making enough money or 2) your busines shuts down.

Yeah, my wife is definitely the coolest!! The thing I don't know about with college towns is why they would pay when they are already on a huge LAN. I don't know how well that would work. It might, but it might not.

Yeah, we'll look into the grants and so forth. And, keep in mind, that this conversation is still just conversation -- it's just a conversation that my wife is involved in. I expect that it will, at some point, become a reality, but who knows how long it will actually take...The beauty of this is that the capital is fairly small -- just a little for tables and chairs, games, and probably deposits on the building and computers. The rest will be paid for monthly, from the security system that you know we'd have, to the computers, rent, DSL access, etc.

More as it develops...

The thing about the college LANS, it looks like a lot of them are going to be implementing restrictions on the use of their network. And, well, not all college kids have fast computers with a nice 3D card.

I don't know. It could work.

That's true. I guess when you keep in mind that they're getting state-of-the-art computers and the privilege of sitting next to three or four of their friends while playing -- well, that's something that you just can't get anywhere else. Even on a LAN.

Perhaps you're right. Perhaps being a college town would help more than it would hurt. (Stillwater, here we come...)

I wonder if Tom would let the name Shoot Club be franchised out. Pay him some royalties maybe?

I don't think it would work for the name of the business--but it might work for a gaming group associated with a gaming center. Organize tournaments using the "Shoot Club" as the core? Have a "Shoot Club" newsletter?

Just thinking out loud, don't mind me.

Using "Shoot Club" or anything that focuses on any sort of violent aspect, while sexy, will launch all kinds of opposition against you. People are far too sensitive about the [perceived] links between violence in entertainment and violence in society, especially considering where your demographic starts. It does not matter that there is no actual link, parents and other lobbying groups would be all over your ass.

I'm not saying that you'd have to choose something completely innocuous, like Computer Fun Club, but I think staying away from anything that calls to mind kids with guns would probably be a plus.

Amanpour

My wife suggested Gamers' Corner. Not too bad. Maybe a springboard for something.

Hey, while we're talking, I'd love to see the crime rate in Sand Springs (where I live) go down with the opening of this little club. As we start to open clubs in other towns, if their crime rates went down, too -- hey, now we have statistics!!

I agree which is why the name for the location would have to be fairly innocent. I'm talking more of an "adults only" or "18 and over" type thing--hey, it could be a secret society. =) Opposition of some sort might actually be good for business! Bad publicity (assuming you haven't killed anyone or sold drugs out your backdoor) can be a good thing.

I don't know. I'm not all into living my life so as to not upset other people. It is their right to waste their time being upset with me. It would of course have to come down to a business decision. My next question would be: Are these same people going to attack my business anyway because there are violent video games there? Are those sorts of people going to allow their kids to play games at my shop in the first place?

My point is this. If you attack me (my business) without attacking the whole culture of violence and abdication of personal responsibility, then I'm going to counter-attack with everything in my arsenal. It does matter to me that there is no proof or direct link. We've got bigger problems than violent video games, in my opinion.

Little Rock already has a Game Room--it's the boardgamer's place with the small (crappy) LAN. I'm still trying to come up with something catchy or clever, without being corny.

Good points, all.

Now: Location. With your target audience being gamers, casual or not--how important is location? I've got a spot in mind right next to a movie theatre that does a booming business--the rent might be too high, but it has been vacant for a while now. Do you need to be in a high-traffic area? I'm guessing it will depend on how much money you need to bring in to stay afloat early on. Thoughts?

I'd sit down at a couple potential locations for a day, and count the number of people who walk by, as well as the number of cars that drive by. Initially, you'd have to have a good location, or else no one is going to notice your business. You could do a lot of advertising at nearby colleges or malls or something, but location will probably be the most important thing to look at.

Decide on your target demographic - I'd assume this would be 16-25 year-olds. Say, have it open to all ages until 10pm everday, and on weekends, make it 18+ from 10pm-2am, and see about getting a liquor license - just to sell basics like beer.

Presentation would be a big part of it, as well. If I walk into a "LAN cafe" that has three chairs, all of different styles, sitting around some crummy table with three different computers on it... I'm going to turn around and walk out. Check out http://www.thestompinggrounds.com/ for a good look.

Make sure you offer something unique, that people can't find anywhere else in the region. Have all of the latest games, best hardware, etc... make it fun... have tournaments on a regular basis, give out prizes for the top performers in a specific game every day.

Yeah, this has been our plan. We'll mostly get word 'round at the jr. high and high school, and maybe do a little advertising. There are several places we've talked about, not too far from the high school, and also near Taco Bell (open 'til 2).

My wife is a little concerned about minors playing "M" rated games. Do you guys think it would be a problem getting their parents to sign release waivers and such, to make sure that we can't be held responsible?

I say you just ask for ID if some kid wants to play Quake or something (before you give him the CD, which you have at the front desk). If he doesn't have any, tough luck. Let him play something else. Possibly have their parents come in and sign a form, allowing them to play it...

Thanks for the link Tom, I completely agree with your comments on presentation. Either do it right or don't bother.

The biggest surprise at the stomping grounds was their pricing scale! Wow! $20/month and you only get 3 free hours and then a discount on any additional hours. I need to rethink the whole pricing thing again.

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Say, have it open to all ages until 10pm everday, and on weekends, make it 18+ from 10pm-2am, and see about getting a liquor license - just to sell basics like beer.

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Possibly have their parents come in and sign a form, allowing them to play it...

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Well, the alcohol thing was just a suggestion - might bring in people looking to do a little gaming for a stag party or something... always something to think about

Also, with the form thing - make sure the parents are actually there to sign it. Kids forge signatures all the time :)
Then keep the kid's form in a file folder or something... then the next time he comes in, pull out the folder, and if his form is in there, let him play.

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Well, the alcohol thing was just a suggestion - might bring in people looking to do a little gaming for a stag party or something... always something to think about

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Do you guys think it would be a problem getting their parents to sign release waivers and such, to make sure that we can't be held responsible?

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Hmmm. I think I'd get around this by allowing parents to sign a blanket "M" rating when first purchasing a membership or a few hours. I don't think a lot of parents are going to care. I know there are a bunch of kids out there playing CounterStrike, UT, QuakeIII, etc...and they got the games somewhere. Even if their parents didn't buy them personally, they either know about them or are not involved in their children's lives/upbringing at all.

Still, this is something to give some thought.

Well right now most stores don't ID for M-rated games. Although when I was at EB a few weeks ago, a kid (~10 years old) and his mom asked for a copy of Onimusha. The clerk asked the lady if she was aware it was M-rated. She turned to her son and asked him if that was okay. He said "Mom, don't worry its fine." What else was he going to say? "Gee mom, I don't think I'll be able to handle it, lets get Pokemon instead?" I don't think so.

Another consideration: even if you have some parents sign waivers and others don't, any kid can look over someone else's shoulder and see whats happening in the game. There isn't any real way to restrict that, so you could still have the kid being exposed Soldier of Fortune or such.

Personally, I think its fine for 90% of teenagers to be playing those games. If a parent wanted to make a big deal about it though, things could get uncomfortable for the gaming center.

I think once you throw out the giant screens, it becomes much more viable. So Murph, when are you opening one near me? I want to go in and shark the kids. "Gawrsh, that looks purty fun, do you mind if I try? How about we make it interesting..." They'll never suspect an old guy like me, especially if I start out by purposely playing badly.

Lando, I've got to break this down.

"I'm not all into living my life so as to not upset other people."

Then don't go into a business that involves serving customers. Period. I'm sorry to put it that way but being in retail, or food service, or entertainment on that level--whatever category you would put this business in--puts you into that subset of people that necessarily lives their lives so as not to upset other people. I know you've heard that famous and stupid axiom, "The customer is always right." Well, it is false but if you want to succeed you have to pretend to believe it. So not being into living your life so as not to upset others ain't gonna cut it. Not if you want to succeed. Sorry.

"It is their right to waste their time being upset with me."

Fine. The time they waste being upset with you is time they spend not spending money in your establishment. Or not letting their kids spend money there. Or their husbands. Or lobbying against you getting a permit to be there.

"It would of course have to come down to a business decision."

My point exactly, and why I brought all that up.

"My next question would be: Are these same people going to attack my business anyway because there are violent video games there?"

Possibly. Or maybe an MSNBC correspondent will just be looking for a lead in and you'll be it. Did you read what Ashcroft said? As misguided as that is we love our scapegoats in America almost as much as we love dodging responsibility for anything and everything.

"Are those sorts of people going to allow their kids to play games at my shop in the first place?"

Yes. And they will still reserve the right to blame you after the fact because people are bozos. Of course we have to put "allow" in quotes. Many parents don't really "allow" their kids to do anything. Kids just do what they want because the parents aren't present so much of the time and haven't made any real choices about anything concerning their kids. They are reactionary parents only. Then when something awful happens they rush into the principal's office demanding heads on platters. "But you allowed them to do such and such." "I never!"

"My point is this. If you attack me (my business) without attacking the whole culture of violence and abdication of personal responsibility, then I'm going to counter-attack with everything in my arsenal. It does matter to me that there is no proof or direct link. We've got bigger problems than violent video games, in my opinion."

Fine. An admirable stand. But one I would assert is a luxury you cannot afford if this business is the basket for your proverbial eggs.

Lando, I'm not trying to discourage your business venture. It is wonderful that you have the passion for something like this. What kind of industry do you work in now? Do you deal with customers on a daily basis? When was the last time you had a job where you did? Please please please please please, before you mortgage anything be sure you are ready to deal with their shit morning noon and night. You may be right in all of your stands. Your philosophy may be right on the money. But winning an argument with a customer most often means losing a customer.

Amanpour

Well put, Amanpour! You know I'm on your side, Lando, but he's right. You can't always take that attitude up front if you want to keep customers coming back.

On the issue of parents signing forms -- I can't afford to have parents suing me because their kid shot somebody. I don't think there's any way they could get a conviction to stick, but if I'm opening up a business, I can't afford the attorney fees, and I certainly don't want the court shutting me down. We have to get parents' permission somehow. But, you're right -- no kid wants their parents coming with them. How do I handle this?

"So not being into living your life so as not to upset others ain't gonna cut it. Not if you want to succeed. Sorry."

So by this token, Howard Stern and Madonna should both have failed miserably, correct? I don't buy it. They are both in retail in a manner of speaking, they depend on consumers to listen to them, right? Yet, they routinely piss off thousands or even hundreds of thousands of people, sometimes even daily. I don't believe either of them have filed for bankruptcy protection yet. Yes, they are extraordinary cases, but they prove there are exceptions to the silly mainstream view that you have to please everyone all the time. Impossible.

"Fine. The time they waste being upset with you is time they spend not spending money in your establishment. Or not letting their kids spend money there. Or their husbands. Or lobbying against you getting a permit to be there."

Let's see, if they are upset with me, I'm already open for business. So, how are they going to lobby against a permit for a going concern? If they don't like the games, and they are involved, they won't let their husband/child frequent my business at all. If they weren't involved, they aren't going to get involved. I would be curious to know of ANY parents who took away all violent video games from their children in the wake of the recent school shootings.

"Kids just do what they want because the parents aren't present so much of the time and haven't made any real choices about anything concerning their kids."

First, thank you. You just made my entire point for me.
Second, not my children.

"An admirable stand. But one I would assert is a luxury you cannot afford if this business is the basket for your proverbial eggs."

Hasn't anyone told you never to put all your eggs in one basket? =) Just to put your mind at ease regarding my future--I'm a CPA, an MCSE, and I'm just about to finish up my IBM DB2 training. I've planned my life so as to have several paths open at any given time... I say I've planned, but it actually just happened that way.

"Possibly. Or maybe an MSNBC correspondent will just be looking for a lead in and you'll be it. Did you read what Ashcroft said? As misguided as that is we love our scapegoats in America almost as much as we love dodging responsibility for anything and everything."

Yes, I read what Ashcroft said, and he was wrong. Did you read the Surgeon General's report?
I believe that I can sit down with anyone and explain in a very intelligent, diplomatic way my stance on violent video games in a way that will make sense to the common man on the street. They may still disagree with me, but that is anyone's right. I will still refuse to go along with the abdication of personal responsibility. (And BTW, send MSNBC on down--I need all the free publicity I can get.)

Amanpour, don't get me wrong. I see your point. I see it well, however, I completely disagree with it. Retail, foodservice, I run a small tax service--I like to think I know a little about customer service. I know what customers are like. I know that if you treat them fairly and deal with them honestly, they will respect you for that. I also know that there are some customers who you can never please, no matter what you do. Am I willing to put up with mountains of shit to succeed? Certainly. To make customers happy? Absolutely.

Argue with a customer? Never. That's a lose-lose situation. If I can explain my position to someone who takes issue with what I do, and they don't like it. What then? Do I close up shop? Move away? Political correctness be damned. I believe for every "potential" customer you may lose for sticking to your guns there is a possibility you may gain another because Americans admire that.

I do appreciate the comments. This kind of discussion is extremely valuable from where I'm sitting. Keep it coming! I guess my final thought is that I don't think my position precludes the possibility of success.

Michael,
Insurance--an umbrella policy to cover the unlikely event that you were sued over something like this.

You can't always take that attitude up front if you want to keep customers coming back.

Hey now! I never said I'd take this attitude up front, and I'd certainly never use the language I use here. I'd couch it a little differently. I'd be the first to admit that sometimes you have to swallow a bitter pill to please a customer.

But again--these people (activists especially) are NOT going to be your target market in the first place.

BTW, Amanpour what industry do you work in and do you deal with customers every day? Quid pro Quo.

I work in the IT field dealing mainly with internal customers. I recently moved from Help Desk support to Data Warehouse Support. I was one of the most well-liked techs on the Help Desk, and that is saying a LOT! =)

My apologies if I assumed too much -- it certainly sounded from one post as if you've go head-to-head and toe-to-toe with customers if need be, and that's not a good policy. Re-reading, perhaps I shouldn't have interpreted said post that way.

Granted, the activists wouldn't be a target market -- but you'd be their target, if they needed a scapegoat. There is a 99.9% chance I don't have to worry about that. Nothing like that has happened here, and I don't expect it will. Giving these kids an outlet for their aggression is more likely to prevent the situation than spark it.

Unfortunately, even with a 99.9% chance, there's still that one in a thousand. Considering that we're planning on making good chunks of money in the long run with this, we're likely to see a thousand kids, and even with 99.9%, odds say that one of them is at least at risk of doing something stupid, and I don't want there to be any way for someone to try and hold me responsible for that.

No need to apologize...I'm sure my remarks sounded like I was ready to pound some ignorant customer. That's the shame about message boards, losing all those nonverbal communication methods and clues.

I'm all about customer service--in any industry it keeps customers coming back. I'm also a firm believer in not letting a few people take advantage of you because "the customer is always right." I know plenty of them. Visit any of the "coupon" sites on the web. Some people live to exploit others. (Different situation, but I think the overall principle remains.)

In this sort of business, you'll want to minimize liabilities. You'll have to get some form of parental permission, or else you could be held liable by some ignorant parent.

Exactly my point, Tom. Does anybody have any (good) ideas as to how to go about doing that? Kids will forge forms, but parents aren't all that likely to come around. I don't know what to do.

You could first have the kid bring in the form, and then call the parent to confirm that he/she signed it. That's about all I can think of, though.

Yeah, that's not a bad idea. We could try and get addresses of people who come in, and then try and contact their parents after the first time the kid comes in, but then you're only getting permission after the fact, and it seems like a lot of remaining liability.

What age cutoff would you use? 18?

Does a 17 or 16 year old really need permission from their parent(s)?

I'd say 12-13 yes...but 16 and up....I'm not sure.

Well, according to the ESRB, 17 is the cutoff for M rated games. I agree -- I'm not sure a 16-year old needs it, but we may have to go with the ESRB.

All these hassles over teens and misguided parents.. All the more reason that my idea is better. Combine this whole thing with a bar. Prefereably one with an already established client base.

How long has it been since any of you were in an arcade? None of the arcades near me are filled with teenagers.

We only have one arcade in our area, and it's always packed with teenagers.

First off, some pretty good financial planning has gone into this so far. However, just a couple things I haven't seen mentioned:

1. Taxes. I'm not sure what oklahoma corporate taxes are, but they'll exist. Additionally, you're going to have to pay Social Security withholding on wages, so add +8% or so to your wages upfront.

2. Putting up with kids all day. I really, really hope you like dorky teenagers if you do this. It's not that big of a deal, but if you're dealing with the lil' bastards dumping Dr. Pepper into the monitors twelve hours a day for three years, I can see it becoming one.

3. M rated games - you need as much playtime of these as possible to make a profit, I think. The ratings aren't legally binding anyway, so you should probably just adopt a policy along the lines of "12+ can play M-rated unless their parents tell you not to let them," or fourteen, or whatever. The form signing thing is an excellent idea from a practicality standpoint, but you're just going to royally piss off your userbase if they a) have to get permission from their mom to play there and b) horrors of horrors, their mother would have to come in *with* them. Especially in the south. For refereence, arcades don't have age requirements at all, and they seem to be doing pretty well.

Unless you have a seriously geeky 20+ population, I can't imagine how you can make money on this from adults-only, too.

Jason -
Point by point:

1 - Yeah, I've considered taxes. It'll certainly suck come April 15, assuming I've made any money at all, but that's to be expected with any business.

2 - Always a problem, but if they're playing games on these computers, you'd hope they'd take care of them.

3 - I hadn't really considered arcades -- don't you think that there could be some problems of accountability from a legal standpoint is one of them goes and does something stupid? I don't want to be held even remotely responsible.

Good thoughts, though.

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Unless you have a seriously geeky 20+ population, I can't imagine how you can make money on this from adults-only, too.

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Oh, I'm sure there's some drinking-age geeks out there, but I have no idea if it's enough to be a profitable business based solely on them. If you merge it with a bar as some have suggested it becomes a much better idea, though.

I think the arcade analogy is the way to go on terms of liability, but only marketing analysis to determine how much of a financial hit you're going to take for the form thing will tell you.

Someone tried to open a combination of a computer parts/repair store and gaming center in Norman last June. I'm pretty sure it's "Computer Masters," but I could be wrong; all I remember is that it was located next to the Quarterhouse, in that little business area across from the student union.

It'd probably be a good idea to go down there and spy on them, and maybe interrogate the owner for ideas. That is, if they're still in business.....

I have friends in college in Norman. I'll have them scout around and see if it's still there. If it is, I'll go and speak with the owner.

I still have reservations about doing this kind of thing in a college town, though. I'd think we'd be more successful here, where there's hardly anything to do.

On the financial aspect of things....I'd recommend setting up the business as an LLC. You avoid all corporate taxation...and thus double taxation this way. You also gain the benefits of a corporation with respect to liability. You can also avoid some taxes by using draws in the place of salary, mainly SS taxes for yourself.

Good thoughts, Jason! I think you may have a point on the 12 and up type rule. I think that would fly here.

I guess I'm not as worried about being "held responsible", but I'm coming to realize that I really am an a$$hole.

I don't expect it to be a problem; I'm just trying to think about everything. As I said before, things like have never happened here, and I don't expect them to. But then, nobody expects it to happen in their town.

What's the old saying....fail to plan....plan to fail. So, I'd say you are on track planning for everything--most likely it won't happen. But if it does, it won't catch you completely off-guard and unprepared.

Yeah, that's what we're going for. You're right. It most likely won't happen. Chances are one in a thousand, at best. But there's always that one...A good insurance policy would probably cover court costs and so forth, as you said before, in case the worst happened. Plus, as was also pointed out, arcades don't worry about that, but arcades are also more "socially acceptable," as they've been around for so many years. With this being a new business, I run more risk of being chosen as a scapegoat if something bad were to happen.