Last April, E-Games completed its purchase for a 75-percent stake in Digital Paradise, the operator of the Netopia brand of i-cafés. Netopia’s network consists of 72 company-owned and 27 franchised branches strategically located in malls and high-traffic areas. In September of this year, E-Games further solidified their strategy with the purchase of Webworx Computer Technology Corporation, owner and operator of the CyBr brand of Internet cafes. This added an additional 23 i-cafes to E-Games’ retail network.
Last month, E-Games, a publicly-listed company, reported today a revenue of PhP337 million for the first nine months of 2011, a 155% increase from the PhP132 million posted for the same period last year. The notable rise in revenues is attributable to a 17% growth in game publishing revenue, and the consolidation of two brands of Internet cafes: Digital Paradise, Inc. (operator of Netopia), and Webworx Computer Technology Corporation (operator of CyBr). Earnings for the first three quarters also rose to Php51 million from Php1 million in 2010, representing a 5,000% increase.
Moving forward, E-Games looks to become the largest consumer Internet company in the country. Between the E-Games community of 16 million registered users, and the i-café business’ 2 million monthly visitors, the Company has one of the largest captive audiences in the Philippines. E-Games’ strategy calls for capitalizing on this growing user base by providing a unique experience in each of its i-cafes. E-Games aims to revolutionize this sector through further investment in other i-café brands, helping them upgrade their infrastructure by means of the Company’s expertise, and providing new products and services.
With the current unenviable status of small i-café owners, what could this strategy of E-Games mean to them? You might say that there are other distribution companies that you can rely on for the supply of games so E-Games current domination are not affecting your business. How about if E-Games will be able to convince those other game distributors to pass through them? Will this mean an online gaming business monopoly in the near future? Just asking.
As of now, on line gaming will be a viable venture for E-Games and other big gaming companies. But, sooner or later on line gaming will feel the pinch from parents and local government units which eventually succumb to pressure from concerned parents lobbying against the proliferation of i-cafes offering on line gaming.
ReplyDeleteWe are aware that majority of i-cafes customers are students most of whom are e-gamers. Those students who go to i-cafes for research, chatting, etc. are in the minority. Some LGUs are now making regular inspections of i-cafes due to increasing reports of student truancy.
Recently, I read somewhere of some study claiming the violent tendencies prevalent among young people engaged in too much on line gaming. In the event further studies will reveal such unsavory effects of on line gaming, expect the adverse reaction from the government and other sectors of society resulting to diminishing profitability in e-games firms.