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Kasty Gaming Zone: Amos Mtsolongo& Musa Maphongwane

Two entrepreneurs see a gap in the township market and set up a business with massive expansion potential.

Juliet Pitman

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Every afternoon hoards of schoolchildren descend on a brightly painted container in Soweto, clamouring at its entrance while they wait their turn to access one of the gaming consoles inside. This is Kasty Gaming Zone and business is booming. “We get about 150 kids through here a day. All of them come because they love computer games,” says co-founder Musa Maphongwane.

Finding the gap

He recognised the gap in the market while running a local IT business. “There was a Sony PlayStation gaming console at my place and the kids just wouldn’t leave it alone,” he says. Partner Amos Mtsolongo adds, “There’s not much for the kids to do other than play soccer, and their families don’t have the money to buy gaming consoles that cost thousands of rands,” he explains. Everything about the Kasty Gaming Zone model has been designed to provide township kids with affordable access to the latest gaming technology. Ten minutes of gaming time costs just R2. Mtsolongo explains how they scrapped their original idea of opening in shopping malls in favour of much cheaper containers. “The container costs R15 000 and on average we pay only R600 rental a month, including electricity. This keeps overheads low and allows us to open anywhere that has electricity and broadband access,” he says.

Getting up and running

Today the company has seven containers in operation, the first of which was funded through the partners’ credit cards, loans from family and a R100 000 windfall that the pair won in a Branson School of Entrepreneurship Soweto Business Plan Competition. They developed their own bespoke software that controls access to each of the consoles through a centralised system, and enlisted the services of a local graffiti artist to develop the distinctive Kasty branding which adorns the outside of the containers.

Licensing and copyright prohibit “play and pay”-type operations, so

Maphongwane and Mtsolongo approached game manufacturer EA Sports directly to discuss their concept. “It just so happened that they’d wanted to penetrate the township market for a long time. They want kids to get to know their games so they were happy for us to go ahead without having to pay the licensing fees,” says Maphongwane.

Fostering community buy-in

The fact that children came from as far as 10 km away is perhaps unsurprising, but what couldn’t have been predicted is the support that Kasty has received from parents and schools in the community. “Parents know this is a safe and supervised place for their children to be, and the schools like it because gaming gives the children an opportunity to learn computer skills and become familiar with computer technology,” Maphongwane explains. He and Mtsolongo run a tight ship when it comes to discipline. No child is allowed to play during normal school hours and the games, most of which are sport-based, are carefully selected to make sure their content is suitable. “We also plan to offer free basic computer skills training for two hours on Saturday mornings, for anyone in the community,” says Mtsolongo. These give-back plans foster community support but they make good business sense too, in order to generate income during the down-time of school hours.Kasty offers multimedia services like Internet access, faxing and printing and the more locals who can use these services, the better it is for business. “We’ve also expanded into computer repairs, and cleaning of DVDs and CDs,” adds Maphongwane.

Plans for expansion

With the right kind of financial support, he and Mtsolongo believe they can have 100 outlets in Soweto alone. The scope for expansion is enormous. Currently three of the seven existing outlets are franchised and while the company plans to continue with this expansion model, the partners first want to establish 40 company-owned stores. “This is the critical mass we need to be able to run a successful franchise operation that offers the support necessary for the business to grow nationally,” says Maphongwane, adding that the company has benefited immeasurably from the input of Franchize Directions, the Franchise Association of South Africa and Endeavor, who are helping them develop their management and business skills. Mentorship from the Branson School of Entrepreneurs and legal assistance from Adams & Adams, both of which formed part of their business plan prize, has also been invaluable.

Looking to the future

“Our vision is for all township children across South Africa to have close, easy access to a Kasty container,” says Maphongwane. They need R4 million to roll out the 40 Soweto stores and while that might sound like a big hurdle for a small township business, these entrepreneurs are not short of ideas, energy or vision for how to get there. Theirs will be an interesting business to watch.

Kasty Gaming Zone

Players: Musa Maphongwane & Amos Mtsolongo
Est: 2006
Contact :+27 76 481 5856
www.kastygaming.co.za   

Juliet Pitman is a features writer at Entrepreneur Magazine.

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