What Happened to Internet Cafes and Why Did They Vanish

Have internet cafes completely died yet? Well, they're on life support and unfortunately our kids and our grandkids won't be playing on land counter strike with their friends and bonding because this is dying industry. And anyone who's looking at the data now is definitely not going to be opening one of these businesses and their biggest threat is not other internet cafes competing with them. It's just the advancements in technology. Internet speed all over the world is faster and it's cheaper now, especially with four and 5G packets. And on top of that, what smartphones couldn't do five, 10 years ago on laptop, they can do them now. So there's less need for people to go out and rent PC. And they have high startup and upkeep costs with small demand in specific regions with global usage dropping. And that demand is for specific reasons, and we'll get into why that is. So let's look at the global demand. In most developed countries, home and mobile internet completely killed internet cafes. They barely exist or not existed. In Latin America, it's going to continue falling in the coming years between 30 to 5% is the estimate. So, it's not looking too good there either. What about Africa? Well, internet packets and packages are and even home broadband is still very expensive. They have really good fast internet. So, lot of people, it's just cheaper for them to go to an internet cafe and rent the Wi-Fi, even if it's just on their home devices because maybe they need fast Wi-Fi for specific reasons. What about in Asia? And some some places still hold demand for very specific reasons. And we'll get into why that is. Especially Japan, it has really unique reason to why that is. And in Europe and North America, traditional markets, mean, they barely exist anymore. There's no demand for these places, but there is in China and Philippines and Indonesia. And we'll get into why that is. So, people need cheap access to gaming PCs. That's one of the biggest reasons these things are still around. To build gaming PC with the monitor, the keyboard, the mouse, the headset, it's not cheap. mean, you're looking at around $800 to $2,500 depending on the GPU you buy and all the other parts. So people still also enjoy playing on land in some specific regions, but it's dying off. And students who are looking for jobs maybe will go to these know this sounds crazy, but they'll go to these internet cafes because now they're expanding into so many areas like helping you with your resume, laminating, printing and scanning like printing services and businesses. They're doing whatever they can, but it gets crazier. We'll get into those other strategies they're using to stay alive. So the startup costs and rent, especially in big cities. Let's say you want to open up in big major city city like don't know Taipei or Istanbul, you're going to be paying crazy rent on top of the dying demand. Who would dare open one of these businesses? And like said, the PCs are expensive to build with the entire setup. Not accounting for the desks, the chairs, the internet network connection that is so fast that people can all game on together, hundreds of people with perfect ping and then software licensing and repairs. Don't forget about utility costs for AC units that have to be on. It has to be nice and cool. Lights on 24/7. Lots of computers siphoning electricity. It's not cheap business to run for sure. So, like said, in big cities, the rent is very expensive. And who would dare open in rural areas where the rent is cheaper with already dying demand, too. So, how do these cafes actually make money? I'm sure we all know this. They charge you an hourly rate to rent PC anywhere from$1 to $2 depending on the country. And you know if you back then when you had like 100 PCs and they were all full the business was making around 12 to 19k month. So it's good business. But let's look at the fun part of this. How are they trying to stay alive? They're trying to adapt in the craziest ways. So this is this is some things are expected here but some things are big surprises. for example, obviously they're going to start selling gift cards for PSN, Xbox Live, Steam, and then they're going to maybe start running tournaments, gaming, esports tournaments with entry fees, printing, laminating, scanning, graphic design services, also food, drinks, and snacks. They'll even sell you bubble tea in some places. And then, this is cool one. they'll actually help you build the gaming PC. They'll all order all the parts and sell you the finished desktop. Or you can buy specific parts. They'll order it for you. Maybe you need new GPU for your home PCs. You'll go there to buy one because they maybe have lot of extra parts from all the PCs they do have. And some internet cafes are slowly moving into hotels and the real estate industry. Well, look at Japan. Japan has really unique market where people are very isolated. mean, they even have word for it for these people who never leave their homes. And rent can be expensive in some areas in major cities. So, and lot of people work off their computer or just need their computer all the time. So, what they do is they have these small little boxes that you can rent that has small desk and gaming PC with place to lie down and then there's bathrooms there. There's shared snack vending machines and all these things. they've turned it into hotel, which is good way to deal with the high rise of costs for rent. So, it's interesting the way they're adapting and almost like the membership and subscription programs some internet cafes did have where you pay onetime fee per month and you get unlimited access. So, what are their big risks? Like we said, mobile devices, faster internet at home, broadband, cheaper four and 5G packages that are even faster and unlimited than they were before. And we can just look at what happened in 2010 to 2012 in this study with PC banks in Korea. They lost 17% of the market just when internet usage rose. So especially on mobile devices. So you can imagine what those stats are going to be. Now this is almost 15 years ago. So high running equipment and utility cost like explained and then with the co lockdowns and all that you can imagine how many of them also got faster boot out the market too. So too many competitors and alternatives but not specifically other internet cafes is what we've learned. It's just the advancements in internet and technology that's killing this business. You know, there was need for the VHS tapes and the DVD rental places back then, but then when the internet came out, that need died and so did those businesses. So, like said, they're evolving in any way they can. for example, in Philippines and China, there's still lots of esports tournaments that they try and hold. And some of the other ways they're trying to experiment to stay alive is turning them into like VR amusement parks where you go in and you rent VR headset and you ride cool ride and you sit on chair that shakes while you watch something really cool on VR headset. And then they're also doing coding competitions and hosting workshops for digital literacy classes. Some of them are turning into co-working hybrids because what are they going to do with all this unoccupied office space and equipment that cost money and they're going to target freelancers who need place to work? And the craziest ones I've seen are people who are turning the entire cafes into cryptocurrency mining facilities because they have all this expensive hardware like good quality GPUs and CPUs. Why not just mine crypto off them? What else are they going to do? But unfortunately the global market is expected to continue shrinking. That's what the market trends show for this industry with the CAGR which stands for compound annual growth rate to be minus 5% annually. That's the expected amount to continue and overall the decline is expected to continue. Obviously with pockets of small areas that may still have some small demand but maybe in 10 15 years our kids won't be playing Counter Strike online in these internet cafes like we used to when we were kids. So unfortunately this is the sad reality of this industry. new technology came out and wiped it off the market. And that's what you have to be aware of when you get into business. There are risks associated with any kind of industry. And if you have local business and you're trying to get more local customers to find you and stay ahead of the competition and stay up to date with all the latest things that are coming out, book free call with me where help local businesses around the world rank higher on Google Maps, which is the number one platform people go to locally to look for service that they want. So, if you're into that, you can book free call at vortexrecorder.com with me at time that's most convenient to you and can see how can help you out. So, hope you learned some interesting things from this. know it was sad video, but mean it does open our eyes to how markets can change so fast. But that's about it for today. hope you have good one. Take care.