QUICK LINKS: Vending Videos  | Micromarkets  |

VT Classifieds

|

Buy a Classified Ad

|

Editorial Calendars

|

Circulation Data

|

Downloads

|

Bookstore

|

Operators Date Book

Search:    

Bookmark this site




Issue Date: Vol. 42, No. 5 / May 25, 2002 - June 24, 2002, Posted On: 5/25/2002


Operators Confront High-Stakes Revenue Battles As State Governments Suffer Big Budget Deficits


Marcus Webb

U.S.A. - A new type of trendy, game-oriented cyber café has caught the attention of several leading amusement operators from coast to coast, and some are considering entering the market. Called "PC bangs" , "bang" is an Americanized version of the Korean word for "room" , these computer-networked locations aren't about coffee and e-mail. That type of laid-back cyber café has been around at least since SF Net opened a decade ago in San Francisco. In PC bangs, however, the focus is on hot online group games, especially "Counterstike," "Diablo 2" and "Starcraft."

College-aged kids who are ardent players of these particular games appear to be the main clientele. Kids could play the games for free on their home computers, but the more popular PC bangs offer intensive social interaction that enhances the fun. Besides, most PC bangs are so cheap , typically charging players $2-$4 per hour for Internet access , that players figure they might as well spend a couple of dollars for a few hours' entertainment.

Nobody knows exactly how many PC bangs exist in this country. USA Today claims that southern California is home to "the biggest cluster" of PC bangs. But the paper also acknowledged that "such cafés are springing up in both urban areas and towns such as Missoula, MT, North Olmsted, OH, and Hendersonville, TN" and that a PC bang called The Stomping Grounds is a hot attraction at the Mall of America (Bloomington, MN), slated for a second nearby store later this year. Dozens of PC bangs can easily be found in many major U.S. cities. Consumer magazines such as PC Gamer and Image Monthly have recently published lists of PC bangs nationwide. And, several websites exist for the sole purpose of helping fans find these places (such as cybercaptive.com).

The potential profitability of PC bangs for U.S. operators remains unclear. One experienced arcade operator estimates it would cost $100,000 to open a competitive store in a high-traffic venue. That investment figure includes 40 Internet-connected computers at $3,000 each; knowledgeable attendants at $12 per hour who would be on duty up to 24 hours a day to instruct newcomers; rent of some $1,800 per month; and a monthly T-1 service charge. In New York and Los Angeles, some existing PC bangs have 40, 60, or 80 terminals online.

"I'm intrigued by PC bangs, but $100,000 is a lot of money to risk on what may be just a fad," this arcade operator commented. "I'm concerned that so much of the phenomenon appears to be driven by the craze for a single game, 'Counterstrike.' When that game has run its course, the customer base for PC bangs may dry up as the kids move on to something else." On the other hand, this operator admits, without a hit title to draw players into the sites, PC bangs may never have taken off , at least in America , in the first place.

The number of PC bangs may be poised for a major growth spurt , with or without involvement by traditional arcade operators. At least one coin-op manufacturer has developed a software program to facilitate the timed Internet access that lies at the heart of cyber café operation. The arcade operator who spoke to V/T added: "Our research shows that a number of exhibitors at the next Electronic Entertainment Expo may be displaying hardware and software for turnkey PC bang store operation." (E3 will take place May 22-24 at the Los Angeles Convention Center.)

The PC bang expansion in some cities , and sporadic youth violence in or around some of them , is also attracting regulatory interest from public officials. In Los Angeles County, the mayor of Garden Grove fears that his jurisdiction's 21 game-centric cyber cafés are becoming magnets for gang violence. (See V/T, February 2002.) Following several violent incidents, Garden Grove recently banned new PC bangs and passed an ordinance banning players under 18 during certain hours. Another dozen or so California jurisdictions are reportedly considering similar regulations.

The PC bang trend began in the late 1990s in South Korea, where broadband service is cheap, and the craze is still hottest there. Bloomberg News reports that a staggering one-third of South Korea's total population of 46 million people regularly plays online computer games, most in public venues. Reputable observers such as Britain's Guardian newspaper also estimate between 18,000 and 25,000 PC bangs are currently operating in South Korea.

(V/T suspects some of these Korean net-connected locations are less focused on games and more on providing more routine types of online services such as e-mail and Internet research. Korean culture was already heavily centered on "bangs" of one kind of another, long before the PC variety arose. Korean bangs variously feature everything from beer to comic books, as well as less innocent attractions in some cases.)

PC bangs reach far beyond Korea, however; they are truly a global phenomenon. From India to Albania, traditional cyber cafés are up and running profitably by the thousands worldwide. Such stores are especially popular in poorer countries where every home doesn't have a PC and an Internet connection. The newer type of game-centered cafés are becoming notably popular in such countries as Taiwan, Malaysia, the Philippines and China.

Europe has its fair share of PC bang sites, as well. In Great Britain, Wireworld (Somerset, England) operates a chain of four locations, generically referred to in the UK as "gaming centers." Wireworld plans to open three more stores soon. In addition, the company offers franchise opportunities, encouraging would-be operators to take advantage of their experience.

"We supply and fit your arena, complete with all the games pre-installed and patched to the latest versions," reads the promotional copy on www.wireworld.com. "Due to our sponsorship deals with Nvidia, Logitech, Saitek and Leadtek, you get much, much more PC for your money. We also offer you and your staff two weeks on-site training here in Somerset to ensure you get it right with your customers from day one of business. We supply all your software licenses too."

Cash tournaments are a growing phenomenon in the PC game world, with million-dollar purses reportedly available for some online games played at home. PC bangs are getting into the act. In England, for example, Wireworld runs all-day tournaments and weekly league nights with prizes worth over $3,000 in U.S. currency.

The makers of America's hottest PC bang games admit they didn't design their software with cyber cafés in mind. These manufacturers originally targeted the home computer market. But now that their games have become so popular in these venues, the creators intend to aim squarely at this niche next time around. "Starcraft" was issued by Blizzard Entertainment (Irvine, CA), while "Counterstrike," "Diablo 2" and another PC bang favorite called "Half-Life" were produced by Valve Software (Kirkland, WA).

If the PC bang market catches on strongly among U.S. amusement operators, more coin-op factories can be expected to rush to catch up with their own versions of the related hardware, software, and licensing programs. Otherwise, the possibility exists that a major investment cycle would largely bypass the traditional game and hardware suppliers.

One thoughtful arcade operator , who is seriously considering entry into the PC bang market , expressed an ambivalent attitude toward this possibility. He asked: "Wouldn't it be ironic if what the operators have requested for years , a PC-based universal platform that can play all kinds of games, without forcing the operator to buy a new cabinet each time , has finally arrived' and it came from completely outside the coin-op industry?"


Topic: Music and Games Features

Articles:
  • Game Exchange Of Colorado Becomes Official MEI-CPI Service Center
  • Live Oak Bank Arranges Funding For GameTime's Flagship Entertainment Center
  • Golden Tee Prize Play Payout Passes $50 Million Mark
  • Shaffer Distributing Kicks Off TouchTunes Service Schools
  • NDA Implements Prepaid Electronic Dart Tournament Fees To Meet Player Demand

Copyright © 2014 Vending Times Inc. All rights reserved. 
P: (516) 442-1850 | F: (516) 442-1849 | subscriptions@vendingtimes.net
55 Maple Ave. - Ste. 304, Rockville Centre, NY 11570