Hello Hedg3s,
Glad to see you are looking to get into the game center industry. I think your number of 95% of LAN centers flop is high, game centers have no higher fail rate than any new small business which is 64% roughly. Recently you have seen the industry have higher than previous years shrinkage, but if you trend it with over all entertainment the number match up pretty well. Recession causes contraction, so all this is showing is that an industry that was once thought to be recession proof by many in the industry is not. To us however this is the time to open a new business, if you can make it work in the hard times you will be better off when the economy make a recovery, and still have a solid plan in place that will allow you to weather any economic turmoil.
I think you are not looking hard enough if you think there is no competition in your area. Even if it is not another LAN center near you there are likely entertainment venues. Movie Theaters, Arcades/pizza places, after school programs, pools, Amusement parks. You are in competition with all of these businesses for entertainment dollar, so when you plan think of how to make your pricing and center competitive with these places as well.
1) This is a question that will probably be different for most centers, but I think you hit the nail on the head with Location, Atmosphere, and Management.
2) Cost to start up depends on the size of the center and build out requirements, centers can range from $50,000 in equipment and $20,000 build out to $125,000 in equipment and $50,000 build out. It all depends on what you’re looking to do. 6 month operating costs are going to be dependent on a couple things, biggest is rent, that will take the chunk of most centers monthly operating cost.
3) Lock-ins, birthday parties, launch events, and retail. You can pair a lot of things with a game center to generate additional income. Some centers do card games, collectables, restaurants, alcohol.
4) The minimum we recommend to support of any platform is 8. 20 stations is currently thought of as minimum standard for the industry right now.
5) No, do nothing yourself pay us.
J/K If you have the ability to do the work, do it, you are the cheapest labor you will ever have to pay for. However I will say your time is valuable, and when you start any new business you are going to be pulled in a lot of directions at once.
6) There is no requirement of education for starting a business, I have meet many business owners and their level of education ranges and most of the time does not even determine their success. Knowledge and passion for what you are doing is going to help in any area of business you go into.
I-Games is another source of information, I can tell you however their forums are dominated by California centers, and if you take this idea to them they are going to tell you something like "anything under a 100 stations is not going to be worth it". Also there is a cost to joining I-Games even if are just looking for information on if you want to get into this industry. I would recommend joining I-Games but I would hold off until you are 100% that you are doing this, 100% means funding is secured, otherwise you could end up spending money that will give you no return.
Keep asking questions, keep bouncing ideas off of people, refine and redefine your idea for a game center.
