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Startup Games2U brings the fun with mobile gaming station

February 29, 2008 by Sandra Zaragoza, Austin Business Journal

A new upstart with big franchise dreams has turned a customized 32-foot trailer into a temperature-controlled haven for Xbox 360, Sony Playstation 3 and Nintendo Wii lovers both young and old.

Games2U, a 2-month-old, Austin-based company, is like a high-tech video game arcade on wheels. Each mobile gaming theater is equipped with satellite television, HDTVs and outdoor screens. The unit accommodates up to 16 players inside, and up to eight additional players outside.

Inside the trailer, partygoers can play popular games, like Guitar Hero, Halo 3 and Call of Duty 4: Modern Warfare. The company has signed licensing agreements with the game manufacturers to use the games.

Although video games are the main attraction, the business also offers outdoor laser tag.

Games2U is the brainchild of entrepreneurial brothers David and Stuart Pikoff of Scottsdale, Ariz. Pikoff declined to disclose Game2U's startup costs, saying only that the business model attracted angel investment.

The Pikoffs both have track records in setting up their own businesses. David Pikoff founded a telecom company called DPI Teleconnect a decade ago, which he later sold to Rentway Inc. Stuart Pikoff is also a previous business owner, but most recently was an executive for Palm Harbor Homes. He continues to work in real estate.

Nowadays, the brothers are both busy establishing the business in Austin and aggressively marketing their new business to potential franchisees in 38 states.

A Game2U franchise will run about $177,000, including the custom Ford F-350 truck, game theater and operating capital. Pikoff says his short-term goal is to sell 50 franchise units.

Games2U is vying for attention in the children's entertainment market, which is dominated by brick-and-mortar players like Chuck E. Cheese and Dave & Buster's.

David Pikoff believes delivering the entertainment to the customer's home or business gives him an advantage.

"The event experience, the mobile part, is huge," Pikoff says. "The consumer response has been enormous, and we've only been on the road two months."

The business caters to boys ages 7 to 17. Parents typically book the mobile gaming unit birthday parties, Thursdays through Sundays. Games2U's weekday business has stemmed from schools, churches and corporations renting the mobile game unit for special events and team-building exercises. It has already been tapped for corporate team-building events at Dell Inc. and Cisco Systems Inc.

Phil Wilhite, managing director of Corporate Investment, an Austin merger and acquisitions adviser, points out that this is a new business without a history, so it may need to develop its market.

"It's a neat idea, but does it translate into a viable business that I can get a return from that is equal to my time and investment?" questions Wilhite.

Judging by early indicators like advanced bookings, Pikoff says, the business model has what it takes to be successful.

"We are in the crosshairs of two explosive markets: kids entertainment is growing rapidly and the other, the video game industry, is experiencing explosive growth," David Pikoff says.

By 2010, the worldwide video game market is expected to grow to $46.5 billion, according to consulting firm PricewaterhouseCoopers. Although Games2U doesn't have any direct competition locally, Pikoff believes that it's just a matter of time before others jump into the fray.

"We want to become known as the obvious leader in our segment [mobile game entertainment], and to provide world-class franchise support," Pikoff says.

The price tag for a two-hour Games2U party is $299, and $129 for each additional hour. A typical party lasts about two to three hours.