Data provided here comes from our team of experts who have been working on business plan for an esports bar establishment. Furthermore, an industry specialist has reviewed and approved the final article.
How profitable is an esports bar establishment, and what is the typical monthly revenue for such venues?Let's check together.
Revenue metrics of an esports bar establishment
How does an esports bar establishment makes money?
An esports bar makes money by selling food, drinks, and merchandise, as well as hosting tournaments and other events.
What do esports bar establishments sell exactly?
Esports bar establishments primarily offer a unique and social gaming experience centered around competitive video gaming, also known as esports.
These venues typically provide a comfortable and vibrant space equipped with high-quality gaming setups, including powerful computers, consoles, and peripherals like controllers and headsets. Customers can rent time on these gaming stations to play popular esports titles individually or with friends, fostering a sense of camaraderie and competition.
Esports bars often host organized tournaments and viewing parties for major esports events, where patrons can watch professional players compete on large screens while enjoying food, drinks, and snacks from an extensive menu.
The menu typically includes a variety of alcoholic and non-alcoholic beverages, pub-style food like burgers, wings, and finger foods, creating an atmosphere reminiscent of traditional sports bars but tailored to the gaming community.
This allows patrons to socialize, engage in friendly gaming battles, and immerse themselves in the exciting world of esports within a dedicated and energetic environment.
What about the prices?
An esports bar establishment offers a variety of items on its menu, catering to different tastes and preferences.
The prices can vary depending on the type of item and the quality of the offering.
Generally, non-alcoholic beverages like soft drinks, energy drinks, and water might range from $2 to $5 per serving. Snacks such as nachos, popcorn, and fries could fall within the $5 to $10 range. More substantial items like burgers, sandwiches, and pizzas might be priced between $10 and $20.
Alcoholic beverages such as beers and cocktails could span from $5 to $12 or more per drink. Specialized menu items, premium drinks, or combo deals might exceed these ranges.
| Item | Price Range ($) |
|---|---|
| Non-Alcoholic Beverages | $2 - $5 |
| Snacks | $5 - $10 |
| Burgers, Sandwiches, Pizzas | $10 - $20 |
| Alcoholic Beverages | $5 - $12+ |
| Specialized Menu Items | Varies |
What else can an esports bar establishment sell?
In addition to offering a variety of gaming experiences and items, esports bars can also boost their revenue by:
- Hosting special gaming tournaments or esports workshops
- Allowing esports teams or enthusiasts to use their space for practice
- Assisting customers with gaming and streaming setups
- Organizing exciting gaming challenges or competitions
- Renting out space for private gaming events or streaming sessions
- Teaming up with local gaming companies for exclusive gaming deals
- Offering online gaming tutorials and virtual events for remote participants
Who are the customers of an esports bar establishment?
Esports bars cater to a wide variety of customers, from casual spectators to hardcore gamers.
Which segments?
We've made many business plans for projects like this. These are the groups of customers we usually see.
| Customer Segment | Description | Preferences | How to Find Them |
|---|---|---|---|
| Casual Gamers | Individuals who enjoy gaming casually and socializing. | Fun, accessible games; casual competitions; social atmosphere. | Social media ads, local gaming communities. |
| Hardcore Gamers | Dedicated gamers seeking competitive gameplay and challenges. | Tournaments, high-end gaming setups, esports events. | Esports forums, gaming events, partnerships with esports teams. |
| Students | High school and college students interested in gaming. | Affordable prices, study-friendly environment, gaming breaks. | Partner with nearby schools, student discounts, social media. |
| Working Professionals | Adults looking for a place to unwind and connect over games. | Comfortable seating, after-work hours, networking opportunities. | Local business partnerships, professional networking groups. |
| Stream Enthusiasts | People who enjoy watching live game streaming. | Large screens, reliable internet, streaming events. | Engage with popular streamers, host streaming parties. |
How much they spend?
Exploring the financial dynamics of an esports bar requires us to delve into the specifics of customer spending habits and engagement within this particular entertainment sphere. Customers at an esports bar generally incur expenses that span various categories, including but not limited to beverages, food, and possibly, time-based gaming fees. On average, a customer is likely to spend between $25 to $70 per visit.
Frequency of visits per customer can greatly vary based on personal interest in esports, social aspects, or event schedules; however, a good range to consider is that a dedicated customer visits from 1 to 4 times a month. It's essential to factor in special events, tournaments, or promotions that can significantly affect these numbers.
Given these variables, calculating the lifetime value of a customer demands we consider a reasonable time frame that a regular patron might maintain their visits. Considering the esports industry's dynamic nature and event-driven environment, we might forecast a consistent customer engagement for about 6 to 24 months. As such, the lifetime value of an average esports bar customer would be in the range of $150 (6x25) to $6,720 (24x70x4), considering the higher end includes those who come in several times a month during this period.
With a blend of the casual attendees and the dedicated, frequent visitors, it would be reasonable to infer that an average customer could contribute around $1,500 in revenue to an esports bar over their patronage duration.
(Disclaimer: the numbers provided above are averages and estimates, intended to present a hypothetical scenario. They may not precisely reflect specific business cases and are subject to the influence of various external factors, including economic conditions, competitive environment, and market trends.)
Which type(s) of customer(s) to target?
It's something to have in mind when you're writing the business plan for your esports bar establishment.
The most profitable customers for an esports bar establishment are typically avid gamers aged 18 to 35 with disposable income and a passion for competitive gaming.
These customers are likely to spend more time at the bar, engaging in extended gaming sessions and socializing with fellow gamers. They contribute significantly to revenue through the purchase of food, drinks, and gaming-related services.
To target and attract them, the esports bar should leverage social media platforms and online gaming communities to promote special events, tournaments, and exclusive offers. Creating a vibrant and comfortable gaming environment with high-quality gaming equipment, a variety of popular games, and regular esports tournaments will also appeal to this demographic.
Retaining them involves fostering a sense of community through loyalty programs, member perks, and personalized experiences. Regularly updating the gaming setup, staying attuned to the latest gaming trends, and actively seeking customer feedback will contribute to customer satisfaction and long-term loyalty.
What is the average revenue of an esports bar?
The average monthly revenue for an esports bar varies significantly, typically ranging between $5,000 and $50,000, depending on several factors such as location, capacity, and additional services offered. We will examine three different scenarios to provide a clearer picture.
You can also estimate your own revenue by considering various factors specific to your situation, perhaps using a financial plan tailored for an esports bar.
Case 1: A basic esports bar in a small town
Average monthly revenue: $5,000
This type of esports bar is likely a small establishment located in a less populated area, with limited resources dedicated to gaming equipment and ambiance. It's primarily frequented by a local clientele and has a maximum capacity of around 50 people at a time.
Due to budget constraints, the bar might not offer high-end gaming equipment or a wide variety of games, and the beverage and food menu could be fairly basic. Assuming an average spend of $20 per person and around 250 unique customers per month, the esports bar would generate $5,000 in monthly revenue.
Case 2: A well-equipped esports bar in a city's popular district
Average monthly revenue: $25,000
This esports bar would be in a busy urban area, attracting both gaming enthusiasts and casual visitors. With a stylish interior, quality gaming equipment, and a capacity for 200 people, it provides an immersive gaming experience combined with a diverse menu of food and drinks.
Additional revenue might come from hosting esports tournaments, themed events, or selling merchandise. If each customer spends an average of $40, considering both gaming and refreshments, and the bar attracts approximately 625 unique customers per month, monthly revenue would hit $25,000.
Case 3: A premium, cutting-edge esports bar in a major city
Average monthly revenue: $50,000
This high-end esports bar is likely situated in a prime location in a major city and stands out due to its advanced gaming technology, luxurious setting, and exclusive membership options. It caters to esports enthusiasts who demand a premium experience, as well as professionals and teams.
The bar might host official esports events, offer private gaming rooms, utilize state-of-the-art virtual reality equipment, and feature appearances from esports celebrities. The establishment could also provide a gourmet menu and a selection of premium beverages.
With a capacity for 300 people and assuming average spending is significantly higher due to the premium offerings — around $100 per person — this type of bar could attract roughly 500 unique customers per month (accounting for higher spending and frequent visits by dedicated gamers), leading to an impressive monthly revenue of $50,000.
It's important to note that these scenarios are simplifications and actual revenue can be influenced by a multitude of factors, including marketing strategies, operational costs, and the ever-changing preferences of the consumer market.
The profitability metrics of an esports bar establishment
What are the expenses of an esports bar establishment?
Operating an esports bar involves expenses for gaming equipment, licenses, staff salaries, rent or lease payments, and marketing.
| Category | Examples of Expenses | Average Monthly Cost (Range in $) | Tips to Reduce Expenses |
|---|---|---|---|
| Location Costs | Rent, utilities, property taxes | $2,000 - $5,000 | Consider a smaller space, negotiate rent, and optimize energy use. |
| Equipment | Gaming PCs, consoles, monitors | $2,000 - $5,000 | Buy refurbished or in bulk, upgrade gradually. |
| Furniture | Tables, chairs, couches | $1,000 - $3,000 | Look for second-hand or wholesale options. |
| Interior Design | Decor, lighting, theme setup | $500 - $1,500 | DIY or hire local artists for cost-effective decor. |
| Staffing | Salaries, benefits, training | $3,000 - $6,000 | Utilize part-time or seasonal staff, cross-train employees. |
| Licensing and Permits | Alcohol license, entertainment permits | $500 - $1,500 | Research local regulations, apply for necessary permits only. |
| Inventory | Food, beverages, gaming accessories | $2,000 - $4,000 | Minimize waste, optimize inventory management. |
| Marketing | Advertising, promotions | $500 - $1,000 | Focus on digital marketing and social media. |
| Insurance | Liability, property, workers' comp | $500 - $1,500 | Compare insurance providers for best rates. |
| Maintenance | Repairs, cleaning, maintenance contracts | $300 - $700 | Perform regular maintenance to avoid major repairs. |
| Software and Subscriptions | POS systems, gaming licenses | $200 - $500 | Look for bundled software deals, negotiate licenses. |
| Contingency Fund | Unforeseen expenses | $1,000 - $2,000 | Set aside a portion of revenue for emergencies. |
When is a an esports bar establishment profitable?
The breakevenpoint
An esports bar becomes profitable when its total revenue exceeds its total fixed costs.
In simpler terms, it starts making a profit when the money it earns from customers, events, and other sources becomes greater than the expenses it incurs for rent, gaming equipment, televisions, salaries, and other operating costs.
This means that the esports bar has reached a point where it covers all its fixed expenses and starts generating income; we call this the breakeven point.
Consider an example of an esports bar where the monthly fixed costs typically amount to approximately $25,000.
A rough estimate for the breakeven point of an esports bar would then be around $25,000 (since it's the total fixed cost to cover), or serving between 625 to 1,250 customers per month, assuming they spend on average between $20 to $40 on food, drinks, and possibly game time.
It's important to understand that this indicator can vary widely depending on factors such as location, size, service fees, operational costs, and competition. A large, well-situated esports bar would obviously have a higher breakeven point than a small one that does not need as much revenue to cover their expenses.
Curious about the profitability of your esports bar? Try out our user-friendly financial plan crafted for esports bars. Simply input your own assumptions, and it will help you calculate the amount you need to earn in order to run a profitable business.
Biggest threats to profitability
The biggest threats to profitability for an esports bar establishment can include high operating costs, such as rent, utilities, and equipment maintenance, which can eat into profits.
A lack of consistent customer traffic, especially during non-tournament days or off-seasons, can also hurt revenue potential.
Competition from other entertainment venues or online gaming options might draw potential patrons away.
Licensing and legal issues related to broadcasting esports events, serving alcohol to minors, or copyright violations can result in fines or legal battles, impacting the bottom line.
Additionally, if the establishment doesn't effectively market itself to the gaming community and fails to create an inviting and immersive atmosphere, it may struggle to attract and retain customers, ultimately affecting profitability.
These threats are often included in the SWOT analysis for an esports bar establishment.
What are the margins of an esports bar?
Gross margins and net margins are key indicators used to gauge the profitability of an esports bar business.
The gross margin represents the difference between the revenue earned from customer expenditures on games, food, and beverages, and the direct costs involved in delivering these services, such as gaming equipment, food supplies, staff wages, and utilities.
Essentially, it's the profit remaining after subtracting the costs directly tied to the operational aspect of the esports bar, including things like game licensing fees, console depreciation, and tech support.
Conversely, the net margin encompasses all expenses the business encounters, including overhead costs like administrative fees, marketing, rent, and taxes, providing a comprehensive view of the esports bar's profitability.
The net margin reflects the actual profit by considering both the direct costs of service provision and the indirect costs of running the business overall.
Gross margins
Esports bars commonly have an average gross margin within the range of 70% to 80% due to high mark-ups on beverages and food.
For instance, if your esports bar generates $20,000 per month, your gross profit could be roughly 75% x $20,000 = $15,000, derived from the high revenue and relatively low cost of sales.
Let's illustrate this with an example:
Consider an esports bar with consistent traffic, each customer spending on average $50 between gaming, food, and drinks. If you have 400 customers in a month, the total revenue is $20,000.
The direct costs, including gaming maintenance, food supplies, and staff salaries, might sum up to $5,000 for that period. Thus, the gross profit equates to $20,000 - $5,000 = $15,000.
Here, the gross margin for the esports bar would calculate as $15,000 / $20,000 = 75%.
Net margins
Typically, an esports bar might expect an average net margin in the ballpark of 15% to 25%, contingent on various factors like location, rent cost, and operational efficiencies.
To simplify, if your esports bar has earnings of $20,000 in a month, the net profit might be approximately $3,000 to $5,000, correlating to 15-25% of the total revenue, after accounting for all operational expenses.
Continuing with our example:
If the esports bar's revenue stands at $20,000, and direct costs are $5,000, we then consider additional indirect expenses. These overheads, such as marketing, administrative costs, rent, and taxes, might total another $12,000.
Thus, the net profit would be calculated as $20,000 - $5,000 (direct costs) - $12,000 (indirect costs) = $3,000.
In this scenario, the net margin for the esports bar comes out to $3,000 / $20,000 = 15%.
As an entrepreneur, recognizing that the net margin presents a more realistic insight into your esports bar’s actual earnings is crucial. It incorporates the full spectrum of expenses involved, offering a clear financial snapshot for strategic planning and decision-making.
At the end, how much can you make as an esports bar owner?
Understanding that the net margin is your go-to indicator for profitability is essential in running a successful esports bar. It gives you insight into how much you're earning after covering all operational expenses.
The profit you make can significantly vary based on several factors, including your management skills, investment in quality equipment, and the overall customer experience you provide.
Struggling esports bar owner
Makes $2,000 per month
Starting an esports bar on a shoestring might mean compromising on advanced gaming equipment, limiting the variety of games, and having inadequate space. If your establishment earns just $10,000 in total revenue with these limitations, your financial struggles will likely keep your net margin squeezed to around 20%.
This would mean that at the end of the month, you'd only take home about $2,000 (20% of $10,000). This scenario represents a less-than-ideal situation for an esports bar owner, possibly making the business unsustainable in the long term.
Average esports bar owner
Makes $10,000 per month
If you're running a standard esports bar — decent gaming equipment, a good selection of popular games, and occasional esports tournaments — you could be looking at about $50,000 in revenue. You're putting in effort, definitely more than the bare minimum.
Assuming you manage your overheads reasonably well, you could achieve a net margin of around 30%. This scenario would leave you with a comfortable $15,000 (30% of $50,000) at month's end, a respectable figure that acknowledges your efforts.
Exceptional esports bar owner
Makes $70,000 per month
Now, if you're fully committed to the esports culture, investing in high-end gaming tech, hosting regular tournaments, selling quality refreshments, and perhaps even offering exclusive memberships, you could catapult your revenue to $200,000 or more.
Your dedication to providing an unparalleled customer experience, combined with strategic expense management, could improve your net margin to about 35%. This could translate to a very impressive $70,000 (35% of $200,000) in earnings each month.
This level of success is challenging but not unattainable. It requires a thorough business plan, a deep understanding of the esports community, and continuous engagement with your customer base to ensure their needs are met, and their expectations are exceeded.
If you envision reaching the pinnacle of esports bar ownership, it all starts with a comprehensive, well-thought-out business plan, and a passion for the gaming community you're set to serve.