A Brief History of Computer Shops in the Philippines
There are two key locations in the formative years of most Pinoy males: basketball courts and Internet cafes. And while public basketball courts have no doubt experienced some form of evolution since the Americans indoctrinated us in the 1900s, it's still basically cement floors and a hoop—net optional, of course—so let us look at the evolution of the Internet cafe instead. From neighborhood comshop to the modern mega franchise, we travel back in time to see how the industry became what it is today.
199X - The days of dial-up and CS 1.3
“Dati, sa sampu mong kaklase sa eskwelahan, mabibilang mo na dalawa dyan nagko-computer, walo dyan nagba-basketball,” Ronald “Rhom” Robins, the founder of Mineski, recalls. “Yun ang uso eh. ‘P’re, sabado, ano tara basketball tayo!’ Yung iba, tahimik na lang—'Tara punta tayo sa shop.' Ngayon baliktad na. Dalawa na lang ang nagba-basketball, walo sa computer shop na. It’s accessible, fun, cheap, di kailangan matangkad, mabilis lang ang utak.”
"While Internet cafes were ostensibly for browsing the Internet, it was the opportunity for online and LAN gaming that drove their explosive expansion"
This was something he shared with us when we spoke to him about the rise of e-Sports for an FHM Philippines magazine article back in 2015. Rhom did not specify when exactly he was talking about, but to continue with the basketball narrative, the rise of the Internet cafe in the Philippines roughly coincided with Michael Jordan declaring “I'm back” in 1995.
While Internet cafes were ostensibly for browsing the Internet, it was the opportunity for online and LAN gaming that drove their explosive expansion. Netopia, widely remembered as the Internet cafe for anyone already alive back then, opened its first public branch in Katipunan back in 1997 before becoming a ubiquitous sight in the following years. They were the biggest name in the industry for a long period of time, but it doesn't mean Netopia was the first Internet cafe in the country ever—even we aren't sure what was—and they weren't even the first along Katipunan. That honor would fall to Blueskies Katipunan, although it was technically [email protected] back then.
Herbie Yuchioco, Blueskies Katipunan's owner, shares that, “Our business was really automotive spare parts. The Internet cafe was just a hobby that also grew into a business. Initially, we had Macintosh PCs sa cyber cafe. Ang browsers namin IE and Netscape Navigator—there were no games.” It didn't take long before Yuchioco added gaming to their offered services: “Siguro 1995, one year after.” The unused second floor was set up with computers to run LAN games such as Warcraft, Diablo, StarCraft, Red Alert, and Command & Conquer.
Based on word of mouth and flyers, Yuchioco says, “Napuno naman agad.” His partners at [email protected], however, wanted the place to remain strictly a cyber cafe. “Kasi medyorowdy yung crowd, mga Ateneo high school and grade school, so we transferred there [nearby] sa 23 Dela Rosa.” Then after '97, the partners of [email protected] wanted to give up the business and Herbie was able to move back into the original location—and this is why Blueskies's FB page proudly states “open since 1997.”
Herbie recalls that competition quickly intensified. “Siguro, P50 per hour for gaming [back then]. And when it proved to be popular, maraming nagtayo and they started dropping the prices so it was a price war. 1999 or 2000, around that time P20 na and ang ang pinakamura siguro was P15 per hour.”
At roughly the same time, Netopia was experiencing red-hot growth. In 2004, the company was majority-owned by PLDT and, with their financial backing, had hit a milestone 100 branches nationwide. “You have to stay competitive. You have to keep customers coming in. So you offer long hours with a huge discount. Almost 60 percent, so ang hour nila nagiging P15 to P10 per hour. But today because mas mahal na mga hardware requirements, you have to offer a price that customers feel comfortable with.”
In Herbie's experience, having survived those days of price cuts and the explosion of those iconic yellow franchises, the biggest threat to an Internet cafe is simply other Internet cafes. “[Now there’s] TNC, tapos yung Mineski, tapos Techtite. So mas marami na yung competition, but madami pa ring players. The market is really big so there's really enough players, but minsan bumabagal kase syempre may tumabi na malakas, higher specs.”
In 2017, the latest internet cafe along Katipunan, Techtite E-Sports Lounge, opened nearby and forced an earlier than expected tech upgrade at Blueskies. “Humina kami a bit cause some customers moved so we were forced to upgrade.” Usually, Herbie follows a three-year schedule for upgrading—section by section—to run demanding games. But when it comes to the current hot topic, e-Sports and those eye-watering prize pools, it's where Herbie admits to being behind the cycle, so to speak. “Wala kaming e-Sports so that's my problem. Someone old like me, I didn't concentrate on e-Sports. I just concentrated on providing quality games and quality experiences.”
200X – e-Sports and Internet Cafe 2.0
In 2007, Netopia had started to experience losses and a serious decline due to over-expansion—including an attempt at branches overseas. Meanwhile, this was the time that the current kings of the industry—names that have become synonymous with e-Sports—began to carve out their respective brands: Mineski Grounds opened along Taft Avenue in 2008; while TNC opened in 2007, which was all by accident according to Eric Redulfin, founding chairman of TNC.
“Ang major business namin was more on selling of computers," he explains. "So ang kwento niyan, parang may mga parts na hindi kinuha and we experimented on them instead na ibenta. Ang technology kasi, ang bilis—pagka binili mo ngayon, after three months medyo bagsak na presyo. Swerte mo kung tumaas.”
Eric's experiment started with just four computers at N. Roxas in Quezon City and after it proved successful, his friends approached him for permission to open more Internet cafes using the name he came up with: The Net.Com, which later on evolved into simply TNC.
“Dumami siya. Tapos we opened it to public franchise nung 2012.” And simply having better stuff than your competition was a proven recipe for success yet again. TNC utilized a tech level advantage to stand out in the early days: “Before, kaya medyo famous kami sa University Belt kasi we had LAN via Fiber Optic. DotA palang uso nun and interconnected lahat ng branches namin sa University Belt—kami lang may ganun.”
Finding 10 people to start a DotA match was a legitimate issue: it was either play with 10 friends or hope you could set up a game with enough strangers playing in the same cafe as you.
“Eh ito ang dami, more or less na sa 1,000 computers nakakabit . So kung mag-create ka, daming sasali sa'yo kase madaming nagaabang.”
At the same time that TNC (and Mineski) were expanding, PLDT sold off their stake in Netopia in 2010. They've since revamped their image as well, having traded the iconic yellow sign for something more modern. They're still around, but a long way off from their glory days, and definitely unable to join in the biggest boost to the industry since it started: the rise of e-Sports. (FHM.com.ph reached out for an interview with Netopia but they declined to participate.)
“Tapos diba after that [2012 expansion] medyo lumakas na yung e-Sports?” Eric asks rhetorically. He believes that e-Sports is here to stay, hence TNC having Pro Teams in several games and the expansion of TNC into TNC Philippine Holdings Inc.—it's not just about Dotahans anymore. But that doesn't mean he's slept on reaching the next level of the Internet cafe itself, having experienced the same price war that Herbie went through, he went ahead on a bold experiment.
“Yung traditional Internet cafe, parang the usual business. Pag dumadami yung business, nagbababaan ng price.” Eric’s solution: evolve. The business is no longer just an Internet café, but a place where food and beverages are served as well. High Grounds Cafe, TNC's swanky Internet cafe that actually has legit coffee for its patrons, opened in 2017 and is what Eric believes is a model for the future.
During a trip to China for research, he saw the same problem affecting local cafes, but it also served as an inspiration. “Madaming computer shop, malalaking computer shop. Nagbababa ng presyo. Tapos yung iba doon naglagay na din ng food and beverages.” Eric wanted food that wasn't on the level of “ate, isang pansit!” yelled from your chair though. “Ang ginawa ko,inspired by three different big cafes in China. Yung High Grounds, pinagsama-sama ko lahat ng magaganda. It’s a hybrid cafe.”
“Madaming di naniniwala [in High Grounds], so sabi ko, 'Sige itayo natin yan.' Dapat nga P150 per hour ang lalagay ko doon eh! Pero instead, naging P100.” To differentiate HG from every other Internet cafe, Eric made it truly high-end through the food and beverages. HG's food isn’t basic, with prices that will make you want to seek out a serving of pansit from ate instead, and the per hour rate is far from P15 offers but it's still a profitable establishment. “Actually, when I studied it, 30 percent lang yung sales coming from the Internet cafe. Majority talaga sa FnB.”
Eric also acknowledges that its success comes from being unique—for now. “Kaya lang siya naging okay kasi kakaiba. Wala naman ganyang concept sa atin eh—yan lang sa ngayon.” It's indeed one of a kind—probably the only Internet cafe where you'll regularly see high-end sportscars parked outside of the establishment—and takes advantage of the fact that those gamers who started in the ‘90s now have jobs and income to burn.
20XX – The future
TNC has 160 branches nationwide and even High Grounds franchises in Indonesia and Malaysia. “Gusto kasi namin gumawa ng brand that is ready for franchise. Kasi kung titignan mo yung cyber cafe, yung lifespan ng business, kung di ka mag-iipon or mag-u upgrade, mamamatay business mo. Hindi katulad ng FnB pag nakagawa ka ng magandang concept, pwede na siya.”
So, aside from hybridization, does Eric also agree that the biggest challenge to an Internet cafe's longevity is simply staying ahead in terms of technology? “Oo. Technology kasi once di ka nag-upgrade, your business becomes shaky.” But he's not resting on the High Grounds concept's success either—he just recently had a soft-opening for Ground Zero in Antipolo, a new business expansion. “Completely different siya. May bar to, tsaka karamihan ng menu namin nakapangalan sa mga different games. Sarili na naming concept to.”
Meanwhile, when asked about what the next 10 years could hold for the two-decade strong independent Internet cafe he handles, Herbie is optimistic: “Another 10 years? Baka another branch.
The story of Blueskies and TNC may be very different, but they both show that Internet cafes can stand the test of time and competition—whether it's a mom-and-pop operation or part high-end dining experience—if their owners believe in the same sound practices: Stay on top of tech requirements and give customers their money's worth whether they're ponying up P40 or P100 an hour. And it's to the industry's advantage that, as Rhom said in the beginning, the Internet cafe is really just an integral part of today’s gamer experience.
A good way to illustrate that is through current fave PUBG. Unlike other games available at Internet cafes, it requires a user to purchase their own copy of the game on their own account, meaning they could totally have played it at home instead. Yet Herbie says it's the second-most played game at Blueskies: “[It surprised me] because you can play it at home pero iba rin kasi kung may kasama ka physically. Mas maganda pa rin eh.”
This story originally appeared on FHM.com.ph.