“In the New Year, I went to Internet cafes to play games all night, and I feel like it’s time to read.
Chen Muhua, who returned to his hometown for the New Year, spent the third and fourth days in Internet cafes. “It’s rare to meet high school classmates. They invite to the Internet cafes to play games. Now the county Internet cafes have a good environment and computer configuration. Playing games all night is also suitable for the Spring Festival. During the period, where is the time for work ‘996’.”
Many people like Chen Muhua who don’t have time to play games in Internet cafes on weekdays can find time to meet three or five old friends to play games in Internet cafes during the Spring Festival holiday. This also makes the business of the cold Internet cafes on weekdays better. This situation resonated in the WeChat group of Internet cafe owners where Li Yu is located. “Many colleagues say that Internet cafes are full during the Spring Festival.”
Such a good day is difficult to continue. Seeing that the Spring Festival holiday is coming to an end, Internet cafe owners are beginning to worry about their operations after the holiday.
“Everyone is discussing how to promote the follow-up activities of Internet cafes.” Li Yu told Ran Caijing that Internet cafes are generally not very good. “If the business of Internet cafes on weekdays can be as good as during the Spring Festival, the Internet cafes I open will not be too good. 2020.”
With the popularity of computers, Internet cafes have long been a sunset industry, but in 2017, the “chicken-eating game” became a big hit. More than half of the people in the Internet cafes were playing PlayerUnknown’s Battlegrounds, and well-configured Internet cafes had to queue up. At that time, Li Yu felt that the turning point of the Internet cafe industry had come, so despite the dissuasion of his family, he took out the 2.2 million yuan his family had accumulated over the years and invested in an Internet cafe.
But Li Yu is still a bit too optimistic. As an innovative upgrade of Internet cafes, Internet cafes with comfortable and bright gaming spaces and high-end computers have not reversed the decline of the Internet cafe industry.
On the one hand, there are no new hot games in the client game market, and fewer and fewer customers come to Internet cafes to play games. In addition, the surrounding Internet cafes are also upgrading their configurations. The competition is getting more and more fierce. Li Yu feels that the operating pressure has doubled, but the average Internet cafes With an income of 100,000 yuan per month, continuing operations are not a problem. “At the beginning, it was reasonable to assume that it would take three years to pay back. The configuration of my equipment itself is not low. It is no problem to stick to it for three to five years. When the equipment is facing obsolescence, I will decide to quit or continue investing.
But the reality is so dramatic. The menacing epidemic in 2020 has directly crushed him. He has to pay fixed expenses such as rent and employee salaries while he has no source of income. “In March 2020, it was said that it could prepare to open, but it was suspended within two days. It officially opened in June, and basically not many consumers dared to come to the door. I invested more than 100,000 yuan, which did not help. I don’t want to toss about it anymore. Yes, 400,000 yuan was packaged and transferred in November.”
Li Yu regretted not having lost more than one million and taking three years.
2020 will be a difficult year for all practitioners in the Internet cafe industry. There is no doubt about this. According to the professional version of Tianyancha, in 2020, there will be 2,796 new Internet cafe-related enterprises nationwide, and 12,888 closed down (including 3,638 revoked enterprises and 9,250 cancelled enterprises). The total number of existing enterprises nationwide is 124,818. (Data as of February 16, 2021, with names containing “Internet cafes” and “Internet cafes” as filter criteria)
Even the Internet cafe opened by the king of heaven, Jay Chou, failed to make it through. In 2017, Jay Chou, who likes to play games, guest appearances in various e-sports competitions and game live broadcasts, opened a “Magic E-Sports Hall” in Shenzhen with a capital of 20 million. The configuration is first-class, but it will be closed in 2020.
Nearly 10% of Internet cafes have disappeared from the market within a year. For entrepreneurs who cut their meat and stop losses like Li Yu, only they know their suffering, but for those who still insist on leaving the market, they need The market space vacated by Fang will make their lives easier to a certain extent.
Internet cafes need more PlayerUnknown’s Battlegrounds, but maybe they can’t wait for the next one before they fall.
If you want to survive, you can only engage in an “arms race”
“I7-8700K processor, 16G memory and GTX1060 graphics card. This is the installed configuration of my Internet cafe computer. It is not an exaggeration to say that these configurations can be regarded as mid-to-high-end configurations now.” Li Yu mentioned when he was preparing for the Internet cafe. He is still very excited about the hardware configuration. He thinks that only a computer with a high configuration can bring a steady stream of customers to Internet cafes and play the “difference card”.
During the opening of the National Day in 2017, the high-configuration equipment attracted many customers for Li Yu’s Internet cafes. “PUBG Mobile and Fortnite were the most popular end games of that year, because the game requires particularly high computer configuration. The computer configuration in my internet café is definitely one of the best in the local area, and there is an endless stream of customers. In just half a month, the accounted member recharge fee is 500,000 yuan.”
The net profit in the first month of opening exceeded 600,000 yuan. This performance made Li Yu overjoyed. He even felt that the originally planned 24-month payback period could be reduced to 18 months. However, it backfired. The popularity of the first two months before the opening did not continue. During the 2018 Spring Festival, even a person who did not play games obviously felt that there were fewer and fewer players coming to play “PUBG Mobile” in Internet cafes.
Li Yu’s feeling is correct. According to statistics from the data website SteamCharts, since the launch of PlayerUnknown’s Battlegrounds in March 2017, there was a negative growth in the number of players for the first time in February 2018, a drop of 12.23%. Since then, although the game has been popular for a long time, it has been going downhill. So far, the peak record of the number of simultaneous online users of the game stayed in January 2018.
Li Yu, who ended the operation of Internet cafes, refocused his focus on the “office equipment supply” of his old bank. This month he just joined an office equipment company set up by a friend. The company began to test the water “equipment” in late 2020. “Leasing” business, “Although there are many Internet cafes that have closed down, there are also newcomers in the industry. We mainly provide equipment free deposit rental services for Internet cafes, e-sports stadiums and other places. The rent is paid monthly, and the full after-sales warranty is provided.”
According to Li Yu, this kind of leasing method that does not occupy upfront capital pressure is very popular in the market, and most of them are willing to try to open e-sports hotels, e-sports Internet cafes and other companies that require high equipment configuration.
E-sports themes have been the “hot past” of the Internet cafe industry in recent years. If the transformation of Internet cafes to Internet cafes is the general trend, then the endless emergence of e-sports themes is also a new way for the Internet cafe industry to seek transformation. “The computer configuration is getting higher and higher, and the e-sports display has become the’standard’ of the current Internet cafes.” Chen Shen, an industry insider, said.
Many owners in the owner group of Internet cafes where Li Yu is located said that the computer configuration is not good enough to attract customers, and customers who play games will ask about the equipment in the store. “Last time a group of young people were going to come to’open the black’. When I heard that there were ordinary display screens in my store, they immediately turned away.”
There are naturally many consumers who are willing to pay for the sense of experience, and the big head is one of them. Even if the big head’s monthly salary is only a few thousand yuan, he did not hesitate to charge a membership fee of 20,000 yuan in a home appliance stadium at the beginning of the month. “i9-9900kf CPU, 240HZ monitor, Hyperx mechanical keyboard… Just one word, cool!” According to Datou, he originally only bought an experience voucher at a low price on the group buying platform, but because of the excellent experience, he charged up to become the top member of the store.
The big head told Ran Caijing that the home appliance competition hall is located in the core area of the local area, covering an area of 2,000 square meters. The owner spent 30 million yuan to build it. In addition to the online games and other services provided by the traditional Internet cafes, the store also provides hotels, bars, and VR full entertainment. Waiting for the format, “it is simply a paradise for e-sports enthusiasts, the facilities and services are considered first-rate, the boxes were basically full at night, and the attendance rate in the hall was more than half.”
Datou revealed that he did not want to recharge 20,000 yuan originally, but non-members need 30 yuan per hour, and members also have three levels of 12 yuan, 15 yuan and 18 yuan per hour. The higher the recharge amount, the longer the bonus time. That’s a lot. It’s only two or three yuan per hour for a full charge of 20,000 yuan. He thinks that’s the only way to go.
However, Xue Li, a LOL game player, did not understand the high time fee. He felt that the network fee was 6 yuan per hour as the acceptable upper limit. “Now which game player does not have a high-configuration computer equipment at home, go to the Internet cafe to play the main It’s also for the convenience of teaming up with teammates.”
All in all, the e-sports arena that Datou said is the epitome of the upgrading and transformation of some Internet cafes, but it can only represent the leading companies in the industry. At present, most of the practitioners in the Internet cafe industry are self-employed, and their ability to resist risks is weak, and pressure on funds is their common pain point. Li Yu told Ran Caijing, “People who can get tens of millions of Internet cafes can continue to use money to improve the configuration of facilities, and to meet the needs of consumers in various ways. This advantage is that self-employed people like us can’t keep up. Can survive the epidemic.”
The 2020 epidemic caused large-scale closures of Internet cafes. Chen Shen said: “The tide of closures of Internet cafes actually occurred in 2011 and 2017. Take this time in 2017 as an example, when the closure was mainly affected by industry competition. In the past few years, entrepreneurs have become extremely cautious in investing in Internet service venues and no longer blindly open stores. In addition, relevant departments and associations are actively promoting the transformation of the Internet cafe industry. Therefore, entrepreneurs are more concerned with upgrading equipment configuration and environmental decoration. A place to improve consumer experience.”
After all, Internet cafes are still on the old road. The better the equipment, the more popular they are, and they can have a healthy cash flow. However, if they don’t engage in an arms race, they will soon be eliminated.
Internet cafes, the “specialty” of the times
“Now the Internet cafes are much better than the Internet cafes I went to when I was in middle and high school, both in terms of environment and equipment configuration.” The big head said proudly, “Although the 20,000 yuan is very distressing, but the time fee is reduced and the black Internet cafe that I went to when I was young “It’s not much difference, but the sense of experience is above and below.”
Linde, who has just turned 18 this year, has no idea about what the big head calls “black internet cafes”. Linde’s enthusiasm for internet cafes is not high. “I play mobile games, so there is no need to go to internet cafes.”
However, for Jialuo born in the 1970s, the Internet cafes in the late 1990s were the pinnacle of the industry, and he still remembered the “Feiyu Internet Cafe Street” at the school’s Xiaonanmen. “Some time before the opening of Feiyu Internet Cafe, I tried free Internet access from 7 am to 9 am. I also tried to wait in a long queue in front of the store just to get online. However, Internet cafes charge quite a bit for students from rural areas like me. High, the free time from 2 to 9 in the morning is 10 yuan an hour, the rest is 20 yuan an hour, and my monthly living expenses are only 120 yuan.”
Jialuo born in the 70s, the big head born in the 90s, and Linde born in the 00s have very different knowledge and understanding of Internet cafes.
Around 1996, Internet cafes began to appear in major cities such as Shanghai and Beijing. Shanghai’s Weigate and Beijing’s Shihua opened Internet cafes to become the first batch of Internet cafes in China. Because of the high fees, the customers who go to Internet cafes are mostly high-income groups such as overseas returnees, white-collar workers from foreign companies, and teachers. At the beginning, Internet cafes also needed to connect to the Internet through a telephone line, and the speed of the Internet was so slow that Internet users could not imagine now.
“Using a computer connected to the Internet to send e-mails, to inquire about stock quotations and network information, is the most common use of Internet cafes.” Jia Luo said.
Mo Zhiyu, who has been engaged in Internet service research for many years, told Ran Caijing that the Internet cafes opened around 1997 were mainly located in big cities. However, after 2000, the slogan “If you want to develop, open Internet cafes”, all parts of the country The number of Internet cafes has skyrocketed, and Internet cafes without business licenses have emerged. “The entrepreneurial story of 500,000 half a year’s return has spread across the country. Anyone who has money wants to join in the fun. In some places, the supervision is relatively loose, and all the procedures can be completed in ten days. Go through the formalities; in cities such as Beijing with stricter management of the electronics industry, entrepreneurs have to take risks and engage in illegal operations in order to make money.”
However, in June 2002, a man-made arson accident at the Lanjisu Internet cafe put a sudden brake on the barbaric growth of the Internet cafe market. In November of the same year, the “Regulations on the Administration of Internet Service Business Places” was promulgated, and the Internet cafe industry began to move towards standardized operations. Related practitioners in the Internet cafe industry must obtain corresponding licenses to operate externally.
Mo Zhiyu believes that while the introduction of normative regulations has promoted the orderly development of enterprises in the Internet cafe industry, several popular client games such as “World of Warcraft” and “Legend of War” are also bringing a steady stream of customers to Internet cafes. “Although the Internet cafes around 2005 can’t make money as fast as those around 2000, the multiple sources of income, such as internet fees, game promotion fees, and game point card sales, still allow Internet cafe practitioners to make money’lying down’.”
With the popularization of the Internet and the popularization of computer hardware prices, more and more netizens are able to own their own computers, the role of Internet cafes is gradually weakened, and the business of Internet cafes has begun to decline. In 2011, the Internet cafe industry saw the first wave of bankruptcies. Chen Shen recalled: “The bankruptcy of many Internet cafes around 2011 was caused by the industry’s ten-year development and the market has become saturated. However, the launch of client games such as “League of Legends” and “DOTA” brought the industry vitality.”
At that time, the surviving Internet cafes were also exploring how to win with “differentiation”. At that time, because of the fresh and elegant Internet environment and comfortable Internet experience, the chain Internet cafe “Netfish Internet Cafe” with more than 60 directly-operated stores in various places became the object of Internet cafe operators vying to imitate. Internet cafe operators in major cities began gearing their hands and redecorated one after another, trying to achieve a gorgeous turn from Internet cafes to Internet cafes.
Around 2017, with the popularity of client games such as PlayerUnknown’s Battlegrounds, Fortnite, and the promotion of League of Legends events, e-sports has gradually become commercialized, and the term “e-sports” has become popular. Capital’s response speed has always been the fastest, but the capital institutions that have heard the news are more on the sidelines, and only a few companies on the e-sports road have received investment.
At the same time, under the relationship between Internet cafes and client games, mobile games have gradually replaced client games, making the life of Internet cafes more difficult. It can be said that, except for the small number of game players, almost No one will go to Internet cafes anymore.
Internet cafes are not suitable for the “mass line”
Most of the people who go to Internet cafes are young people. The “2020 “Z Times” Insight Report” released by QuestMobile shows that Gen Z users pay more attention to consumer experience while pursuing high quality and cost-effectiveness. Similarly, consumer experience is also one of the focuses of Internet cafe consumers.
“Although my Internet cafe has closed down, I still don’t regret spending so much money on equipment configuration. If it weren’t for these configurations, I don’t think my Internet cafe can survive the first year. My Internet cafe is better than the surrounding Internet cafes. The price is more than 20% higher, but the source of customers is still only a lot more, because consumers are willing to pay more for the experience.” Li Yu said.
Today, when everyone has a computer, Internet cafes no longer have to take the “mass line” as they did in the past and rely on numbers to win. After completing the historical mission of “popularization”, Internet cafes began to develop in depth.Customer experience has become the only goal. This makes the Internet cafes better and better, the decoration is more and more luxurious, the configuration is more and more high-end, but the investment is also getting bigger and the profits are getting lower and lower, and such an Internet cafe alone , Basically can’t make money.
Internet cafes are no longer a good business.
In 2019, the market did not wait for the news that Wang Sicong and Huang Xiaoming invested in Netfish Internet Cafes to go public in Hong Kong. Instead, it waited for the news that Netfish Internet Cafes’ registered capital had shrunk from 50 million yuan to 44.953 million yuan. “Since 2019, there have been only a few sporadic investment incidents in the Internet cafes track, and the attention is too low. The Internet cafe industry urgently needs to’self-help’.” said Ma Kuang, an investor who has been following the entertainment sector for a long time.
Faced with reality, the Internet cafe industry is also trying to break the situation. Mo Zhiyu told Ran Caijing: “The Internet cafe industry is mostly self-employed. According to data in 2018, chain stores in the Internet cafe industry accounted for less than 20%. Therefore, for self-employed individuals, they can adjust their business strategies at any time without having to deal with the headquarters. Responsible, there is no need to be responsible to shareholders.”
According to Mo Zhiyu, from the provision of convenient services such as express delivery and printing, to the contracting of e-sports games, the current Internet cafes are no longer limited to providing users with Internet access services.“Whether it is the Internet cafes that combined’Internet cafes + water bars’ in the early years, or the e-sports Internet cafes and e-sports halls with the theme of e-sports in the past two years, their purpose is to transform and seek development.”
At the same time, Mo Zhiyu also admitted that the effect of the transformation of the Internet cafe industry is not good. Even when the concept of e-sports is booming, there are many Internet cafes with mixed results that are “swindling and cheating” under the banner of e-sports.
“There are many fake e-sports Internet cafes on the market that sell dog meat. The boss thinks that the interior design of the Internet cafes is cooler, and the chairs are replaced by e-sports chairs. The Internet cafes will become e-sports with double the charge. Internet cafes.” Mo Zhiyu pointed out that e-sports games have high requirements for computer configuration. Players can fully understand the configuration of Internet cafes after experiencing them on the computer. Such fake e-sports Internet cafes will only throw stones at themselves. Feet.
Outdated equipment is one reason for the decline of Internet cafes, and the declining client games are another reason.
Data website SteamCharts’ online player count rankings show that among the top ten games, “Counter-Strike: Global Offensive” (English name: “Counter-Strike: Global Offensive”) is highly popular. Juechen, the number of online players is close to twice that of the second-ranked game “Dota2”. It is worth noting that the global release time of “Counter-Strike: Global Offensive” was 2012, and it has been nearly 9 years old. In the rankings, you can also see two games “Valheim: Hall of Valor” and “Ghost Valley” that were launched within a month, but they are still relatively small.
“The epidemic has only accelerated the reshuffle of the Internet cafe industry.” Ma Kuang told Ran Caijing, “The payback period for investing in an Internet cafe is getting longer and longer.From half a year to pay back 20 years ago, to three years now, I can’t pay back and can only leave the market.The fierce competition in the industry is evident. “Ma Kuang believes that the equipment configuration update is very fast, and the Internet cafes that mainly provide game services may have to update the hardware every three years to ensure that the consumer experience is not affected.
“But the cost will naturally increase. If all the costs are passed on to consumers, consumers will definitely not buy it.”
Heavy assets, no barriers, and homogeneity are issues that the Internet cafe industry has always been unable to avoidAt the same time, the continuous innovation of mobile games has also put pressure on the Internet cafe industry. According to data from the National Press and Publication Administration, among the domestic online games reviewed every month in 2020, more than 90% of the mobile games have been reviewed, while very few client games have been reviewed.
“The current degree of chaining in the Internet cafe industry is not enough. The most famous Internet cafes on the market, the Internet fish Internet cafes, are open to join, and the number of global stores has just broken. But without capital injection, it would be tantamount to improve the degree of chaining.” Ma Kuang It is believed that Internet cafes will develop in the direction of offline entertainment complexes in the future. “Currently, some e-sports experience halls that integrate multiple entertainment formats on the market are a good attempt.”
*The title picture and the picture in the text are from unsplash. In the text, Chen Muhua, Li Yu, Chen Shen, Datou, Xue Li, Jialuo, Linde, Mo Zhiyu, and Ma Kuang are all pseudonyms.
Author: Feng Xiaoting
Editor: Zhao Lei
Source: Ran Dimension