Business Case for a PS3 Cafe

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spaulose

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Team,

I have been playing with the idea of starting a gaming cafe in Mumbai. And I am not been able to come up with a meaningful ROI (Retun of Investment) model for the same.

Just to put across my dilemma:

Initial CAPEX for

a) 10 PS3's with accessories = 400000
b) 10 32" LCD TV's = 400000
c) Cafe Interiors = 500000
d) Other Expenses (shop deposit etc) = 300000

Total Capex = 1600000

With such a high capex I am wondering how would I realize ROI.

Even if the above stuff's are loaned then my loan emi would be around 40000 to 45000 (atleast) per month.

If I add rent and other expenses (salary for staff) per month, then that would amount to another 30000.

EMI = 45000
Other running expense = 30000

Total running expense per month = 75000/-
Can one earn more than 75000/- pm from 10 PS3's? :S
 
^ err are to plan to starting u own gaming cafe business at least

depend one one hour for ps3 will cost 60-100 rupess

and membership 500-1000 buck reduce 30-40 rupess i guess

if u have proper square upto 1000-2000 feet and good hall with a/c and nice look like Europe style

p.s u cannot earn 75k per months

only 10-30 k depend for u staff salary and maintenance investment for rent
 
In Mumbai, unless its your own place, the rent expenses will eat you up. Dont think its makes sense..
 
I would say don't take 10 ps3 in one shot....
Buy 2 and look how is Business is going..
By way here in Dombivli one of my frds cafe is running 2 ps3 with 25/ per hour [Per head based ]
He getting around rs/500-600 business daily...
 
firstly the idea is not very feasable, even if you want to pursue it forward, i would suggest you revisit the captial expenditure numbers.

instead of 32" LCD TV's, you can opt for 22/24" LCD monitors, that would cut down your cost by more than half. Also bigger screen would need larger viewing distance which means more real estate space. so stick around to 22/24" monitors.

secondly what have you planned by allocating 5lacs for interiors? keep it to bare minimum. monitors/TV can be wall mounted and the PS3 dont need much space. so all you need is a flat table (alike cyber cafe) and chairs. cost - 1-1.5 lacs

other expenses? i cant figure out much, but 3lacs? i believe about 1 lacs (or more depending on the locality) or about 3 months of rent is set as deposit amount. so it shouldn't come to 3lacs.

coming to PS3's (4 lacs capex) - 10 PS3's would cost you <2lacs and since you would be buying in cost the cost would come down even further.

and i assume for 10 ps3 you would buy 10 game titles each, assuming each costs rs 2000 on average it comes to 10ps3 * 10 games* 2000 = 2lacs.

u can bring down this number drasticallt by switching to xbox and *ahem* it to cut down the cost of games. but then some games are exclusive to PS3.

but i wouldn't recommend this business idea, unless u have an extra shop/space and a relative/retired person to sit and take care of it for free or least salary so as to generate extra income from this. but it cannot be usedas a source of your primary income. hope this helps.
 
Dont make it a PS3 exclusive gaming cafe. Get some PCs assembled with decent configs so that titles not exclusive to PS3 cold be played. That's a decent investment but no clue about the rent expenses in Mumbai.

You dont need 32inchers for the PCs either. As for the 32inchers, get those Panasonic LX80s under bargain. You could source it for under 30k per LCD. Full-HD is not a requirement per se as most titles ported for the PS3 haven't gone full-HD yet.

As for the PCs, 19inchers should be fair enough. Pair them up with decent mid-end cards like the 9800GT/4850s and grab some good titles apart from the usual MP ones.

Just my 2 cents.
 
Have you considered all the costs?

I think 30,000 running cost may be a bit low if you include rent and salaries in it. (This is of course based on location.)

Electricity costs (at commercial rates) for 10 PS3s and air conditioning will be fairly large.

Maintenance costs for 10 PS3s and 10 Monitors/TVs will also need to be considered. (And other equipment in the shop as well.) So maybe another 5k on an average?

Plus the cost of new games that come out. (You will need up to date games to keep getting customers.)

Now for the income. (This is pure speculation of course, you'll need to put some proper research into this)

20 Weekdays in a month and 10 holidays. (weekends + maybe 2 holidays)

Lets take 3 hours per day on weekdays and 8 hours per day on holidays when all 10 ps3s are fully utilised.

(maybe 2-3 machines are utilised on week day afternoons. 7-8 in the evening. This is my guesstimate.)

Even assuming 2 players per PS3 and 25rs per head,

that is

(10 x 50) x ((3 x 20) + (8 x 10)) = 70,000.
 
I really have no clue abt the gaming scene right now & the craze etc for pc & ps3 gaming.

But if the gaming scene is decent & you get a good location for your cafe you can easily earn upwards of 75,000 if run properly (with 10ps3's or 10-14pcs). This is coming from my experience.

Also forget about 1000-2000 sq feet on rent. in mumbai it will cost you over 1L in rent in any good location. think of something smaller which can be easier to sustain & then expand accordingly.

hope that helps

Aces170 said:
In Mumbai, unless its your own place, the rent expenses will eat you up. Dont think its makes sense..
Click to expand...

even if you own the place, you will definitly calculate the rent of the place even if you use it for yourself. cause if u dont earn that much then you would rather lease it to someone else rather than go through the trouble of running a cafe.
 
gaganjain said:
I would say don't take 10 ps3 in one shot....
Buy 2 and look how is Business is going..
By way here in Dombivli one of my frds cafe is running 2 ps3 with 25/ per hour [Per head based ]
He getting around rs/500-600 business daily...
Click to expand...

Thats good to know but it looks like there are a lot of PS3 enthusiasts in Dombivili then.

At 25 /- per hour for 2 PS3's to generate 500/- per day; they should have 10 hours occupancy on each PS3.

But if we look at it in a different way, he just needs 20 customers everyday to reach that figure :-) .. Seems Possible doesn't it? :-)
 
stormblast said:
I really have no clue abt the gaming scene right now & the craze etc for pc & ps3 gaming.

But if the gaming scene is decent & you get a good location for your cafe you can easily earn upwards of 75,000 if run properly (with 10ps3's or 10-14pcs). This is coming from my experience.

Also forget about 1000-2000 sq feet on rent. in mumbai it will cost you over 1L in rent in any good location. think of something smaller which can be easier to sustain & then expand accordingly.

hope that helps
even if you own the place, you will definitly calculate the rent of the place even if you use it for yourself. cause if u dont earn that much then you would rather lease it to someone else rather than go through the trouble of running a cafe.
Click to expand...

Thats encouraging. You are right a bigger area means bigger rent. But I think a fairly decent space of 400-500sqft can house those many consoles and also a small coffee snacks table. I am also intending to get a space with an inbuilt toilet :-) (giving them no reason to get out :ohyeah:)

If not 10 PS3's, a realistic figure would be 4 PS3's with bean bags and a Wii would also add variety.

I think the difficult part is to mak them keep coming back. And for that the place should be easily accessible, cozy and self sufficient.

With the replies I understand that just the consoles wouldnt bring in the moolah. Its the extra services that can add to the revenue.

By the way, just to clarify, there is no need for a license from Sony to run a PS3 gaming cafe right?
 
You can't earn more than 75k/month.. In any way it's not possible..

Think about something less..

Get 2-3 PS3's instead of 10 at one shot, start with some PCs then :)

instead of 32" LCD TV's, you can go with 2x" series Full HD LCD TV's, it will reduce lots of budget..

In case of interiors.. Now days, building is itself has very good interior so spend less on that..

To get good amount of customers, arrange some kind of tournaments blah blah ;) attractive offers are also welcomed :)
 
whatsinaname said:
Have you considered all the costs?

Now for the income. (This is pure speculation of course, you'll need to put some proper research into this)

20 Weekdays in a month and 10 holidays. (weekends + maybe 2 holidays)

Lets take 3 hours per day on weekdays and 8 hours per day on holidays when all 10 ps3s are fully utilised.

(maybe 2-3 machines are utilised on week day afternoons. 7-8 in the evening. This is my guesstimate.)

Even assuming 2 players per PS3 and 25rs per head,
that is
(10 x 50) x ((3 x 20) + (8 x 10)) = 70,000.
Click to expand...

Weekdays :

Afternoon 2 hours on 2-3 machines = 3 x 2 x 25 = 150/-
Evening 2 hours on 7-8 machines = 7 x 2 x 25 = 350 /-

Weekday revenue = 500

Monthly Weekday revenue = 500 x 20 = 10000 / -

Weekends :

Weekend Revenue = 8 (hours) x 2 (PS3's) x 10 (days) x 25 = 4000

Total Revenue = 10000 + 4000 = 14000/-

This is being conserative. Even optimistically it wont have a 100% variance. That is it wouldnt go above 30000/- , i think.:huh:
 
Are you planning to get the Internet facility to let these games go online? The interest for online gaming has significantly risen, so it makes more sense to take them online, example Killzone 2. I have heard it has fantastic multiplayer.

Also why not add a few Xbox 360(s)?
 
Ethan_Hunt said:
Are you planning to get the Internet facility to let these games go online? The interest for online gaming has significantly risen, so it makes more sense to take them online, example Killzone 2. I have heard it has fantastic multiplayer.

Also why not add a few Xbox 360(s)?
Click to expand...
That's a good suggestion, but i think one should guage the audience first and then take an informed decision. That's more because I would have to go for an Internet connection which would at least cost me 1000/- pm as rental.
 
Gannu said:
Dont make it a PS3 exclusive gaming cafe. Get some PCs assembled with decent configs so that titles not exclusive to PS3 cold be played. That's a decent investment but no clue about the rent expenses in Mumbai.

You dont need 32inchers for the PCs either. As for the 32inchers, get those Panasonic LX80s under bargain. You could source it for under 30k per LCD. Full-HD is not a requirement per se as most titles ported for the PS3 haven't gone full-HD yet.

As for the PCs, 19inchers should be fair enough. Pair them up with decent mid-end cards like the 9800GT/4850s and grab some good titles apart from the usual MP ones.

Just my 2 cents.
Click to expand...

Excellent idea :- PC is also modded as per gaming Modd , i just added this picture for ur reference - which is PC is modded in to game

PS3 games are so high price u have spend on them , PC will be always reasonable & Resale value too





U dont need to spend for the 32" LCD more
 
spaulose said:
That's a good suggestion, but i think one should guage the audience first and then take an informed decision. That's more because I would have to go for an Internet connection which would at least cost me 1000/- pm as rental.
Click to expand...

Much higher IMO. Since the net has to be routed to each machine you're going to need a connection with decent bandwidth and low pings. Not to mention the additional hardware like routers and the likes.

Shell out an approx. investment for the systems/hardware. Maybe we can come out with suggestions.
 
I think Ethan_Hunt is right, it might be a good idea to add a X360 and/or a WII instead of all PS3s. Would help you tap a bigger market.

However I think it best if you go talk to someone who's actually run one of these places. Go looking around for one and chat up the guy running the place. Though you can make reasonable estimates of your costs, the revenues will depend on the demand which is hard to estimate for someone from the outside.

Another thought, dont know how feasible. Any possibility of making these PS3s coin operated? That way people would be paying per game instead of per hour. Say 5-10 bucks a coin (like in FutureZone). Something like Street Fighter 4 would be a great game to have in such a scenario and I am fairly sure there's an arcade version of Street Fighter 4 out there.
 
also there are other costs u have to include like shop license for govt, also u have to bribe a lot of people to push things forward, at least that happens in Bangalore.

i would suggest u rather start a franchisee than go all out on ur own especially if ur starting out new.

and 16 lakhs investments for a place like mumbai doesnt sound enough,

there are non refundable costs like the pagdi system which u will have to pay the owner. this usually happens alot but never talked. pls consider this too as a possiblity.
 
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