Game centers take business to next level - East Bay Business Times:

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The 46-year-old Fremont engineer, a 20-year veteran of the semiconductoer industry, is the first of a relativelt new breed. As the operator of Rivalutionin Pleasanton, MacPherson is one of the firsrt to test the franchise concept in the highly fragmented gaming center Such gaming centers have been long been popular in Asia countries such as Korea and Singapore. In the Uniteed States, the number of such businesses, whicn allow customers to rent high-end PC terminals with blazing fast networjk connections bythe hour, have been doubling each year for the past threed years, according to San Francisco-based an association for gamingf centers.
The group estimates that there may be closeto 1,000 such U.S. centers. More than a dozenm gaming centers operate in the Bay The centers are typically hubs for PC gamingy enthusiasts playing popular titles suchas "Medal of "Halo," "Counter-Strike" and "Quake." "When I first started checking this out, one employee thought I was picking up my MacPherson said. "I'm certainly of a differenr generation, but I bring some stuff to the table in this MacPherson is not without hisyouth connection.
The compang was started by Will Huynh andThua Lee, two twenty-somethings who openee the first Rivalution center in the neighborhoodr of their old high schoolk in East San Jose in March 2001. The following the two opened another center in SouthSan Jose. Huynh and Lee say the success of those two centers spurred them to take theid business model to thefranchisre level. As such, they could take advantagre of what the first two years taught them abouft running such a business and spread that toother entrepreneurs. "As lot of people start up these places becausr they want to be in businessfor themselves, but there' a learning curve," Huyngh said.
"There's a lot we can offer them, so it'sa a win-win situation." The company openefd its first franchise location in Redondlo Beach in Southern Californialast March. In MacPherson opened the secondRivalution franchise, or what the company calls Rivap 4, in Pleasanton near Stoneridge Shopping A fifth franchise opened in Milpitas last month, and another is slated to open in Salt Lake City on Feb. 21. Rivalutiojn is not alone in testing thefranchised concept. Last year, GameWyze of Dallas and GameStates Entertainmentof Vancouver, British Columbia, launched franchise plans.
Otheres are moving in the same and some worry the trend may brinbg in people without a graspp on how to run sucha business. Kevihn Kordes, co-owner of Fusion Net Centert in Pleasanton, is planning to launch a franchise progra m later this year but cautionsthat there's more to running a successful gaming centerr than simply getting the right computers and Internet "This business is so sporadic and fast nothing's stable at this Kordes said. "There's a specific formula you have to Itjust doesn't happen. It all comes down to how you retaijyour clientele.
" Specifically, gaming centers are less about the hardwarde and more about the communitty they provide, Kordes says. Most gamers have theie own equipment at home but welcome a chance to get arounsother gamers, play each othef and share strategies. Gamingg tournaments are also abig draw; both host tournaments and teams for games such as "Meda of Honor" and "Counter-Strike," among others. Mark executive director of iGames, said many gamint centers are seeing their businesses stabilize and learning abour how togrow them. But the secrety to success, according to Nielsen, is a locatiomn that offers the right mix of young people with disposable incomes.
Both Rivalution and Fusiohn Net Center are locatednear Pleasanton'ws two high schools, giving them easy access to the importanty after-school crowd. "The biggest thing I'j concerned about - from a franchisde point of view - is that the core ingredieng is not your paint job or how nice thecomputere are. It's all about the community," Nielsenj said. "You can't go around and set up centerw just because onedoes well.
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