The rise of Zhongguancun, Beijing's largest electronics trading market, made life for Gulou's console game shop owners even harder because of the hundreds of electronics stores that opened there.
Though Gulou is still known as the most famous area for console games in Beijing, it is no longer the only option.
The rising costs of running the business also came as a burden to console game shop owners.
"Everything is more expensive, such as house and food prices, and you have to pay higher salaries, so what you take home is very limited," said Kamu Lewu's Wang.
He said the profit margin in the industry is only about 3 to 5 percent. Many console game sellers in Gulou packed in their businesses as a result.
The number of console game shops in the Gulou area has decreased to about 30. They are mainly located in the streets of Gulou Dongdajie, Gulou Xidajie, and Di'anmen Waidajie.
However, Yin vowed to stay in business.
"Hardcore players will still come to Gulou," Yin said. "And the market is growing anyway. We earned more from a machine in the past, but demand was limited at that time. Now, more and more people play console games."
Most of his shop's customers are regulars who have been playing console games for a long time, he said.
The Chinese government bans imports of game consoles and related accessories as it thinks products of this kind may pose potential harm to the young. Although it is illegal, the gray market for console games is considerable.
The country's handheld and video game console market is expected to be worth $350 million by 2011, with an compound annual growth rate of 9.8 percent from 2006, and shipment is expected to increase by 19.6 percent to 3.6 million units over the same period, according to research company International Data Corporation.
The game consoles in the Chinese gray market are mostly imported illegally or supplied by console makers who buy proprietary chips used in the actual systems. Sellers in Gulou usually get the products from Hong Kong or Shenzhen through wholesalers and then sell to end customers.
"It's tough, but we are making money anyway," said Yin, adding that most console game sellers generate revenues from regular price rises and falls in the industry. For example, a machine is worth an additional 200 to 300 yuan after it is "jailbroken" by having any restrictions on use imposed by the manufacturer removed.
Gulou Dongdajie, although known as a major center for console games in Beijing, has also become home to an increasing number of musical instrument stores and cartoon, animation and toy shops.