How to Make Money through the Video Games Business in Kenya

You could be wondering whether video games is still a profitable business in Kenya today. Well, it is. Despite the increased access to video games through mobile phones, many kids still like to go out and play the latest games with peers.

Gaming is fast becoming a popular pass-time activity in Kenya; and since most people cannot afford to buy and maintain private gaming consoles at home then you can capitalize on this opportunity to launch a small business.

One good thing about setting up a gaming lounge is that you don‘t need to a lot of pre-training to get the wheels of the business rolling.

A strategic location and ability to keep up with trends are the two most important qualities required in order to conquer the market. Here is a step-by-step guide (inclusive of capital breakdown) that will help you get started.

The Steps to Start a Profitable Video Games Business in Kenya

If you follow the following steps carefully, you can make your video games business successful within a short time and with low budget.

Step One: Choose a Good Location

Your choice of location can either make or break your business. Previously, a location in the Nairobi CBD would have been highly recommended but nowadays there are too many outlets there and competition is cut-throat. Consider looking for a cheaper location, preferably near an upcoming college/university.

Think of areas like Chuka (Chuka University), Kabianga in Kericho, Karatina near Karatina University, Chepkoilel near Eldoret, Machakos near Machakos University and so forth. If you are near Nairobi then a location near an upcoming college branch (campus) in the estates is highly recommended.

Step Two: Carry Out a Small Market Survey

Market research is nothing really complicated. You can for instance create a short questionnaire form and request a few people in your locality to share their expectations with you. If you get an overwhelming response – say 70% YES – then that means there is widespread interest in the market and therefore higher chances of survival. On the other hand if you get a 15% acceptance rate, then such a market would probably be difficult to survive in and you might want to keep off.

Step Three: Rent a Room and Polish It Up

Look for a 50 square feet room, one that can accommodate several machines, chairs and still leave some space for future expansion. The average rent price for such a room is about Ksh.5,000 with a deposit amount of a similar amount. If you don‘t have a lot of money to spend, avoid going for rooms where landlords ask for a good-will payment. Lastly, bring in a carpenter and let him do his job (this will typically cost you around Ksh.10,000).

Step Four: Shop and Buy Equipment

Basically you will require a minimum of one 21 inch colored TV. You can get a new one for as little as Ksh.25,000 in places like Luthuli Avenue in Nairobi or in top supermarkets countrywide. 32 Secondly, you will need gaming units like consoles, pads among other accessories. The cheapest gaming unit on the market currently is Playstation 2 which goes for Ksh.10,000.

Playstation 3 and Xbox 360 cost about Ksh.40,000 each. Note: There are two main categories of gaming units i.e. chipped and unchipped. Chipped ones have their lenses changed in order to read a wide variety of DVDs. Unchipped ones only work with original DVDs copies only. Be sure to ask your vendor for a clarification on consequences of owning chipped vs unchipped gaming equipment.

Step Five: Get Your Licenses

These are the licenses you need to get started with your video game business:

  • Single Business Permit: Issued by County Governments. Cost may vary from one county to the other.
  • Music Copyright License: You will need this license if you‘ll be playing music in your premises.

If you are planning to open the business within the boundaries of Nairobi County, then you should be prepared to set aside at least Ksh.35,000 for licenses. In Kajiado County (areas like Ongata Rongai, Kitengela, Ngong, Kiserian etc), the charges are cheaper and you can set aside Ksh.15,000 for this cost head.

Step Six: Market Your Business

Attracting new customers (and retaining them) is another area that needs to be taken care of. 50% of the battle is won if you find a prominent location with enough footfalls. The other 50% is won by coming up with good marketing strategies e.g. in-house tournaments, pamphlets, opening offers & discounts among others. Your typical target market will consist of male students, teenagers and working class people aged up to around 30 years.

How Much To Invest

The overall cost of starting a small gaming business is Ksh.80,000 (Start small and keep reinvesting your profit for 6 months).

How Much To Expect

A fully-fledged gaming lounge with 4 TV screens can rake in about Ksh.3,000 per day or roughly Ksh.60,000 net profit per month.

Concluding Remarks

The main advantage of starting this business is that you can start small and grow big in a short period so long as you are prepared to sacrifice for some time. You can even expand your business to further accommodate things like: movie shop, DJ classes & lessons, event management, audio and video production and so forth.

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