Internet Cafe Business Strategies
This is a response to Abe Olandres’ recent blog post in Yugatech entitled “Are Internet Cafes still a Good Business?”. I’ve actually experienced setting up and running an internet cafe business myself. I started a 50 unit cafe called 129 Square across Ateneo a few years ago together with some friends. We eventually sold the business due to personal conflicts but I believe that the cafe had a solid business and marketing strategy and I’d like to share it with you guys. I’d love to hear feedback from you as well since most of you are internet cafe gamers yourselves.
I find that the following factors are crucial in making sure that your cafe business will be a rousing success:
LOCATION
I agree with Yuga that this is one of the most important things to keep in mind. For cafes, it’s ideal that you find a place near a school cluster. This was a major driver in the revenues of 129 Square because we were directly in front of Ateneo. Imagine how many students go out at 4PM looking for a place to play DOTA, COD4, or their favorite online game?
DEFINE AND ADAPT YOUR BUSINESS MODEL
If you’re a gaming cafe, then you should have promotions and the technical expertise to have a gaming shop. Here’s one great example of how you can screw up a gamer’s experience in your cafe - have a couple of customers do Youtube and downloading during Ragnarok’s siege time. If your DSL line can’t handle it, chances are the gamers will have terrible latency and you’ll end up frustrating your customers.
There are several ways on how to avoid this from happening. An option would be to not allow browsing at all but that would be bad for business. They best way to handle it is you can have 2 DSL lines and have one dedicated for gaming and one for browsing. Katsudon, a former guildmate and good friend, made an instructional article on how to do this on his blog. I highly recommend that you check it out if you have time.
For promotions, you can run discounts provided that the gamer plays for an extended amount of time. This was a very popular gimick a few years ago in some small cafes. You pay 120 pesos for 10 hours of gaming.
Lastly, you can also contact game publishers like Level Up to hold events in your internet cafe. We’re more than willing to have BTAs or other activations in your game shop. That will drive traffic which means better business for you.
ANALYZE YOUR CUSTOMERS AND COMMUNITY
Like any business, you need to have a solid strategy based on your customers. What we did for 129 Square was to really make sure that the time slots are filled with different kinds of players to maximize PC usage and revenues. Here’s the best example that worked for us:
EARLY MORNING - NOON TIME: Internet Surfing, Students working on reports, PC Games (NBA, GT, etc.) & minimal gaming
AFTERNOON: Mostly LAN Games for groups - DOTA, CS, etc.
EVENING: Online Gaming, mostly Ragnarok (at that time)
At any given time of the day, we were mostly full because our location was fantastic and we really made it a point to form events and promotions that would push students to do their reports and use internet in the morning, for DOTA gamers to play in the afternoon, and for RO players to level and siege at night. With this strategy, 50 PC units, and a 25/30 PHP hourly rate, we were grossing nearly 500,000 PHP monthly.
In conclusion, I would like to believe that the internet cafe business is still going to grow in the years to come. Better PC Specs will definitely become a factor because of the new games that are coming in. Right now, there’s around 9,000-11,000 internet cafes in the country but I’m pretty sure that the number will continue to climb every year as more and more Filipinos become gamers and internet savvy.
There’s always a risk in business but if you do it right and lady luck smiles on you, money will just keep on rolling in.
March 27th, 2008 at 3:49 pm
nice wauks!!! gusto ko yan eh.. sana matuloy hehe…..
March 27th, 2008 at 4:21 pm
[...] from:Internet Cafe Business Strategies Posted in Online Business on Mar 27th, 2008, 2:26 [...]
March 27th, 2008 at 4:42 pm
Nice topic. Thanks for the post.
March 27th, 2008 at 5:21 pm
wala pa cod4 nun ah. hehe.
lalaro kme dati dun sa 129. maganda mag laro dun before since magaganda yung pc.
March 27th, 2008 at 5:37 pm
Gusto ko rin sanang pumasok sa ganyang business together with a friend of mine pag umabot na ako ng 20+.
________________________________________________________________________________
Btw, Sir Wauks pa OT ha. Regarding sa request naming mga Valkyrie players (not all but most of us) na ibalik ang Garm Card. Please pakiforward po sa RO team. :thx:
http://ragnaboards.levelupgames.ph/index.php?showtopic=87830&st=0
March 27th, 2008 at 8:18 pm
mgkano b kuryente / month 50 PC units..
March 27th, 2008 at 9:36 pm
Err, a little OT but this concerns this blog anyway. I’m having problems loading your RSS feed. I believe you’re using FeedBurner so the problems might just be on their end. Just a heads up though~
March 27th, 2008 at 10:17 pm
LoL.. COD4 just started playing it last week.. hehehe I bought it for $49.99 (T_T)
March 27th, 2008 at 10:30 pm
shagojyo, i hope you and your friend will remain friends forever, hehe…I’ve been business partners with some friends, and it did not do good on our friendship, just like what happened to Wauks.
March 27th, 2008 at 11:29 pm
Hmm, I’ve always known that it’s possible to have 2 DSL Lines but I never knew that it could be done that way. Thanks for the info Wauks, nice post.
March 28th, 2008 at 12:31 am
ako rin aspiring to have “my own” internet cafe… for the past years i learned softwares, hardwares and other things concerning building a cafe.
add ko lang:
*plus points din kung ang Owner is a Gamer ^^
*saying a simple “Thank You” after mag out ng isang customer ay may mabigat ng dateng. (i only encounter 1 shop doing this and it’s nice)
marame pa eh pero inaantok n ako.. ehehe
March 28th, 2008 at 8:34 am
Ganda ng posing nyo sa pics ah. Outreach program po ba yung setting? Saang community po kayo nagpunta?
March 28th, 2008 at 11:00 am
129 isa sa maganda comp cafe sa katipunan but now mababagal na comp nila eagle point and blueskies ang mgnda comp sshop sa katipunan hehehe
March 28th, 2008 at 4:38 pm
Dahil sa RO, nabuo ang pangarap ko n mag business ng isang malaking computer shop…. kya pag kagraduate ko at nkahanap ng trabaho at nkaipon… Try ko ang luck ko sa computer shop… Anywayz, connected nmn xa sa course q (BSIT)… Ty wauks!
March 31st, 2008 at 5:30 am
Yep… placing them near a school really works….
may isa pang magandang strategy: put up a store inside the shop para dun na rin sila bibilui ng pang-miryenda…
May 16th, 2008 at 5:28 pm
here in the philippines, put a sari-sari store- in a month, you’ll see lots of it opening around you within a few meters away from you. same goes for internet cafe business. plus there’s one i’ve observed, we “pinoy” always go for the new internet cafe that opens up and forget about the previous one/s kasi mabilis at maganda ang bago. you can’t put internet cafe like a bakery shoppe or jollibee alike where small kids go for it at all time. you’ll pay for electric bills, phone & DSL line, space you used, the PCs you got, plus IT softwares. that’s only a few to mention. plus you have to upgrade the PCs to get abreast ofthe technology. i knew for i’ve been there for 11 years. i started one 11 years ago. back then there’s no internet yet. but when internet started - mushrooming of cafe went up surge.
May 16th, 2008 at 7:17 pm
Only when you can outpace the technological obsolescence of your pc units, can you survive this industry. Because, its not enough to recover your pc units in 2-3 years time. you need another lets say 500k-1m investment after. and the cycle continues.
May 18th, 2008 at 9:50 pm
ganda po ng testimonies….s ngaun wer starting p lang po, by 6 pc’s, do we still need a so called PC licence?pls do reply sir wauks…tnx a lot
December 14th, 2008 at 5:32 am
I am interested in doing something like what you did and add food and coffe to it as well. I would like to find an invester for this. Do you have any ideas for some one living in the usa that wants to move to Iloilo city?
April 19th, 2009 at 8:36 pm
IMO, having a successful internet cafe is all about location, location, location.
I recently opened a 30 unit cafe at Anonas and it has been a gold mine for me. Though you can’t ignore the fact that less and less students play at shops nowadays due to the cheap price of PC’s. To cope with this, you got to understand what your customers want without sacrificing profit.
Wauks, i envy you when it comes to the time that you opened your shop. At your time you were able to price rates at 25/30 per hour.
I’m planning to open another shop again within this year with 30 units. This is not a faltering business if you just know what to do.