As we know till this date, the gaming industry has only been exponentially increasing in terms of players, games and also prize pool. However, as games these days are requiring a higher specification gaming computer and also monitors that are capable of playing such games, many people tend to not be able to afford such devices in Malaysia.
Adding to that, there are some kids that are not as lucky as others to even have a computer. This business model also attracts students that have gotten themselves computers that are not capable of running such games. Therefore, to solve all these problems, we came up with a business idea which is to have an Esports hub, previously known as a cyber cafe. We plan to bring these Esports hub near to Universities and schools to cater to all the students that are not capable of playing games competitively or smoothly.
In this article, I will be sharing with you my observations on opening an Esports Hub in Malaysia:
- Information and Data of Esports Hub
- Pros and Cons of Esports Hub
- What are the demand and growth potential
- Startup Cost of an Esports Hub
- Potential Revenue of Esports Hub
- Potential Location of Esports Hub(in KL and Selangor)
- Monthly Cost of Esports Hub
- Risk of Esports Hub
Now let us begin with the summary of my observations & findings:
This is based on a small scale Esports Hub
| Contents | Observation |
| Demand | Medium to High |
| Competition | Medium to High |
| Startup Costs | RM 99,600 |
| Potential Revenue | RM 50,500 (average) |
| Potential Profit | RM 29,000 |
| Return On Investment (ROI) | Up to 4 Months (average) – IF BUSINESS IS AROUND 75% |
Information and Data of Esports Hub
There’s approximately 20.1 million gamers in Malaysia itself in the year 2020. That year itself those 20.1 million gamers in Malaysia spent an impressive amount totalling approximately $673 million dollars just solely on games. Similar to the car wash business, the market here is really huge too.
To be exact, the Esports Hub is not only an industry that have rising population and investment but it is also a new industry where it is counted as a SPORT. It is more popular than many sports in the world due to the fact that it is very interesting to watch, play and compete at the same time.
Here are some important information about Esports in Malaysia:
- Growing Popularity: Esports has been on the rise in Malaysia, with an increasing number of players, fans, and events. The country has a growing esports community, with a focus on games like Dota 2, League of Legends, Mobile Legends, and Counter-Strike: Global Offensive (CS:GO).
- Esports Organizations: Malaysia has several esports organizations and teams that compete in both local and international tournaments. Some of these organizations include Team SMG, Geek Fam, and Orange Esports.
- Tournaments and Events: Malaysia has hosted various esports tournaments and events, both domestic and international. Notable tournaments include the Kuala Lumpur Major for Dota 2 and the Malaysian Campus Esports Championship (MCEC) for college and university students.
- Esports Facilities: Esports facilities, known as esports hubs or gaming centers, have been established across Malaysia. These centers provide a space for gamers to play, compete, and socialize.
- Government Support: The Malaysian government has shown interest in supporting the esports industry. Initiatives include providing funding for esports events and recognizing esports as an official sport under the Ministry of Youth and Sports.
- Education and Training: Some universities and institutions in Malaysia offer esports-related courses and programs to train future esports professionals, including players, coaches, and managers.
- Streaming and Content Creation: Malaysian gamers and esports enthusiasts are actively involved in streaming on platforms like Twitch and creating content related to esports on YouTube. This has contributed to the growth of the local esports community.
- Community and Fan Base: Malaysia has a passionate esports fan base that supports both local and international esports teams and events. Esports gatherings and conventions are common, providing fans with opportunities to meet players and fellow enthusiasts.
- Sponsors and Partnerships: Esports organizations in Malaysia often seek sponsorship deals and partnerships with companies looking to reach the esports audience. This includes collaborations with brands in the gaming and technology sectors.
- Regulations: The Malaysian government has also introduced some regulations related to esports, such as age restrictions for participation in certain tournaments and guidelines for esports event organizers.
Pros and Cons of Esports Hub
Esports centers or shops in Malaysia, like similar establishments around the world, come with their own set of pros and cons. These can vary depending on factors such as location, management, and the specific services offered. Here are some general pros and cons:
Pros:
- Community Building: Esports centers can serve as hubs for the local gaming and esports community. They provide a physical space for gamers to gather, compete, and socialize, fostering a sense of community among like-minded individuals.
- High-Quality Equipment: These centers often provide high-quality gaming equipment, including gaming PCs, consoles, and peripherals. This can be beneficial for gamers who may not have access to such equipment at home.
- Competitive Gaming: Esports centers typically host tournaments and events, allowing local players to participate in competitive gaming and potentially earn prizes or recognition.
- Casting and Streaming Opportunities: Some centers offer facilities for casting and streaming esports events, providing aspiring casters and content creators with a professional setup to showcase their skills.
- Accessibility: Esports centers are accessible to a wide range of players, including those who don’t have gaming equipment or a stable internet connection at home.
- Social Interaction: These establishments encourage social interaction among gamers, promoting friendships and camaraderie.
- Support for Local Esports: They often collaborate with local esports organizations and teams, helping to grow the local esports scene.
Cons:
- Operating Costs: Running and maintaining an esports center can be expensive, including costs for equipment, rent, utilities, and staff salaries. These costs can lead to high prices for customers.
- Competition: In areas with multiple esports centers, competition for customers can be fierce, leading to price wars or financial instability for some businesses.
- Location Dependency: The success of an esports center is heavily dependent on its location. If it’s not situated in a populated or strategic area, it may struggle to attract customers.
- Sustainability: Some centers may find it challenging to maintain a steady stream of customers, especially during non-peak hours or when there are no major events or tournaments happening.
- Online Alternatives: With the rise of online gaming platforms and improved home gaming setups, some players may prefer to stay at home rather than visit a physical esports center.
- Technical Issues: Technical problems with gaming equipment or internet connectivity can frustrate customers and lead to negative experiences.
- Regulatory Challenges: Depending on local regulations and licensing requirements, setting up and operating an esports center may involve legal and bureaucratic hurdles.
- Market Saturation: In some areas, there may already be an oversaturation of esports centers, making it difficult for new businesses to gain a foothold.
In summary, esports centers in Malaysia, as in other places, have the potential to be valuable community spaces for gamers but also face challenges related to competition, operating costs, and changing gaming habits. The success of such establishments depends on factors like location, management, and the ability to adapt to evolving trends in the esports industry.
What are the demand and growth potential
As we have seen in the information and data summary, this market is an exponentially growing market. Specifically a start of a new era. In our own words it seems that this might be any peak or outburst of this industry similar to other sports in history. Following are the demand of Esports Hub in Malaysia :
- Rising Gaming Population: Malaysia boasts a growing population of gamers, encompassing all age groups and skill levels. The demand for esports centers arises from this diverse and passionate gaming community.
- High-Quality Gaming Infrastructure: Esports centers typically offer state-of-the-art gaming equipment, including powerful gaming PCs, consoles, and peripherals. Many gamers don’t have access to such equipment at home, making these centers an attractive option.
- Competitive Scene: Esports centers organize and host a variety of tournaments and events, catering to both casual gamers and aspiring esports professionals. The allure of competitive gaming and the potential to win prizes contribute significantly to demand.
- Community and Social Interaction: Esports centers foster a sense of community among gamers. They provide a space where players can socialize, make friends, and share their passion for gaming, which is a compelling draw for many.
- Educational Engagement: Educational institutions have recognized the educational and developmental benefits of esports, such as teamwork and strategic thinking. This has led to partnerships with esports centers, creating a new avenue of demand as students seek opportunities to engage in gaming in a structured and supervised environment.
Growth Potential of Esports Centers in Malaysia:
- Expanding Demographics: Esports centers are no longer the exclusive domain of hardcore gamers. Families view them as safe and supervised environments for children to enjoy gaming, expanding the customer base.
- Corporate Sponsorships and Partnerships: Local businesses are increasingly realizing the marketing potential of reaching the esports demographic. Consequently, many centers secure sponsorships and partnerships, providing the financial support necessary for expansion.
- Adaptability: Successful esports centers demonstrate adaptability to changing trends in the gaming industry. They continually introduce new gaming experiences, such as virtual reality (VR) and mobile gaming, to keep gamers engaged and curious.
- Government Support: The Malaysian government has acknowledged the importance of the esports industry and has offered support in the form of grants, incentives, and regulatory frameworks. This favorable environment contributes to the growth of esports centers.
- Community Engagement: Esports centers actively engage with their local communities, organizing charity events, esports boot camps, and educational programs. Such involvement not only strengthens their ties with gamers but also ensures long-term sustainability.
- Media and Streaming Opportunities: With the increasing popularity of gaming content on platforms like Twitch and YouTube, esports centers can tap into the growth of online streaming and content creation, further expanding their reach and revenue potential.
In conclusion, the demand for esports centers in Malaysia is driven by a passionate gaming community seeking quality gaming experiences, while the growth potential is bolstered by adaptability, government support, and corporate partnerships. Esports centers have evolved into essential cultural hubs that support local talent, foster community, and contribute significantly to Malaysia’s burgeoning esports scene. Their promising future lies at the intersection of gaming culture, technology, and community engagement.
Startup Cost of an Esports Hub
| Item | Estimated Costs | Notes |
| Rental | RM 22,500 | Assuming 3 months deposit @RM7500/month |
| Equipments | RM 57,000 | Products can be gotten from shopee |
| Renovation | RM 20,000 | Esports renovation including lights and deco |
| Marketing | RM 100 | Marketing such as instagram and ads |
| Total | RM 99,600 | This is just a prediction for a small Esports Hub |
The startup costs for an Esports Hub will be considered slightly higher because of the equipment needed and also the rental. The rental will definitely be high because in order for the Esports Hub to be profitable and survivable it needs to be at a very convenient location for the target audience.
With that said lets begin calculating the costs one by one to give you guys a more explained version of the costs.
Rental:
Estimate that our Esports Hub is at a location where the population is high and the rental is affordable.
This is a very good example because it is next to Sunway University and also very near to many other institutions such as Taylors University, Inti University, Sri KDU, Sri KL and much more. At this location, this place can expect to have a monthly population of 75%. At locations that are not this popular, the monthly population can go as low as 25%, with a 50% monthly population will be considered decent.
Required Equipments :
The most essential thing for a car wash business is the equipment, not just to have a successful car wash but a car wash that can actually operate. We need to have functioning and reliable equipment. For this business we are going to focus on affordable, reliable and efficient equipments.
| Item | Estimated Costs | Notes |
| Gaming PC | RM 2000 | Must be compatible with most games. (Custom) |
| Gaming Chair | RM 300 | We recommend brands like TT Racing in shopee or Other chairs |
| Gaming Keyboard | RM 100 | Must be reliable and most importantly mechanical keyboard |
| Gaming Mouse | RM 70 | Must be a decent mouse, wired is not a problem but must have low response rate |
| Gaming Headset | RM 130 | Can get some budget steelseries or razer headset, JBL is also pretty good |
| PS 5 | RM 2,500 | PS 5 with at least 4 joystick |
| Total | RM 5,100 | This is the estimated total |
| Total* | RM 57,000 | We need 20 PC Sets(RM 52,000) and 2 PS5 Sets (RM5,000) |
Our total equipment costs sum up to a total of RM 57,000. We tried to keep our equipment at the most value for money price. We expect to get warranty for our equipments because of the high price.
Equipments run down [COMING SOON]
Renovation :
We aim to have a very minimalist and gamer vibe kind of design, where it will be bright and dark at the same time. We need to have a very competitive setup and style following the Esports stadiums and setups.
Our renovation is very important because we aim to give our customers the feeling of being a competitive gamer or the feeling of Esports. Giving them a very relaxing yet competitive feeling to play games either alone or with friends.
Marketing:
We aim to have a simple marketing strategy scaling using instagram, facebook, google business and tiktok of course. Other than that we will use RM100 for ads campaigns to boost our business to allow more people to find us.
Quick tip for marketing: WE EXPECT TO HOST IN HOUSE COMPETITIONS
To learn more: contact ideas@mystartuplah.com , to inquire for tips and ideas on how to run a in house competition.
Potential Revenue of an Esports Hub
Our revenue scheme is very simple, we solely earn money from hourly gameplay. For our PC gaming we will need our customers to play at least 2 hours @ RM5/hr . I believe RM5 is the market rate for PC gaming and also for PS5 will be RM 25/hr because we can cater up to 4 players. Maybe we can have a more detailed pricing list to saturate the customers and gameplays.
We can also apply different price for different time. Basically something like Happy Hour or even like night time gaming being slightly pricier.
| Item | Potential Revenue | Notes |
| PC GAMING | RM 27,000 | RM5/hr @75% population monthly – 20 sets |
| PS 5 Gaming | RM 13,500 | RM 25/hr @75 population monthly – 2 sets |
| Food & Beverage | RM 10,000 | We expect to sell drink such as energy drinks and water. Can also collab with food shops |
| Memberships | ~ | This is only an idea and to use this we have to further plan and calculate |
| Total | RM 50,500 | This is just a prediction for a small Esports Hub |
Potential Location of an Esports Hub(in KL and Selangor)
We have only did our research on KL and Selangor.
For KL : [COMING SOON]
For Selangor : [COMING SOON]
Monthly Cost of a E-Sports Business
| Item | Estimated Costs | Notes |
| Rental | RM 7,500 | At an average place at most location available |
| Staff | RM 9,000 | This is a bit tricky, but we run part-time and full-time at the same time. |
| Electricity & Water | RM 3,000 | 600W for 75% population, + PS 5 and aircon. And some slight computer systems |
| Food & Beverage | RM 2,000 | Resell of F&B |
| Total | RM 21,500 | This is just a prediction for a small Esports Hub |
This might differ in different location and also what kind of custom power supply your computer is using. Our calculations is based on a 600W power supply for all of our PC and it must be using for 9 hours based on 75% population.
Risk of a Esports Hub
| Risks | Potential Solution |
| Machine Malfunctioning | Spare machines and equipments |
| Financial Risk | Always have a great cash flow |
| No electricity (unlikely) | Need a power supply to temporarily run for a few hours |
| Employees not turning up | Must have good pay for employees |
| Employees stealing money | Use only digital payments |
| Robbery | Have CCTV and do not keep cash |
| Damaging customers cars | Have proper training and need CCTV to keep recording the process |
| High Demand at a period of time | Have an external car bay to wash |
Should you just buy a business instead?
For this particular business, the answer is strongly NO. Reason being an old cyber cafe or Esports Hub will have old equipment not knowing whether it is upgradable, costly to upgrade or it doesn’t even work anymore. The monitors will be used and old some might not even be able to play at current competitive refresh rate.
The pros of buying a Esports Hub, maybe there will be returning customers but the location must be good.
The cons of buying a Esports Hub, just don’t do it. It is too risky, equipments must be new and taken care of to last and function well.
The decision will however still be yours, if you believe buying a cyber cafe and renovating it to be a different one, then of course you can do it. But in our opinion, you are better off starting a new one at a more desirable location
Key Takeaways:
An Esports Hub is a great business to pursue, the monthly revenue is extraordinary when you found a great location. It is greatly scalable as you can expand or add new equipments such as a racing sim, VR sim and much more
The effort to open this business is considered low. BUT every business has its own risk of losing all its money please do consider that too.
MUST READ :
All the ideas, calculations and predictions are just a mere understanding and calculations based on theories and case studies please do note that following exactly does not guarantee success but rather its just a helping hand and a guideline to success.
Our aim is always to have a faster return on investment and a high monthly income!
