Now Serving Counter-Strike With Coffee

The Internet café, serving drinks and shooting games, is becoming very popular. But will running one help strengthen the brand recognition of your ISP, or merely attract unwelcome attention from the police and from high school truants?

[March 7, 2002]

On the ISP-Investor list in February, TB asked,

"I'm considering opening an Internet café in conjunction with my ISP: is it worth doing?"

A number of respondents suggested that, with the right business model, it could be very worthwhile:

[BB observed] "They make a healthy profit here in Bulgaria, and they're popular in Europe as a whole. One of the best ideas is the 'all-nighter' rate, which is late-night surfing all night for the price of two hours. Most of these places are only computer clubs, with no coffee or beverages except some vending machines, but they do a brisk business. The only problem is that they need to start with at least 30 PCs to make a profit. The business model here shows that a club with 30 computers has to have an average of 7 hours uptime per computer per 24 hours to break even."

[JN added] "The Internet is often a good addition to a 'pseudo-geek-chic' atmosphere. It's a club or restaurant model: the Internet has to be a feature of the theme. The problem I see is that most Internet cafés are launched in metro areas where there are a ton of places for entertainment, as well as broadband in homes. You would have more success if you had T1 speed where most homes have 33.6 Kbps. Other successful cafés I've seen are international hangouts for travelers needing a place to catch up and communicate."

Others noted that gaming is usually the central attraction:

[BB advised] "Most of these cafés also provide online games like WarCraft, Diablo, etc., which are a real attraction. If set up properly, they can be interconnected so players can shoot against each other in virtual space."

[DI agreed] "Most of the cafés I've seen that were profitable were the ones that offer gaming. People sit there for hours on end playing Counter-Strike or some other game. Very few read e-mail or surf the Web. And it's difficult to open those types of cafés anywhere: the local law enforcement might consider it a game room and forbid it to maintain 24/7 operation."

[BG added] "We have a location here in Ireland that has 24 machines full every night. People pay 10 Euro to play games from midnight to 8 am, every night of the week (reservations required!) and that's the off-hour traffic."

[JN pined] "I'd love to start a high-end gaming parlor, but the financial investment is unlikely to pay out: high-end gamers prefer huge monitors and the latest PCs, at a minimum of $3000 per seat. Still, with a beer license, it might pay off: I like the idea of a bunch of drunk guys playing Quake at 2 AM…"

Still others observed that Internet cafés can have multiple uses:

[BB offered] "As an ISP, we have a café which acts as 24/7 customer support center, showroom, and training center."

[JN agreed] "If you have an ISP, such a facility really makes sense. It's a great way to introduce 'newbies' to the Internet as a whole, and to generate hype for your service. It's also a great way to pay for a training facility in off-peak time. I'd definitely do such a thing if I still offered dialup."

And others recommended doing research before making an investment in such an operation:

[AL noted] "I think there are better opportunities out there for you to invest your time and resources into. However, you should take the time to explore the concept with your target customers. Create a market research survey and ask 50 or 100 of your target customers (not just your friends) if they would frequent your Internet café. More importantly, you need to identify why they would, and what they would be willing to spend."

[EL agreed] "I would also stand where I thought the location should be, and ask the people walking by."

[SM added] "According to www.cybercafe.com, there are 474 cyber cafés in the United States. The cafés all have listings that include e-mail addresses for owners: contact them, and ask about their operations."

—End