College business idea

[ryan24]

This is something I have been kicking around in my head and wanted to get some feedback on. The idea goes like this: Get a location in the heart of a college campus and create a modern arcade.

Some game stores do have a small area where you can sample games, this store would basically run with that. Students would pay to play (like 5 dollars an hour or something and semester long plans) and I would also organize tournaments and the like.

It would need to be in a compact campus where walking is the main form of getting around. Ideally this would be something student would do to past the time during the day.

I have seen game stores do this before, but I think making it the main focus and locating it on a campus would be very beneficial improvements.

Input welcome.

[cybergift]

That is a good idea, but you need a strong financial capital to make it succeed.

If you already have the capital, then go for it

[ryan24]

Thanks for the reply. I think I could make this work with not a terrible amount of capitol actually. Starting out with just the necessities might be possible in the beginning since the clients will be college kids.

I just had another idea while sitting here at work, doing this on an incredibly smaller scale. Its kind of like a street performer. Think back to high school parties, somebody would sit down at a table with a deck of cards to play a drinking game, and people would flock to it right away.

Using that principle, I could just go out to a busy downtown area, set up a game (preferably one that ends relatively quick like trivial pursuit) and charge like a buck to play a quick game.

I can imagine people walking down the block and thinking to themselves "hey I havent played that in forever, lets sit down for 5 minutes and play."

[Encrypted]

You're going to need atleast $200,000 to start something like that, if you're going to do it right. If you have a subscription type service like you are talking about. You would need to buy some type of a card or keycode in which the people swipe into each machine before play. I'm sure that type of system would cost $50,000 alone.

Edit: Oh and then the game units are like $2,000 each for ones in pretty good condition.

[ryan24]

Thank you for your input. I think it could be done far cheaper though.

I wouldnt have "arcade" games so to speak.

In the beginning I would have 3 PS3's and 3 360's, 3 wiis, and a gaming computer. I would need a good game selection. Throw in mid to upper range tv's for each one. Thats not terribly expensive.

Also, since it would be a small location in the beginning, I would come up with a cheap way to keep track of members.

[ryan24]

Is something like my idea above possible?

[jplata]

Sounds reasonable to me. Perhaps if your student union has extra units that they rent out (ours had a small computer help center, a small convenience store etc) you could partner with the university itself and get rent free for a share of the profit. This may also allow you to use your college's logos and trademarks free of cost.

Rather than swipe card system, maybe grab a guy from the compsci program at your school and talk to him about linking all the systems to some type of server that you can set a time limit for the game being played and after time expires the console will either pause or lockout the controllers or something of that sort. (way over my head, but perhaps it could be done)

I'd look into it if you have the capital to buy the consoles and everything.

[jasaunders]

Ryan, the first step is to do a feasibility analysis on this idea of yours. In its simplest form, figure out your total expenses:
rent for a few months
consoles
employees if applicable
other fees - legal, acct, insurance, supplies, infrastructure, etc...

Determine the market size for this opportunity and the potential number of customers you can support.

Determine what your customers would be willing to pay.

If you have 10 consoles open for 8 hours a day and they have a utilization rate of 50% and people will pay $5/hr to play and 2 people can play each at a time, then you're bringing in $50 an hour, or $400 a day. Take out your expenses, and does this sound reasonable?

After that you have to take it a step further and provide evidence for your assumptions and have a strategy to acquire and sustain the business you are describing.

[pboychuk]

I would just stop, first of all, i cant image how hard and expensive it would be to get a prime location on a college campus, also, college kids are frugal, we arent going to pay to play nintendo, we are going to go to a friends house, or play the one we own.
There is just no money to be made in this idea..

If you are really passionate about this idea I would suggest looking into something for younger kids, i have two little brothers and they go to places like this, although they have more than just games, i guess its like a "fun zone". also, they go to game shops that have guitar hero contests, anyways..

[ryan24]

I would just stop, first of all, i cant image how hard and expensive it would be to get a prime location on a college campus, also, college kids are frugal, we arent going to pay to play nintendo, we are going to go to a friends house, or play the one we own.
There is just no money to be made in this idea..

If you are really passionate about this idea I would suggest looking into something for younger kids, i have two little brothers and they go to places like this, although they have more than just games, i guess its like a "fun zone". also, they go to game shops that have guitar hero contests, anyways..

Incorrect.

From a Stateuniversity.com study...

"spending a fair portion of their considerable discretionary income on high-end technology"

"By the time they reach college, full-time students represent over sixty billion dollars in buying power"

The market exists, especially today since schools are becoming so gung ho about making sure kids have entertaining things to do other than drink.

Thanks to everyone for the feedback. I would have to check with the school for renting rates and what not. Even if it does not get off the ground, it is a quality learning exercise.

[ryan24]

Pboy thanks for the possible idea about the childrens place. I appreciate the feedback and that is an interesting angle to look at.

[akula]

This is something I have been kicking around in my head and wanted to get some feedback on.

well yeah sure. do what josh said.

the point is this: it's impossible for any founder to predict whether he might be able to breakeven on a venture before running out of cash and closing shop.

to mitigate this uncertainty from 100% and towards 0%, you have to undertake research...which has nothing to do with reading newspapers or eying the competition, and everything to do with hitting the pavement and asking your prospects to fill out surveys.

it's quiet simple. it's possible that what you have here is a stupid idea. it's also possible that you have a good idea. the only way to know for sure is to start trying to collect prepayments and distribution contracts. if you can't do these things, it's also possible that you may not be the right person to commercialize this opportunity.

good luck. get those surveys out. that's your first step in determining whether people need your stuff and whether you're the right dude for the job.

[akula]

Incorrect.

From a Stateuniversity.com study...

"spending a fair portion of their considerable discretionary income on high-end technology"

"By the time they reach college, full-time students represent over sixty billion dollars in buying power"

The market exists, especially today since schools are becoming so gung ho about making sure kids have entertaining things to do other than drink.

Thanks to everyone for the feedback. I would have to check with the school for renting rates and what not. Even if it does not get off the ground, it is a quality learning exercise.

no, you're wrong
the issue here is not whether there is a "market that exists"
the issue here is whether our friend has the cojonas to access and extract enough cash from his immediately accessible market, before he runs out of resources and goes bust

say for example that on fixed costs of $50k p.a. variables of $5 and clf of $20, ryan24 is gonna need to collect from appx. 3300 students to breakeven for the year. likewise, given a conversion rate of 1%, ryan24 will have to pitch around 330 thousand students to find traction. is this something that ryan24 can manage? well that's up to ryan...and that's the important question.

do i think it's possible? sure, we've already had a member start a gaming centre. from what i gather, he's doing quite well.

[HarveyJ]

There are actually coin-op attachements for most of the current consoles, so it is possible to make them pay-per-play.

You have a few issues here that I'm not sure if you've looked into though.
For starters, all those video games have that little bit at the beginning about not allowing you to have them for public display or resale play, etc.
You actually need to talk to the game distributor's about something like this and get permission or a license.

Secondly, it's going to be pretty expensive because you're going to need large TVs, plenty of them, and backups in case they fail.
You're also going to need some sound dampening between each console, because modern TVs rear project a fair bit of their bass sound to diffuse into the wall behind them. It'll cause a lot of white noise.
The TVs will also need to be Hi-Def, because it's near impossible to read the subtitles on the 360 or the Wii on a standard def TV.

Insurance costs for it are going to be astronomical.
You've got a dozen GOOD TVs just sitting there, as well as consoles, and maybe even some cash registers... in the middle of 10,000 broke, drunk and stoned college kids.
Between accidental damage from flung wiimotes and projectile kegger vomit, and actual damage from people that reckon it'll be ok to nick some of your stuff, you're looking at a really high premium.

Finally, there IS the issue of why would people come to your arcade, when someone else in the dorm is free, doesn't mind if they're drinking a beer or smoking a joint at the same time, and they can actually save their progression?
My answer to that would be because you can provide either large screens, peripherals that enhance play (i.e. lightguns), or have some sort of zany thing that they can't arrange themselves (wet tshirt Hajime no Ippo contests with inflatable boxing gloves for the Wii)