Regardless of the business you start, it is always important to weigh out all advantages and disadvantages to know what to expect. One of the easy ways to assess whether a business is worth the effort is to use a SWOT analysis strategy. “SWOT” stands for strengths, weaknesses, opportunities, and threats that the future venture might be having. In this article, we’ll cover a detailed SWOT analysis for a cyber café to help aspiring business owners make an informative decision.
A positive thing to do first about an esports café business would be to discuss its strengths. Let’s have a look at some positive things about this enterprise.
The gaming market is growing every year, generating $184.4 billion over 2022 according to Newzoo data source. Cybercafes that focus on providing space for gamers to play their favorite games have a great amount of interest from the public. With game publishers trying to engage more people into their creations, cybercafes are shapeshifting in attempts to attract as many gamers as possible. Meaning that there’s no one single model of cybercafe business – aspiring owners can build their cafes according their own standard and wishes of the local audience.
Management software for cybercafes automates a lot of the processes, so you got yourself covered from employee fraud and sudden equipment wear out. Such cloud platfroms like SENET make remote supervision of business possible and add another point into the list of strengths in SWOT analysis of internet cafes.
SENET software for gaming centers and cybercafes locks Windows system folders for customers, automates billing and game updates, keeps computer systems safe, and provides reports on all financial operations. Even though a cybercafe cannot be considered a passive income for its owner, management software simplifies entrepreneurial life by a great extent.
There are many myths about the cybercafe business which entrepreneurs take for granted, making it a low competition niche. At the same time, cybercafes get a lot of traction these days and will continue to grow in number. Despite the fact that many people have computers at home, they still go to cybercafes to enjoy the atmosphere, participate in tournaments, and play on the most modern gaming equipment.
Fast return on investment
If you think everything through, cybercafe can pay itself back in less than a year. While you have to invest quite a large sum upfront to set up the location, install HVAC systems, and pay agents for obtaining all kinds of licenses, you can receive this sum back and earn more in quite short terms.
Pioneers of the industry have gathered tons of wisdom about gaming locations as a business and long used it to expand into chains or franchises. Aspiring cybercafe owners can start paving their way by joining one of bigger players on the market – almost every country has at least one successful franchise that can set you up in no time. If you’re afraid to make too many errors, franchisors might be of a great assistance during the first few years into operation.
You can start with a franchise
We developed SENET to help entrepreneurs to minimize the effect of potential weaknesses of cybercafe business. To find out which tools exactly you might need in your work, list all the weaknesses you can think of in your SWOT analysis of a cybercafe or esports arena. Let us start for you.
High initial investments
It only makes sense to open a cybercafe of a considerable size, otherwise the business will bring more losses than profits. Apart from expensive hardware and a great amount of effort to build a reliable ventilation/air conditioning system, brace yourself for a lot of comission fees for rieltors and license agents, wages for builders, designers, and handymen that will create the interior worth to come back for. And the equipment, of course.
Stealing and fraud
When you run a cybercafé, there is a possibility that customers may hack the billing software and play games for free. Sometimes staff might even catch a gamer that decided to steal a gaming console from the premises. While fraud is definitely a possible weakness, it can be prevented by choosing high-quality management software and ensuring you have antivirus and antimalware software installed on computers.
Management software usually shows statuses of all gaming machines at the venue, and according to the heatmap of SENET, interactive map of PCs and consoles is the most frequently used tab within the platform.
Frequent replacements of equipment
Get ready to upgrade gaming computer every 2 years or so, because the equipment tends to get outdated fairly quickly. Technological progress of the gaming industry doesn’t stop and games continue demanding more and more power from graphic crads, processors, and monitors. On the other hand, periphery gets broken and worn out even faster, especially if you decided to save money on it from the very beginning. Headphones and mice are the first to get replaced at cybercafes, so make sure you have a reliable supplier and a budget for them every month.
Opportunities go hand in hand with strenghts. This should be written in your business plan as points for future development of you cybercafe.
Cybercafes are pretty flexible and might be serving a wide audience. If you start from a gaming lounge, there’s a variety of roads that you can take to scale the business. It might grow into an entertainment center with old arcade machines, or into an esports bar showing biggest tournaments on big screens. It can grow into a training and bootcamp facility for ambicious gamers, or it can take a turn and serve office workers providing copy services and conference space.
A lot of vendors and neighboring businesses might benefit from having a cybercafe nearby. They can raise brand awareness and increase visibility placing their products in the cafe or engaging with the cafe audience in any other fromat. Even though such partnerships might not be absolutely free, collaborations would be a great way to promote your business, provide better customer experience, and to bring more visitors to the venue.
Road to professional esports
Many gaming venues venture into esports bootcamps and competitions. They provide their space to amateur and professional players as a marketing move or arrange their own local tournaments to engage with gamers. Sometimes, even real esports teams are forming on the base of cybercafes, most of the time even carrying the same name.
Nothing showed threats to cybercafe business like COVID outbreak. A lot of venues had to close because they weren’t prepared for total lockdowns and the absence of customers. Those who managed to shift quickly to cryptocurrency mining stood a better chance to survive lockdowns. Entrepreneurs that had a variety of ventures also froze operation of their cybercafes and focused on their other businesses to minimise losses. Some tried to engage with gamers at home, organizing online competitions.
Lockdown showed that it is important to diversify services that cybercafes provide. However, the most valuable asset that might help cybercafes to survive would be a loyal gaming community that is ready to support their favorite venue, even though they might not be able to be physically present there.
Gaming becomes more accessible
Those that say that cybercafes are the only spaces suitable for gaming don’t take into account the variety of multiplayer games that are available on home PCs and gaming consoles. To get the taste of competition, people don’t have to leave their own house or even their workplace. Moreover, a variety of online tournament platforms have emerged, helping gamers to form teams and look for opposing players in a few clicks. This threat should be eliminated by a strong brand positioning and marketing strategy of your cybercafe, answering the question “Why people should come here to play games?”
Know what to expect when opening a cybercafe
Just like with any business, it is important to be prepared for both the good and the bad when you open a cybercafe. While everyone has their own experiences with entrepreneurship, there are some universal tendencies that you should pay attention to. It is better to be overly prepared before you venture into a business than encounter an unknown situation after pouring money into initial investments. SWOT analysis allows you to look at this business from all the different angles, so it’s definitely a great thing to consider before you begin.