X3O Takes Computer Gaming Out of the Basement

By Ellen McCarthy
Thursday, June 30, 2005

It is Saturday afternoon in Rockville, and the boys are furiously fighting terrorists.

"Atta boy. Atta boy," one says when a maneuver goes well.

"What's happening? Why are we so slow?" another growls after a setback. Occasionally a keyboard is slammed, a profanity uttered and a shaggy-haired head is hung low in frustration.

The terrorists they're battling are digital, but their passion is real. And that, says Michael Feldman , is exactly why there's so much money to be made in the computer gaming industry.

Feldman doesn't design or sell games, but he's hoping to cash in on the $7.3 billion market just the same. He and a group of investors are launching a chain of "gaming centers," to bring players out of their basements by offering them a communal space to play on the latest equipment.

"There's a thrill in being able to look at the person next to you and say 'Ha, I beat you,' " said Feldman, president of X3O Emerging Technologies . "Kids don't want to be sitting at home in their rooms."

After a friend mentioned the concept, Feldman, an information technology professional by training, fell in love with the notion and spent two years preparing to launch the company.

The first X3O center, which opened in May, is a modern space at the corner of a strip mall. Twenty-three personal computers line sloping walls painted a deep blue and lime green. Couches and oversized beanbags provide resting spots for spectators, while the gamers sit in cushy executive-style chairs.

The goal was to create a distinct but easily replicable design, Feldman says, referencing Starbucks, master of that concept. On a recent weekend, 40 teenage boys -- and one girl -- crammed in to compete in a marathon Counter-Strike tournament.

Young men, Feldman says, make up the core of his customers, but he wants to attract mature gamers and women as well.

The center charges $6 an hour -- $5 for members who pay a $25 annual fee -- and sells refreshments to supplement its revenue. (The libation of choice: an energy drink in a fancy blue bottle called Bawls.) Most of the gamers come in at night and on weekends, so X3O converts to a more sedate place on weekdays -- offering companies and organizations a computer training facility.

Feldman plans to open five more X3O centers around Washington in the next two years. So far, 200 gamers have signed up for memberships, including 19-year old Nick Fitzsimmons , leader of a Counter-Strike team who estimates he spends 25 hours a week at X3O.

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