December 15, 2004     Sunnyvale, California Since 1994
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Photograph by Jacqueline Ramseyer
Mark Cuerdon is co-owner of Euphnet Cyber Cafe with his father 'Mac.' Mark handles the technical aspects of the business while Mac takes care of the marketing.
Gaming business is a tough one
By Allison Rost
Over the past 14 months, nearly 21 gaming centers—businesses that host large numbers of computers featuring strategic games—have gone out of business in the South Bay. Several were victims of fires or buy-outs, but most just couldn't sustain enough revenue flow. In Sunnyvale, three centers have recently gone under, leaving just one center to navigate waters made murky by a base of online gamers that few have figured out yet.

It's difficult to navigate without a map. And these relatively new businesses, which should be able to survive in the technically charged Silicon Valley, are discovering that fact just as their power switches are disconnected for the last time.

Euphnet Cyber Cafe is the last remaining Sunnyvale gaming center. It opened in Nov. 2002 in a shopping center at the corner of El Camino Real and S. Mary Avenue. More than two years later, owner Matt "Mac" Cuerdon and his son Mark own a second store in San Jose and have successfully weathered their second down season for gamers.

"When school starts, the college kids leave town, and for teenagers whose parents have to pay [for them to play games], they're spending their money on school supplies and calculators. Business drops about 40 percent, and it could put you underwater for several months," Cuerdon said.

Recognizing these trends has helped Cuerdon stay afloat, he said. "Overall, most game centers don't understand the industry they're in. I'm in the entertainment industry, not the high-tech industry. Others fail because they thought all they had to provide was [the game] Counter-Strike," he said.

But he said there's more to this business than understanding the games.

For instance, when Indico Gaming first opened off of Lawrence Expressway last year, owner Phil Alampi said he was trying to find success by appealing more to adult gamers instead of the teenagers who typically engage in combat online. "The gaming industry is growing, but in reality, they're a small percentage of the market," he said in a 2003 interview with The Sun. "We decided to go after the ones who make the decisions instead of the ones who have to bum the money off of their parents."

That decision, Cuerdon said, was the wrong one, and is reflected in Indico's closure earlier this year. "Those [gamers] are married, they have kids," he said. "The people who come here are the ones who don't want to stay home." His San Jose center is located near Santa Teresa High School, so many customers are students who drop by as they leave campus—60 percent of his business occurs before 6 p.m.

In gamer world, that's practically the crack of dawn. Cuerdon said that understanding the culture is key to a gaming center's success. Euphnet's hours stretch into the early morning, though they will soon expand to accommodate an expected recovery from what Cuerdon characterizes as the three-month back-to-school lull.

Euphnet also hosts all-night LAN parties every few weeks—giving gamers the chance to socialize with their peers and compete at all hours of the night.

But Cuerdon also makes sure not to take the gamer environment too far. While Indico used corrugated metal and concrete floors to create an industrial look, Euphnet looks more like a residence, with windows in the walls that separate room from room. "We wanted Euphnet to feel like a home. We use wood, leather, cloth—people feel comfortable with organics," Cuerdon said. "It's a contrast to the starkness of the computer screen."

The rest of Euphnet's environment—throbbing music, big screen television, sugar and caffeine for cheap prices—favors the gamers' needs. But Cuerdon said that the fact that those details equal success so far was almost purely an accident. "Game centers have only been around five years," he says. "We're not failing, but it's all still shaking out. No one knows what the successful model is yet."

In fact, gaming centers in general haven't made much of an impact yet on the local business community at all. "It's not really something that's on our radar screen," said Suzi Blackman, CEO of the Sunnyvale Chamber of Commerce.

Cuerdon, who lives in Mountain View, placed Euphnet in Sunnyvale after driving up and down a five-mile stretch of El Camino Real and looking for vacant spots. He got the idea for the center after visiting his son Mark in Southern California and seeing how successful one was there. Mark, who was Excite's youngest employee ever when he got an after-school job there at the age of 16, provides the technical support at Euphnet, while his dad looks after the business side.

Euphnet is even named after Mark's first online handle—euphoria. "It's like I'm a kid in a candy store," Mark says about his job. And with three high schools nearby and special events that nearly sell out every time, father and son hope the euphoria doesn't run out any time soon.

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