I think it is very profitable.
One around here started off as one "space" in a strip mall. Within a year or so they took over the entire strip mall. They had a few dedicated servers, I think 12 computers total. They charge a load for an hour. Had a big screen and XBox going, couches every where, food, the works.
Problem is the crowd that you are attracting. Typically 14-23 year olds. Kinda started off with people dealing dope outside the door. Owners didn't care, heck, they may have been buying from them too. Kids run away from home, camp out at the LAN shop on the couches. Basically the owners let people crash there. Cops were in there all the time looking for run aways and pot. Cops can't really shut the place down, but they don't want it in town. So they sicked the fire chief on them. Come to find out they tore down firewalls (not the computer kind
) in the building, were over the building capacity, selling food with out the proper permits, etc. So the fire chief thew them out. So they bought another "place" in a strip mall. I would assume before you know it they will have that mall taken over too.
So yes, I would say it is very profitable.