How long has it been since you last went to an internet cafe?
For many people, it takes a moment to recall the last time they pushed open the glass door of an internet cafe, which may have been back in their student days: dozens of computers crammed into a room, the sound of keyboards clacking away, the air thick with the smell of instant noodles, cigarettes, and sweat. Some people stayed up all night playing League of Legends, others teamed up with friends to play games, while others simply spent a few yuan to buy a couple of hours of time because they didn't have a powerful enough computer at home.
Later, as computers entered ordinary households and smartphones put games, social media, and video in people's pockets, the internet cafes that once dotted areas around schools, commercial streets, and residential districts began to disappear in droves. For many, "internet cafes" have become a nostalgic memory, much like arcades and video rental shops, evoking a bygone era.
It should have been a story with a foregone conclusion, but the plot has taken a surprising turn in recent years.
You may not have been to an internet cafe in a long time, but you might find that some cities have seen the resurgence of e-sports venues, e-sports hotels, and internet cafes with increasingly sophisticated decor; malls now have e-sports zones, and when popular games are released, some stores are even packed to capacity once again. More notably, this is not just a perceived "rebound".
Data released by the China Internet Cafe Services Industry Association shows that from 2023 to 2025, the number of internet cafes in the country grew from approximately 77,700 to 122,600, with the industry's revenue scale also increasing from 53.4 billion yuan to 101.68 billion yuan. The number of main entities in the national internet services market reached 122,600, representing a year-on-year increase of 12.68%, with total consumer visits reaching 5.571 billion for the year.
But before that, from 2016 to 2023, the number of internet cafes nationwide had plunged from 152,000 to just 77,000 — an average of nearly 30 closures per day. An industry backed into a corner by smartphones, home computers, and even the pandemic, once widely expected to "gradually fade from the stage of history," has surprisingly started growing again.
This business, which had almost been made obsolete by the times, has managed to survive once again, but how did it achieve this resurgence?
The Rise and Fall of Internet Cafes
To understand today's seemingly sudden resurgence, we need to go back to the heyday of internet cafes and examine why they were able to sweep the nation in a short period of time, and why they later declined.
In the late 1990s to early 2000s, personal computers were not yet widespread, and the cost of home internet access was not low. For many people who were accessing the internet for the first time, internet cafes were the gateway to the internet. Around 1998, Feiyu Internet Cafe, with its low-price strategy, attracted a large number of customers and became a microcosm of that "golden era".
During those years, QICQ, the precursor to QQ, began to gain popularity, and online gaming experienced rapid growth. As ordinary families could not afford computers or broadband, internet cafes naturally became the go-to places for chatting, searching for information, and playing games. Relevant data shows that at the beginning of 1998, there were only 299,000 computers connected to the internet nationwide, but this number expanded to 20.83 million in just over three years, with the number of internet users growing from 620,000 to 59.1 million.
However, this rapidly growing industry soon encountered its first major turning point. In 2002, a fire at the "Blue Speed" internet cafe in Beijing killed 25 people and injured 12. While the direct cause of the accident was arson, the fact that the internet cafe was operating without a license, lacked fire safety facilities, and had welded shut its external window security bars also highlighted the long-standing regulatory loopholes in the industry, bringing them to the forefront of public attention.
Subsequently, local authorities quickly launched a nationwide campaign to rectify the fire safety and business operations of internet cafes. By the end of June 2002, more than 39,000 internet cafes had been inspected nationwide, with over 11,000 ordered to suspend operations for rectification, and more than 3,100 shut down in accordance with the law. Additionally, over 19,000 potential safety hazards were identified and eliminated. In the years that followed, the approval and licensing of internet cafes became increasingly stringent, with the industry transitioning from a stage where "anyone could enter" to a more standardized phase with higher barriers to entry.
Tighter regulations are only the beginning of a shift. What truly changed the fate of internet cafes is that the technological conditions they rely on are also changing. Personal computers are becoming increasingly affordable, home broadband is becoming more widespread, and mobile phones have moved a large portion of online entertainment demands from computer desks to the palm of one's hand. By 2016, internet cafes no longer had the exclusivity of being the only place where one could access the internet or play games.
What's even more troublesome is that the old internet cafes themselves have not been upgraded in terms of user experience. People who experienced that era probably all remember some "classic configurations" that are quite vivid: cracked headphones, greasy mice that seem like they could be used to stir-fry food, and "Hershey's Kisses keyboards" with sticky keys. In Hunan, some internet cafes even reek of smoke, sweat, and betel nut year-round, with betel nut residue visible around the monitors.
I used to frequent an internet cafe that had almost all of these elements. The ventilation system was virtually non-existent, and after spending an hour or two there, your clothes would be saturated with its unique smell. When you got home, you almost didn't need to explain where you had been - your parents could tell just by smelling you. Nevertheless, at the time, our home computer wasn't good enough, and if you wanted to play games, you still had to go to the internet cafe.
In other words, many old internet cafes are not retaining users through experience, but rather through a lack of alternatives. Once users have choices, their problems are quickly magnified. Mobile internet and mobile games have taken away a batch of young people who would have otherwise become PC gamers, while short videos have further consumed fragmented entertainment time. At the same time, the threshold for building a home computer has continued to decrease since the release of 10-series graphics cards, with several thousand yuan enough to build a PC capable of smoothly playing most games.
When home computers have decent performance and a more comfortable environment than internet cafes, the question of "why spend money to go to an internet cafe" becomes increasingly obvious. With the onset of the pandemic, this dilemma was further exacerbated: internet cafes, as densely populated and relatively enclosed spaces, were directly impacted, with 12,800 closing nationwide in 2020 alone. In those years, it seemed that internet cafes had indeed hit rock bottom.
The Revival of Internet Cafes: What's Behind the Trend
Following past logic, it seems there's little reason for internet cafes to thrive again. Computers are affordable for everyone, games can be played at home, and mobile phones provide entertainment anywhere, anytime. Yet, just when the industry was at its lowest point, new variables began to emerge.
The first variable comes from the policy and operating environment. What historically gave internet cafe investors the biggest headache wasn't how to buy computers, but the upfront hurdles of licensing, approvals, and fire safety inspections. After 2015, these procedures gradually loosened. By the end of 2024, many regions had further simplified the approval process for opening an internet cafe, with required documentation cut by as much as 56%. In 2025, reports even emerged of internet cafes opening with "zero approvals."
Of course, having fewer procedures does not mean that one can open a business at will. The location of internet cafes is still subject to regulations such as distance from schools, and fire safety inspections remain an unavoidable threshold. Fire safety facilities, safety passages, and fire hydrants must all meet requirements. However, compared to the past, the entire entry process has become more streamlined, and after funding, venue, and equipment are in place, the speed of opening new stores has significantly accelerated.
This change was quickly reflected in the market. Data from the China Internet Association showed that by the end of 2024, the total number of internet service venues had reached 81,700. In Hangzhou alone, more than 300 new internet cafes opened in one year, with industry leader Wangyu E-sports' store count surpassing 1,300; in Liling, Hunan, a county-level city, 23 internet cafes emerged in the main urban area of approximately 20 square kilometers, including large stores of over 1,000 square meters.
The financial environment is also improving. In 2025, nine departments including the Ministry of Finance and the Ministry of Civil Affairs introduced a loan interest subsidy policy, providing support to operating entities in eight categories of consumer service industries that meet the conditions. Internet cafes were included in the cultural and entertainment support category, with eligible operating entities able to receive support of up to 1 million yuan in loan scale and a 1% annual interest subsidy.
For investors, internet cafes have a very practical aspect: their core assets are computers and equipment. The China Internet Cafe Services Industry Association has mentioned that even if business is poor, computer equipment still has a certain residual value, which can theoretically reduce some of the losses from exiting the market. Policies address the issues of "whether they can open" and "whether investors dare to invest", but they do not explain another more critical problem - where will the customers for these new internet cafes come from?
The answer lies in e-sports and gaming. Over the past decade, long-lasting games such as League of Legends and PlayerUnknown's Battlegrounds have maintained a stable PC player base, and the emergence and rise of e-sports events have brought the originally online gaming experience back offline. University e-sports competitions, city tournaments, and store competitions are becoming increasingly common, with some internet cafes themselves becoming competition venues and also transforming into daily gathering spots for young players.
The popularity of major e-sports events can even directly boost store sales. Industry data shows that the performance of Chinese e-sports teams in major tournaments can bring significant increases in customer traffic to some internet cafes. The August 2024 launch of "Hei Sheng Hua: Wukong" provides an even more intuitive example: the combination of high configuration requirements and phenomenal popularity led many players who had not visited an internet cafe in a long time to return to the stores.
Meanwhile, the requirements of PC games for hardware have once again widened the gap between home devices and internet cafe devices. Having a computer at home is no longer unusual, but not everyone is willing to upgrade their graphics cards, memory, and monitors for a few 3A or competitive games. Especially when the cost of building a computer rises, spending a few dozen yuan to experience a high-performance machine at the 4080 or 4090 level is more cost-effective for those who occasionally want to play high-quality games. With the intense competition in the group-buying market, consumers can now enjoy experiences that would normally cost hundreds of yuan for just a few dozen yuan through new membership activities offered by various internet cafes, further increasing the value for money.
In particular, the hardware price surge starting from the end of 2025 may continue to bring "dividends" to operating internet cafes in the short term - of course, this refers to "existing internet cafes". If one were to invest in new internet cafes at this time, considering the general 2-year payback period, it would still be necessary to exercise caution.
If high-performance hardware has drawn a portion of gamers back to internet cafes, then changes in consumer habits have given internet cafes a broader space beyond just "gaming". After experiencing rapid expansion, script killing and board game stores and other offline entertainment formats have undergone a reshuffle, with some young people's leisure demands seeking lower-priced and more flexible alternatives, a position that internet cafes have filled.
More tellingly, people walking into an internet cafe today aren't necessarily seeking a lively atmosphere. The high occupancy rate of single-person booths is a telling shift: people enter a public space yet still want their own private corner. Young people treat these venues as spots for team gaming, while some middle-aged players use them as a temporary escape from the rhythms of work and family. Internet cafes are no longer just selling "computer time"—they now cater to emotional needs, social interaction, and solitude.
Internet Cafe's July Hot Game List (Statistics: Shunwang Technology)
New titles are also steadily expanding this user base. Games such as *Delta Force*, *Valorant*, and *Naraka: Bladepoint* are driving fresh traffic into internet cafes, with *Valorant* in particular drawing in more female players. In turn, the venues are reinforcing this clustering effect through licensed esports cafes, offline tournaments, and themed events. Games funnel players into the cafes, while the cafes provide physical social spaces for the games—together, the two have formed a new cycle.
Rolling Out New Moves
However, the return of customers doesn't mean that old internet cafes are reviving in their original form. On the contrary, the most obvious change in this round of resurgence is that the internet cafes themselves have undergone transformations. Some have been converted into e-sports arenas, while others have added private rooms, dining, and accommodation. Some have even incorporated services such as bathing, card games, and more into the same space. When "cheap internet" is no longer the only selling point, the industry has truly taken off, and it's not just about computer hardware configurations.
Traditional internet cafes were centered around a chair and a computer; today's internet bars, e-sports venues, and e-sports hotels, however, are increasingly like a comprehensive consumer space. Going online is just the entry point, while the environment, dining, rest, socializing, and even accommodation are the key factors that determine whether users are willing to stay for several more hours and come back again.
This is also why new business models like e-sports hotels will expand rapidly in the post-pandemic era. They have leveraged the favorable trends in the cultural tourism and e-sports industries, transforming "internet access rentals" into "comprehensive services". For operators, what users are buying is no longer just the right to use machines, but a more comfortable and convenient entertainment experience.
Prices remain the most basic competitive advantage of internet cafes. For many people, an all-night stay costs only a few dozen yuan, and compared to movies, escape rooms, KTV, and board games, the entertainment time is longer, with lower cost per unit of time. After a large number of stores exited during the pandemic, supply decreased, while some demand for internet access and gaming persisted; in an environment where consumption is more rational, this "spend little money, stay a long time" advantage is being reappreciated.
The owner of a chain of internet cafes in Changsha once stated that in an environment where consumption is becoming more cautious, people will reduce their high-end entertainment expenses, but the demand for internet cafes may be more stable due to their low prices and long hours of operation. Another internet cafe manager also mentioned that in the past, university students mainly came to internet cafes to play games all night and would occasionally buy a bucket of instant noodles; now, many young people come in groups, and their gatherings have a social nature, resulting in a higher proportion of consumption on drinks and snacks.
As users change, the store environment must also change. Non-smoking and smoking areas are being clearly delineated, with free external cleaning supplies provided or maintained by dedicated staff; equipment such as e-sports chairs, high-refresh-rate displays, and mechanical keyboards are gradually becoming standard from being "bonus items". The past environment of smoke-filled rooms, greasy desktops, and cracked headphones is being replaced by a light luxury e-sports style, independent private rooms, and more standardized services.
Some large internet cafes have even begun to emphasize their physical space, offering amenities such as dining, rest areas, showers, and laundry facilities. The proportion of single and double rooms has increased significantly compared to over a decade ago, catering to solo gamers as well as couples and friends who want to play together. In the past, internet cafes competed on hourly rates that were a few cents cheaper, but now they are increasingly positioning themselves as a hybrid of hotels, cafes, and e-sports venues.
Of course, not all internet cafes are moving towards being "high-end". In the vast urban and rural markets, traditional low-priced internet cafes still exist in large numbers, forming another ecosystem: low internet fees attract a stable customer flow, and demands such as live streaming and game ordering provide additional usage scenarios. High-end internet cafes and low-priced internet cafes are not replacing each other, but rather coexisting in the same market, each seeking their own users.
Business models are also diverging accordingly. Beyond internet fees, a growing number of venues are experimenting with value-added services such as beverages, merchandise, food and beverage offerings, esports peripherals, and game streaming. Survey data from Chao News shows that in most esports venues and internet cafes across Zhejiang Province, revenue still comes primarily from internet fees, with drinks and snacks accounting for roughly 10% to 20%. In contrast, at some larger internet cafes in cities like Chengdu and Shanghai that have added food and beverage services, value-added revenue can reach 30% to 40%.
This means that internet cafes are transitioning from a "sell-time" business to a more typical space-based business: for the same square meter, how to make users stay longer, consume more, and be willing to come back again is becoming more important than simply lowering internet fees.
Hardware has not exited the competition, it has simply shifted from the past "good enough" to today's "experience differentiation". Currently, many internet cafes have invested upwards of 10,000 to 20,000 yuan per computer, with 32G of memory becoming the mainstream. The main hall and private rooms are equipped with different levels of graphics cards based on their positioning, and some high-end e-sports venues have even installed the 5090 in their top-of-the-line private rooms, with hourly rates also increasing to over 20 yuan.
Today's internet cafes appear to be contradictory: on one hand, they offer low-priced overnight packages for over a dozen yuan, while on the other hand, they sell high-end experiences for over 20 yuan per hour; some people just need a place to play games, others use it as a social gathering spot, and some even consider e-sports hotels as part of their short-term leisure activities. It is precisely this diversification that indicates the industry is no longer reliant on a single demand to survive.
From the continuous contraction after 2016 to the trough in 2023, and then to the re-expansion in the past two years, the internet cafe industry has not experienced a simple "death and rebirth". What has truly come back is not the old internet cafe that relied on information asymmetry and equipment scarcity to survive 20 years ago.
It's more like, after being squeezed by family computers and smartphones for years, it has found its place again: turning high specs into experiences, turning offline gatherings into social events, turning low prices and long hours into cost-effectiveness, and gradually incorporating food and beverage, accommodation, and services into this old business.
So, internet cafes will certainly have a hard time returning to their golden age, when they were almost synonymous with an entire generation of young people. However, they have not completely exited the stage like video rental shops and arcades. An industry once thought to be on the verge of disappearance is continuing to exist in a different way - this may be more worthy of attention than the fact that "internet cafes are popular again" itself.