PC games help cafes cope with hard times

CEBU, Philippines – Even as the Internet subscription is significantly increasing Internet, Café business still thrives driven by the growth of online game interest among young generation, including young professionals.

One of the largest players in the Internet Café business in Cebu Francis Lim said that although profit in the Internet Café business is shrinking, its business prospect is still good, considering that 80 percent of the total revenue of an Internet Café is generated from computer games.

Lim, who operates the Voyage Internet Café in Cebu, with a total of 350-seats spanning from six outlets located in Sanciangko, Talamban, Consolacion and other areas said that the bread and butter for Internet Cafes continues to be the game-related services compared to other Internet services, like web browsing, chat, among others.

With the seemingly saturated market for Internet Cafes that becomes like a Sari-Sari store, that one can find an Internet Café in every corner Lim said the battle in the industry now is providing value-added services, while renting charges have dropped significantly over the years.

From an average per hour rate of P25 in the last few years, per hour rent has drop to as low as P6 per hour, due to the tough competition in the market. However, for the large players like Voyager, Lim said the company maintained a P20 per hour cap, to stay in the business, while provide perks for Internet users such as faster connection, upgraded hardware and software, improved quality of service, cleanliness and ambiance.

Gaming has become the bread and butter for the survival of the Internet Café industry. Otherwise, this business which was one of the most profitable businesses in the last few years will become “a thing in the past.”

Online gaming market surprisingly, he said is not only dominated by the young generation, but also for young professionals who go to Internet Café regularly to play LAN (Local Area Network) games, although these customers have Internet connection in their houses.

While a lot of Internet Café businesses have folded in the last few years, because of bottleneck competition, Lim said others are thriving, as they have continuously invested on sustainable measures like software and hardware upgrade, and providing conducive ambiance both for gamers, and web browsers.

This time though, the direction for Internet Café business is going towards countryside expansion, as there are a lot of towns do not have this kind of facility in their localities.

Lim, who is also member of the Internet Café Association In Cebu (iCAC) said that prospects for Internet Café business is still good, as long as an operator is ready to generate longer time of ROI (Return of Investments), and thinner profit margin.

He said as long as interest of LAN games among youngsters, and even the young professionals will still there, Internet Café industry will thrive even in the countryside environment.

In fact, Voyager Internet Café chain will expand its total number of seats before the end of 2009 and open up more outlets in the countryside areas in Cebu, Lim said. — Ehda M. Dagooc (THE FREEMAN)