Starting and Running a Video Game Center Lounge: Do I need Cafe Software and How Do I get Tournaments Going?

From today’s show we covered the following topics:

  1. Introduction to the weekly Twitch-cast
  2. LAN Center start-up “Question of the Week”
    1. “How important is software for a LAN Center?”
    2. How important is software in other businesses?  Stock Control?  Sales projections?  Employee management?
    3. Software is crucial for controlling PC access, but also for saving $$$ in game purchases
    4. Even as a timer, software helps track time balances as well as cash balances
    5. Credit on store accounts is CRUCIAL
    6. Useful data such as games reaching license limit, times of the day/week when it is slowest, etc.
    7. Using the right software, eBash has set-up a 100+ network of systems in two days, had 5,000+ gamers create accounts and play by the hour and tracked stats and given away random prizes, sent out a follow-up email to the group
  3. LAN Center growth “Idea of the Week”
    1. “How do I get tournaments going at my center?”
    2. Tournament Negatives:
      1. Nothing worse than spending tons of time, money, energy promoting an event to only have a couple people show up
      2. Displaces regular customers during busiest times
      3. Extra Work, Extra Cost, Extra Systems
    3. Tournament Positives:
      1. Great way to reach new players
      2. Gives your center the sense of importance, coolness
      3. Always want to have something going on, events
    4. Types of Tournaments:
      1. Big Cash Money
      2. Random/Scrambled
      3. Money vs. Prizes vs. Fame (Call of Duty players asked about trophies)
      4. Not always PvP, sometimes PvE
      5. Find a way to create rivalries with schools, clans, etc.
    5. Promotion = success
      1. “Impromptu” tournaments have a place, but not a good idea for long term
      2. Start it a month away or more
      3. Fliers:  Colleges, High Schools, Local Game Stores
    6. Results
      1. Ladders, leaderboards, presetige
      2. Photos and social media
  4. ggCircuit PULSE:
    1. Halo API notes
    2. Skin Release Schedule
    3. Tournament system Updates
      1. Brackets can be for just Players  now, not just teams
      2. Admin can automatically add players
      3. Types:  PC, Xbox One, Playstation 4, Wii U
    4. Extra Life
    5. WANdemonium
  5. ggCircuit “Tip of the Week”
    1. Winter Season Details
  6. ggCircuit Center Spotlight – Escape Gaming
  7. Welcome to new ggCircuit centers
    1. FunFirst Gaming – Czech
  8. Ending – ggCircuit now over 70,000 gamers

Starting and Running a Video Game LAN Center Lounge: What Other Products Can we Offer and the Importance of Keeping it Fresh

Here is the latest video from our weekly Twitchcast.  This week we cover:

– Besides consoles and PCs, what other entertainment products can a center offer?
– The importance of keeping things new and fresh in existing centers.
– The core of ggCircuit, together we are greater than the sum of our parts.
– Linking game accounts in ggCircuit
– Center Spotlight:  OverZone Extreme LAN House from Brazil, South America
– ggCircuit Fall 2015 season recap
– Grand Prize drawing winner!

Video Game LAN Center Video Including How to Manage Consoles like Xbox and Playstation and more….

This week’s video includes the following highlights:

  1. LAN Center start-up Question of the Week – “How do you manage consoles and console games (Xbox One, PS4, Wii U) in a center?”
  2. LAN Center growth Idea of the Week – “Bring in new customers and support the community with fundraisers.”
  3. ggCircuit PULSE:
    1. Center subscriptions
    2. Fall Season Recap
    3. Winter Season Preview, November 30th – February 8th
    4. ggCircuit Leagues
  4. ggCircuit “Tip of the Week” – Local Prize Vaults
  5. ggCircuit Player Spotlight – Derrick_Shaver
  6. Welcome to new ggCircuit centers – Monkey Gaming Center – Arequipa, Peru
  7. ggCircuit Fall Season week 5 winners

Week 5
Total: 306,379
Razer Chroma Keyboard – Raven (Galaxy Gaming) – 820
Razer Kraken Headset – lemboplanb (Elite Sevilla) – 289

Video Game LAN Center Video Including: How much space do I need and what is a good layout for my store?

Here is this week’s video for new and existing LAN centers.  The topics of discussion this week include:

  1. Introduction to the weekly Twitch-cast
  2. LAN Center start-up Question of the Week – “How much space do I need and what is a good layout for my store?”
  3. LAN Center growth Idea of the Week – “Why do players come to your center?”
  4. ggCircuit PULSE:
    1. Sneak peak of the skin (mockup)
      1. Logged out view
      2. Logged in view
    2. New Auto-Create online accounts for Centers, both batch process and auto-process for new users
    3. Bronze, Silver, Gold levels
    4. Weekly Tournaments
  5. ggCircuit “Tip of the Week”
  6. Welcome to new ggCircuit centers
    1. FastNet Lima, Peru
    2. Rails Billiards – Dubai, UAE
  7. ggCircuit Fall Season week 4 winners

Week 4
Total Entries: 273278
Razer Chroma Keyboard – The Gamerz Funk, Jormy (562 entries)
Razer Kraken Headset – GUF Werribee, LukeCan (415 entries)


How much money does it take to start a Video Game LAN Center or Cyber Cafe?

Hopefully this is the first of weekly show we plan on doing each week that will help me help you.  What I mean by that is the number of questions I am getting each week is really increasing and this is a way for me to spend an hour to hopefully help many of you at one time.

This week’s outline:

  1. Introduction to the weekly Twitch-cast
  2. LAN Center start-up “Question of the Week” – “How much money does it take to start a LAN center?”
  3. LAN Center growth “Idea of the Week” – “We had a slow month in September, now we are just waiting for things to pick back up.”
  4. ggCircuit PULSE:
    1. Gold Memberships / Prizes
    2. Smartlaunch ggCircuit skin
    3. CS GO
    4. NVIDIA events
    5. Halo 5 API announced
    6. Sneak peek of new website mock-up?
  5. ggCircuit “Tip of the Week” – ggCircuit Stages of a Center – 85 centers in the system
    1. Registration, Email Sent to Create Password – 72
    2. Download and install ggCircuit Client – 62
    3. Earned Coins – 62
    4. Start Slider – 23
    5. Set-up Kiosk – 4
    6. Facebook Tab – 4
    7. Website Widget – 5
    8. Add Local Prizes – 30
    9. Redeem Local Prizes (min just 1 per week) – 14
  6. Welcome to new ggCircuit centers
    1. Hajwala Games, Abu Dhabi, UAE
    2. Game City, Malmo Sweden
    3. The Grid, Chino Hills, CA
    4. Game On LAN, Buffalo, NY
    5. Section 9 Cyber Cafe, Fargo, ND
  7. ggCircuit Fall Season first half winners

Starting a Video Game LAN Center – How many and what type of systems should you offer?

A variety of systems is good, but only having a couple will make them not as attractive for group gaming or team events.

A variety of systems is good, but only having a couple will make them not as attractive for group gaming or team events.

I am going to try and post a few quick blogs each week answering some of the repeated questions that I get from potential new LAN center owners.  I really try to not be rude, but I am sometimes blunt when giving advice to people that I can tell are not anywhere close to being ready to open a store.  However answering the same questions many times over-and-over becomes a bit tiring.

Here are the things I have observed over the years at our stores and watching other centers open-and-close around the world.   I attribute these stores closing to poor decisions in many areas, but one of the biggest mistakes is choosing the wrong number of systems and wrong set-up around those systems.

Recently I was contacted by someone wanting to open a store with 6 PC, 6 Xbox and 6 Playstation systems.  This is very wrong on many different levels:

– Any kind of event you want to run usually consists of two teams playing each other.  Standard teams for PC games are usually 5 players.  Standard teams for most console games are 4 players.
– LAN Centers are like movie theaters, we do 90% of our business on the weekend.  You have to be able to hold enough paying customers on the weekend to pay your expenses for the month.  That means if your expenses are $10k per month you need to make $2500 each weekend, or $1k on Friday, $1k on Saturday and $500 on Sunday.  Can you make $1k on a Friday with only 20 systems in your store?  Most of us charge around $20-$25 for a day pass.  20 customers paying $20 each for a day pass fills up a store with 20 systems and is only $400 in revenue.
– First time players usually come in groups and want to play the same thing.  If you have 4 Xbox One stations and there is a couple guys playing what happens when 4 friends walk in and want to play Call of Duty together on the Xbox One?  They probably leave and maybe will not come back because they know your place is too small.
– Many games are the same on different systems, you don’t want to buy 2-3 full game libraries for all of the systems.  In the past at our stores we focus on the Xbox for console games and have a small amount of Playstation systems for their exclusive titles only.  Now we are looking at doing mostly Playstation 4 at a new location because Call of Duty eSports will be on PS4 in 2016.

Number of Systems Guidelines
Here are the guidelines I share when someone asks me for my advice on the type and number of systems:
– No matter how big your city/town is, you need to try to start with at least 40 stations.  That way on busy weekends you can break that $1k/day goal in sales
– If you cannot purchase at least 16 of the same console (Xbox or PS4) then just pick one of them and only get a couple of the other for exclusive games.
– Set-up systems in multiples of team sizes for events.  That means 20, 30 or 40 PCs (4 teams, 6 teams or 8 teams of 5 players each).  For consoles shoot for 16, 24 or 32 systems (same number of teams, just 4 players each team)

Equipment Specs and Space
– At our stores we shoot for 36 inches of counter space per player.  That is 4 players per twelve feet.
– Purchase 24″ monitors with built-in sound for ALL stations.  This means PC and console.  No, no, no, no you do not need 200 inch screens for console players.  They are not coming to your store to play on a BIG screen, they are coming to play as close as they can to their friend’s screen.  If every station in the store has the same monitors then moving things around for events is much easier.  Also it makes it easy to have 1-2 spares available (we use the same monitors at our admin stations as well.  *****(Exception)**** The exception for the screens is the Wii U.  We usually have 2-4 stations for Wii U that are on larger screens like 55″ or so and couches.  We also sometimes put a couple of the other consoles on those for unique single player games and for streaming.
– Mount the systems above the players on a shelf, this saves a lot of counter space and floor space.

Here is a mock-up of our Terre Haute store drawing showing how we fit so many stations into 4000 square feet.  We sometimes have 100-125 gamers at our building for special events.

2303 Building Drawing 1-14-2013-page-001

eBash’s 4000 square foot Terre Haute location.

One thing to keep in mind is that I do not recall ever hearing a LAN center say that they wish their store wasn’t so big.  They ALWAYS wish they had more space or more systems.  When you cannot hold enough people on the weekend and you watch those $20 bills walk right back out the door you will find out the hard way.

That being said my biggest advice is to not open a center if you cannot build it big enough to start.   It is false to think that you can add more systems later as it grows.  It will never “grow” if it doesn’t have room to grow.  You will just throw away your money.  If you want to be in this business do it right from the beginning.  Don’t just “test” the market out by starting small.  It will never work.

Email Bag – My Video Game LAN Center has been open a few months, how do I increase business?

I had an email from a newer center that is struggling to get over that first hump.  Here is some things I sent back to him and suggested from what has worked at eBash in the past:


Keep in mind that a LOT of success in this business (and most businesses) is surviving through the first two years.  It is a marathon, not a sprint.
When we opened 10 years ago, we attracted players because we had faster computers, faster internet, etc.  Then when HD came out in 2006-7 we got 32″ flat screens ($800 back then!) and players came because we had Xbox 360 and PS3 with HD.  Now that stuff is way cheaper and players have it at home.
So we have really focused on making sure we do a LOT of special events.  Not tournaments only, many players are “arm chair warriors” and don’t want to compete seriously.  Here are some of the things that are really big for us:
  • Birthday Parties – These really grow over time as more kids get invited they want to hold their party at the store
  • Lock-ins – We started doing one per month… then we started doing two per month… then finally we figured out that doing them every weekend was best because gamers and parents didn’t have to remember WHEN we were having them.  We went from having 20-30 players at one lock-in per month to 80-90 players every Friday night and 40-50 players every Saturday night.
  • Tournaments – We try to do serious ones that cost big $$ to join with big $$ prizes but we also do free events for fun prizes like game time and snacks.
For marketing, here are some things that have worked well for us:
  • Thursdays each week is Church Youth Night.  We let middle school and high school students with a bulletin/program from their church that week play for free from 4 PM until 10 PM.
  • We made business cards that give a person a free hour, printed like 5000 of them and took stacks to all of the local schools, elementary, middle and high schools.  We give each one around 50 or 100 cards and tell them to use them for rewards for attendance, grades or anything they want.  You can also give these out to anyone at the store anytime.  Drive around to local businesses and invite them, their kids, their friends to come by with those cards.
  • Get some press coverage.  Write up your own press release and email it to all of the local newspapers and televisions.  I am surprised when we do this how many times at least a few of them pick up the story and just put it on their website exactly as I wrote it. Write it from an outside perspective and put quotes from yourself in there.  I attached an example of one I recently wrote and sent out, feel free to use that template to write your own.
  • Dedicate a day/night each weekday to a couple of games.  That way players who like Call of Duty know when to come to meet other Call of Duty players.  You can even make it a discount to play ONLY that game ONLY on that day.  Easy way to make a cheaper product without lowering your main prices.
I hope some of those ideas can help!  It is all about making it through the first couple of years.  The ones that make it are the ones that never stop pushing their business.  The ones that fail usually are excited and work hard the first couple of months but then just get lazy and sit around.

Why are you in the Video Game LAN Center business?

QandAAs always the inquiries come in from many different places around the world for starting a LAN center.  Sometimes existing centers write to talk about closing their business, expanding it or even selling it.  All of those questions came to me today in an email from a center owner who has been around 10 years and is trying to decide if they should sell to an interested buyer.

I thought it would be a nice idea to share my thoughts on just why it is that we are all in the video game LAN center business.  I had a good friend years ago that told me over-and-over the reason a person should own a business is to someday sell the business.

Here is a list of questions that were posed to me by this owner about the future of our industry and my thoughts on if he should sell or keep running his business.

(Note:  These questions come from a center in another country, so I am answering these with my best knowledge of running a LAN center here in the US)

1. Now a days people started to play games in laptops, moreover college events are running gaming tournament in laptops connected through WiFi networking. Will portable device or laptop can kill the lancenter ?  
To me the future of gaming is perhaps coming in the form of VR devices and other technology even beyond portable devices.  However I have noticed that even games on a mobile phone are more fun when playing with people from our LAN center.  I don’t think that the type of game or the device they are played on will ever change the overall desire for humans to find and interact with other humans interested in something similar.  Gamers that met at eBash 10 years ago who would have never even crossed paths became great friends which started with a common love of gaming.
2. How do you see the evaluation of LAN game center in future ? Will it exist in tomorrows technology? I can see some answers in igames forum but I am not convinced with that answers, may be partially……let me know your views
I can say this right now with the amazing strides we are making with ggCircuit AND with the added resurgence of potential new owners asking me for advice that 2015 is the year LAN centers will finally become relevant for gaming.  We have missed out for years because the technology didn’t exist, the games didn’t exist and the owners were all too independent.  Already this year I have hosted 3 potential new owners physically at my store and consulted with them about starting their own center.  I have not physically consulted with a potential new owner in about 3 years.
3. I can see game developers & publishers not supporting Video Game Center….is it correct?
This is actually changing right now with ggCircuit.  Now when I call developers and publishers representing 28 locations around the world and over 10,000 active gamers they are starting to support us.  They do not have to try and ship out products to 28 locations, they can make a deal and ship to ggCircuit who then gives them the exposure at all of the locations.  Even after 10 years at eBash we have had 25,000+ gamers in our system and they did not care about talking to us.  We were just in one state of the US.  Now we have centers together in North America, Europe, Middle East and Australia with talks in the Far East and also South America.
4. What happens to our field if everyone easily connected through wifi internet & have portable gaming device or portable computers ? 
I think we have to adapt as gaming adapts.  If the gaming industry moves to different platforms, we have to move to different platforms.  As much as I dislike maintaining consoles like the Xbox One or Playstation 4, I think they are necessary for eBash to have available to our gamers.  As they grow up, most of them move toward the PC.
5. Do you think am I pessimist to run the show?
Honestly I didn’t understand this question.  I think the translation from the native language was lost here.  Google Translate you failed me!  I believe that in his decision on whether to keep the LAN center going himself or to sell it he feels he is being negative about the industry.  I don’t think at all it is a problem to be realistic and search through every possible scenario when owning a business.  If you don’t prepare for the worst then you might not be prepared at all.
6. Will ggcircuit save us? i am serious in this because I can see the potential & scope…let me know your views. 
Obviously I am very biased towards saying yes to this question.  However I think that the fact is unless either one single company is able to open 100 stores OR something like ggCircuit unites the LAN industry then we will just continue to all struggle on our own.  Not only because of sponsorship opportunities, but because finally we are giving gamers a reason to play at a LAN center instead of the age old response of “because playing together is more social”.  Now, we give gamers an experience they cannot get anywhere else.
7. Can I have ggciruit in my centers from India?
Yes, of course!  We are already setting up centers in India currently! 🙂
8. Are you interested to hire any skilled developers for ggcircuit from India? because less expense for professional developers compared to your country ….I am interested in this (I earlier had this vision but never took a single step to execute it), at the end of the day cyber cafe programs wins & I am impressed with your works….I thought of some kind of contribution to the man who fights for our benefits.
We are hoping that many centers not only join us by putting ggCircuit in their center but we can use all kinds of help from centers with all types of skills.  Some centers are working on contacts with sponsors they know.  Most of them provide us all sorts of ideas and comments as we release new features.  The next big phase for us is deciding if we are going to support different cafe software packages or if we are going to create easy conversion tools for moving to use Smartlaunch.  Perhaps the conversion tools would be the best place for those with coding skills to jump in and help?
9.Are you running only ebash or you are running other couple of business ? if yes please let me know others……………..please don’t mean me interfering personally because I am seeing you as my role model in this field, so I would like to know how do you manage everything financially apart from micromanagement.
This has been heavy on my mind lately.  I worry that we do too many things good and not any single thing GREAT.  My problem is that I do not ever tell people “no”.  My background was starting a software company business websites in .ASP and .Net, followed by building my own Internet Service Provider (ISP).  Currently we still consult and work on some websites, build some apps, set-up mobile racing simulators, build gaming zones for conventions, run summer camps for kids and probably other things I am not thinking about currently.
The problem is that I need to just focus on one core business.  If I can start saying “no” to some of these items then I can start doing other things better.  I want to be great, not just good.
10. Have you ever felt from quitting this business at least once from the day one ? 
Many, many times.  Probably once a week since I graduated college in 1998 and started my first company.  I think the struggle for small business owners is very real.  There is always the thought in my mind that I am very marketable and would easily make great money working for a larger company and not have to worry about anything.  But I always come back to how happy I am being able to make my own decisions every single second of every single day.  My mistakes are my own fault, my success is a result of my own actions.  I can always live with that even when things are tough.
11. Have you felt negative about this business at least once from the day one ? 
Yes, for sure.  The LAN center industry is filled with owners who are gamers first, business people second.  That is why we have never really found a way to grow.  If a person likes cars, they can be a very successful car dealer, mechanic or salesman.  You can’t consume your time with a car.  But gaming consumes people.  They start making excuses and taking shortcuts.  First it is deciding to play games at the front counter.  Then they start letting their friends play for free so they have someone to play with.  Next thing you know they are going out of business because they didn’t pay attention to running the store.
The other big frustration from me has always been that the industry has never really grown as a group.  Too many centers go out of business and run out of energy to keep going.  We have never been able to have one voice to represent us and get games that are easier to run, deals that are exclusive or bulk buying discounts.
12. How do you still manage your negative thought & keep motivated even though if you see some dark side of our business even in terms of finance? 
The GOOD side of the fact that games can consume people is that for our customers this can mean more revenue for us.  It is bad for a LAN center owner to play games all of the time, but it is good for the customers to play games all of the time in our stores.  I have always held onto hope for our industry because I know that society is moving towards being 100% digital.  Just like the movie Wall-E from Disney, I think people will eventually just sit in front of a screen most of the time.  I just hope that LAN centers can get them out of their houses every now-and-then.
13. What about your family are they co-operative with your business? sorry for asking this because I can see few quite from this business because their family is not supporting …………I felt my family is exception to run this show till now.
My wife has always been 100% behind everything I have done.   We will celebrate 19 years of marriage in August of this year and we love the place we are at with the business.  The future is looking brighter and we are going to be so strong because of the hard times we have experienced in this business and others that I have ran in the past.  There is no question that if you don’t have the support of your family then you should not be in this business, nor any other small business.
14. Your advice/suggestion  for me to take the decision? whether to sell or expand? 
Right now, with what I am seeing, my advice would be to expand.  However that comes with a huge *BUT* next to it.  But the right investment partner is nearly impossible to find.  I have started many businesses in my life.  Some of sold, some of have failed and others are still yet to be seen.  For every great partner or investor I have had 5 that are not very great.


Email Bag #1 – Answering Start-up Questions

mailboxWhen I answer emails for those thinking about starting a Video Game LAN Center this is a way I can archive them and try to help answer questions for others without saying the same things each time.  Here is a list of questions asked from me this week with my answers.

What financial problems did you meet while starting out the business that you didn’t plan on accounting for?
What problems do all businesses face when starting up?  We were under-capitalized, naive, young, unprepared and we didn’t have control over what the economy was going to do in 2007-2008.  The biggest thing that we still face is the ability to sock away funds for the next upgrade, which in this business happens very regularly.  The one thing we did right (by accident) when we started was leasing our computers.  That isn’t easy to do today, but by leasing them we paid for them very quickly, sold them while they were still valuable, and then started a new lease.  This kept our technology up-to-date AND gave us all kinds of fun and excitement at the store.  We don’t do that now, but perhaps we should go back and look at it again.

What size of venue would be ideal for an average center? (Looking at 30 PC’s, consoles, tournament area, lounge, snack bar, etc).
Well, I still stand by my strong opinion that building a LAN Center with just what you can afford to start is a bad idea.  If you start too small then you are destined to fail.  I love to compare us to movie theaters.  Why do they build 8, 10, 12 and 20 screen theater complexes?  You show up on a random Tuesday and you can have a theater all to yourself.  However on opening weekend for major releases those 200+ rooms are sold out.  You make all of your money during your busiest times.

Do you see that running a gaming center profitable?
No.  Honestly still after 10 years we are not “profitable”.  Do I get paid to do this? Yes.  Do we pay the bills for running it? Yes.  But is it profitable as a business with standard accounting principles?  Heck no, not even close.  In our case we have had some investors through the years that have come in and tried some things that have opened doors that they are not benefiting from today.  This industry is still infant, but the winds are changing…..

When you started out, did you start too big or too small?
By complete accident we started about just right.  We had 14 computers and 18 Xbox stations in our first store.  Within 3 months we added 8 more computers.  18 months after we opened using about 2000 sq. ft. we renovated a building and moved into 4000 sq. ft.  Everything was stressful and hard our first 2 years but it all worked out for a purpose in the end.

What did finding the right location do for you? What made it the right location?
This is actually something that is very black and white for me.  We started in a warehouse about 200 yards off the busiest road in our little city.  That store did about $7k per month in sales the first year.  When we moved, we moved from 2115 S. 3rd to 2303 S. 3rd which is actually less than a block.  However the new building was very close to the same road (55,000 cars per day).  Our sales the FIRST month we moved went up $5k/month.  Our increased rent was only $2k/month.  You get what you pay for.  Real estate is generally priced for the exposure and traffic you will receive.

How long did it take for your business to get out of the negative and start profiting?
We are just turning 10 years old.  Hopefully I will be able to say that in our 11th year we started showing a profit. 🙂