Economic Environment of Business Assignment

Group 7
Shreyash Sinha- 2022B3A3PS1387H
Rishit Toshniwal- 2022B3A71814H
Koushika Kankanala- 2022B3A20771H
Business Idea Description:
In the ever-expanding world of gaming, our business concept revolves around establishing a gaming
cafe that serves as a hub for gamers. We will provide a comfortable social environment where
gamers can come together to play various video games. The gaming cafe will be equipped with the
latest gaming consoles, high-performance PCs, and a diverse selection of popular multiplayer and
single-player games, all within an air-conditioned area. Complementing the gaming experience, the
cafe will also offer a range of snacks and beverages, creating a unique and immersive social setting
for our customers.
Any new venture is created to solve specific problems. The gaming café would solve the following:

a. A common hangout area: Our campus has no dedicated area for people to sit and enjoy.
The mess is too noisy, and its primary function is to serve food. The lounges are too small
and not well facilitated. All such problems would be solved by our café, which would
become our customers’ go-to hangout spot.

b. Terrible Internet services: Our campus has somewhat shoddy internet coverage. The Wi-
Fi gives barely workable speed. We would provide an area where unrestricted Wi-Fi
services would be given for people to game.

c. Air-conditioned area: The only air-conditioned area readily available to students is the
library. However, only people with important work utilise the library due to limited
seating space. Moreover, silence is to be maintained. We would provide an area with no
prerequisites to enter, which would also help expand our market base as people would
come just to sit in an air-conditioned room.

Market analysis and strategy:

According to a study by NVIDIA,

78% of the gamers in India are in
the age group of 18-24, which is
precisely the age group on campus.
It is evidenthat our product has the
perfect market.
This will also be a relatively long-
term business to generate profit.
Initially, we will have to provide
offers and deals and host promotional events, running at break-even or even a loss for some time to
acquire customers. This would be essential for a large customer base to visit regularly. According to
data, 53% of gamers visit cafes regularly. This draws us to a consensus that once any gamer visits
an interesting, engaging cafe, they will most likely become a daily/ weekly visitor.

Product and services description:

Various things need to be done right to make

the idea successful. Of course, equipment and
hardware are the highest priority here, followed
by having an excellent library of games.
Ambience and food & beverages are also
significant to retain the customers.
So the aim would be to have all these things
spot on.

Revenue model:
The two primary and regular sources of revenue
would be:
1. Game time
2. F&B.
Game time is the primary and the most important source of revenue. We would charge rates.
Discounts on committing to a longer time would increase the average transaction cost.
Food and beverages are one of the most popular secondary sources of revenue. Gamers come to the
cafe to play games and, while on the go, relish themselves with food & beverages, contributing
heavily to our upsell revenue.
Some other ways to generate revenue would be:

• Hosting tournaments- This can also be a source of revenue with many gamers participating
in the tournaments—an excellent opportunity for a cafe based in a college because friends
like to compete.
• Advertising space and sponsors- Gamers who are in the age group of 18-24 years are the
prime target audience for many brands. This allows for selling advertising space in cafes.
Many brands do so by sponsoring tournaments.
• Providing a space for test audiences-Companies are willing to pay significant amounts of
money for test audiences for a new product. Being based in a college, we would provide
them with the perfect demographic and also provide students with the opportunity to play
games before their release, thus adding to our appeal.
Promotion Strategy:
• Social Media Campaigns: Leverage platforms like Instagram, Facebook, and Twitter to
showcase the gaming cafe's ambience, announce special events, and engage with the gaming
community.
• Word of mouth - 72% of gamers visit cafes with their friends, which shows us that gamers
are peer influencers. Understanding gamers and satisfying their needs is essential to leverage
word-of-mouth promotion for the cafe.
• Frequent tournaments: Frequent tournaments with a low participation cost and a high reward
in various popular games would be held to retain the current user base and attract new users
as well.
• Loyalty Programs: Introduce a loyalty program to encourage repeat visits and reward
frequent customers, enhancing customer retention.

Analysis of Internal and External Environment:

Strengths:
• Unique Concept: The gaming cafe introduces a novel concept, attracting gamers looking for
a social and immersive gaming experience beyond room setups. It would also have no
competition, considering no such services exist on the campus currently.
• Variety of Games: Offering a diverse selection of games for different platforms caters to a
broad audience, ensuring a dynamic and inclusive gaming environment.
• Snacks and Beverages: Adding a food and beverage section creates an additional revenue
stream and enhances the overall customer experience.
• Scope for broader customer base: Gamers around the area outside the campus are also a
potential customer base. Once popular enough, they can also become a significant part of the
revenue stream.

Opportunities:

• Community Events: Hosting gaming tournaments, events, and leagues can attract a larger
audience, fostering a sense of community and encouraging repeat visits. Moreover, a culture
would be developed to improve the college morale as a whole. Screening the final matches
of these tournaments would invite a large crowd consisting of friends of people participating
and gaming enthusiasts.
• Partnerships with Game Developers: Collaborating with game developers for exclusive
releases or promotions can generate excitement and set the gaming cafe apart. Moreover,
additional revenue would be generated as we would provide a platform for companies to test
out their new games.
 • Online Streaming Integration: Offering dedicated streaming stations for gamers interested in
broadcasting their gameplay can attract a broader audience and enhance the cafe's online
presence.

Weaknesses and challenges:

• High Initial Investment: Setting up the gaming cafe with quality equipment involves a
substantial initial investment.
• Technical Issues: Technical problems with gaming equipment may arise, leading to
downtime and potential customer dissatisfaction; hence, a robust technical support system is
essential. Moreover, rapid advancements in gaming technology may require constant
updates to stay competitive, necessitating a flexible business model.
• Seasonal business: The cafe would experience a significant decline in visitation around the
time of the mid-semester and comprehensive examinations. A possible solution to this could
be to convert the gaming cafe to a lounge where people can use the PCs, comfortable chairs,
refreshments and air conditioning for studying during these weeks. A weekly membership
for the same could be a revenue source in such times.
• Permissions: Setting up a gaming cafe would probably require a lot of permissions from the
administration office, who might think of it as an unnecessary addiction and distraction for
students. However, such an establishment would become crucial in improving the mental
and social well-being of a wide range of students.

• Licensing and Regulations: Adhering to gaming and entertainment regulations is crucial,

posing potential challenges in compliance.

Conclusion:

The gaming cafe business presents an exciting opportunity in the thriving gaming industry. To
ensure long-term success, we will focus on creating a unique and welcoming space, staying updated
with gaming trends, and actively engaging with the gaming community. Addressing challenges
proactively and adapting to technological advancements will be crucial for establishing the gaming
cafe as a go-to destination for gamers of all backgrounds.
Moreover, by providing a relaxing space, we would also target the non-gaming audience through
our ambience and services.

By fostering a sense of community, embracing innovation, and providing an exceptional gaming

experience, the business is poised to thrive.