This is a post series that I started 2 years ago on my old blog that hasn’t made it over to this new site. I have taken about a dozen inquiries in the last few weeks from prospective LAN Centers and it really brought me back to this series. I will start by reposting the original few blogs and then pick-up where I left off on the series. Hopefully I can categorize all of this into a nice little section of the blog for reference.
Originally written 8/27/2009
Lately I have been talking to tons people who are thinking about opening a game center as well as those who have recently opened and are still trying to find the magical solution. eBash currently has 3 centers open and we still push the limits of the industry and constantly try new ideas and concepts in the stores. A recent conversation with David from Virtual Arena (2010 NOTE: R.I.P. Virtual Arena) made me realize that there are stages we go through in this business.
However there are some core things that have happened over the years with our growth that I have divided into “Phases” of being in business as a game center owner. I thought that I would dive into each of these phases to dig out more of the problems and solutions that seem to continually come up in discussions.
The individuals who are in this first phase, which I call “The Idea” phase, drive me crazy most of the time. I am going to try and keep as many things as vague as possible to protect the identities of the individuals. However some of the situations continue to remind me how far we have come and the milestones we have hit along the way.
Usually there is a pretty good chance that the person wanting to start a game center is a gamer. In fact I can’t recall meeting a single person who was not a gamer that wanted to start a game center unless their son/nephew/brother is a gamer. The problem with that is that from what I have seen gamers make terrible businessmen.
Gamers get it in their mind that the LOVE of video games = money. This is not true. Just because players love to play does NOT mean that they will show up at a game center to pay to play. In fact the most diehard gamers usually make for terrible customers. They are always “too good” for the systems and players at a game center. My own opinion is that the diehard gamers are socially handicapped and cannot interact with other humans very well.
So these gamers decide they want to start a game center and of course they know EXACTLY what will work to make TONS of money. Here are a few of my favorite things they come up with right out of the gate:
– Big Screens for Consoles. In fact the bigger, the better they say. I have seen centers open up with all rear-projection 50” screens or ONLY projectors with big screens on the walls.
– The diehard PC guy: We will run 16-20 computers and then maybe 1 or 2 Xbox stations. I mean seriously, just buy more computers. I love it when they then say the Xbox isn’t popular and no one ever plays it. DUH!
– I have the perfect location. This is usually followed up by the “its right across the street from a big college” or “the rent is only $300/month”.
– I only need 12 stations to make a profit. This is usually followed up by a comment about how their marketing is going to be so awesome that all 12 stations will be filled up all of the time.
– Pricing. There are way too many different pricing errors made to list just a few here, but usually the best are either: Too High (ex: $10/hour), Too Low (ex: $1/hour), Bad Products (Long Passes: Month or Year)
– “I will be able to get all of my games for free”. Somehow those who are not actually in the industry yet have this idea that all gaming centers get everything for free. They just assume that since “Game Centers are so Awesome that Microsoft, Sony and Nintendo will give us everything for FREE to promote themselves”.
– Do I really need a business plan?
– I am going to go to a bank and get a commercial loan.
There are plenty more examples of bad idea in the first phase of “The Idea”. However what it all boils down to is one thing I now know:
Experience > Intelligence
I don’t care how smart you are, how many people you know, how big your checkbook is or what your background has been the fact is you will probably fail in this industry if you don’t have help to get started.
Those of us that have been open for more than 5 years have only done so because they have all of those things + luck + the ability to adapt quickly on the fly.
Most of us as independent business owners are proud individuals and it is hard for us to admit when we are wrong. That is the first thing that we have to do ESPECIALLY in an industry where there are no proven models yet. Even today the top game centers have yet to establish a long term history of profitability and expansion.
None of us have all of the answers. But learn from those who have gone before to keep from making the same mistakes.
I might actually stop answering the question from people who call me about franchising: “Why would I franchise with eBash instead of doing this myself?”
End of Original Blog
Before I post the second part of this series I will spend the next few days breaking down the 8 statements above and give more information WHY those ideas just don’t work and will push new centers to failure.