When Jeff Torello opens his new business in Cary next month, he'll be making a six-figure gamble on the future of the video game business.
He'll be doing it in a time when consumers are spending less on entertainment and in a year when video game sales have dropped 14 percent so far.
But he says he's confident his RUaGamer business has the potential to succeed.
RUaGamer will be a 4,000- square- foot emporium of video gaming, kind of like a Dave & Busters but solely dedicated to video games.
Kids and adults will pay to play by the hour, as much as $6.
They'll be able play one of 32 Xboxes, each linked to its own HDTV, or get up on stage and play Rock Star on a 120-inch TV with their friends. Or they'll be able to run around a tennis court-size area and play doubles Wii tennis on a jumbo screen.
"The point of a LAN gaming center is not so much playing the game," said Torello, 39, who lives in Holly Springs. "The value is really the social interaction."
LAN gaming centers, named after the local area network computer connection that fuels the machines, have been popping up across the country for years. But as video games become popular with a wider range of people, the potential for LAN centers has also expanded.
As a result, LAN centers have grown in size and popularity, with some like RUaGamer trying to capture the family crowd as well as teens. Torello also plans to target senior centers who may want to patronize the business during the normally slower day-time hours, and create Wii bowling leagues.
"It's kind of like a pool hall," he said. "The larger we're able to make it, the more stations we can have, the more that social dynamic and the interactivity grows."
When RUaGamer opens, it will be the Triangle's largest LAN center, roughly twice the size of GameFrog, probably the best-known local center.
But Torello said the large building and its large overhead doesn't scare him. With a background in engineering and architecture, he said he's used to looking for something that will be new to a market.
"I've been to game centers in the past," Torello said. "I always thought it would be a really cool business to operate. With the economy being where it was, retail space was available and could be negotiated."
Surviving in the LAN center business is not easy, said Mike Gaines, CEO of LifeGaming Inc., the parent company of GameFrog.
At one point, GameFrog operated four stores in the Triangle but now has just one, at Northgate mall in Durham. It also has stores in Winston-Salem and Charlotte.
"Traffic has dropped off 40 percent in the last year and a half," he said. "Startup is a big challenge. You have to have a lot of money. It can cost $10,000 in the games for the start of a new store. [Altogether], a small store can cost $20,000 to $80,000."
As traffic has declined, GameFrog has started branching out into new lines of business, including Xbox repairs. "Since we started about a month ago, that's actually been about half our business," Gaines said.
The company is also investigating the business of building WiFi wireless Internet hot spots for shopping centers, Gaines said.
"If one of those ideas could take off, then I could see us being around for another 10 years," he said.
Still, there are definitely customers who look to LAN centers for the gaming experience.
Joseph Sanders, 18, said he drives the 23 miles from his home in Oxford to the Durham GameFrog once a week to play with his friends and also get access to better equipment than the pieces he owns. "There's nothing out where I live," he said. "A lot of people come from a longer way."
And the video game industry, while not supporting such businesses financially, does not discourage them.
"We allow them to use our games even though they're making repeated amounts of money on copies," said Mark Rein, vice president of Cary-based Epic Games. "If users go and play and have a great experience at a LAN Center, they're more likely to go home and buy our game."
Even though video game sales are down now, that's probably temporary, said David Riley, an analyst that follows the toy and game industry for research firm NPD.
"It's a good time to invest time and money into the industry because the industry's poised to appeal to an even larger audience," he said. "The Beatles: Rock Band," for instance," was released this month. Though sales are down right now, Riley said, the video game industry is waiting for several big game releases at the end of this year and also tends to make half of its annual sales during the fourth quarter.
"A lot of those titles are multiplayer," he said. "And those are perfect for LAN centers."