Some friends and I are in the process of starting a company which hosts game servers, but we've run into a bit of a problem: we can't figure out how to host it. The highest-tier plans for VPSes we've found include typically 30 terabytes of monthly bandwidth, and a 1TB hard drive. However, this would only support about 10 servers, which would allow for little to no profit margin. We briefly considered building our own servers, as they would pay for themselves as opposed to the plan within a few months, but we again ran into the issue of bandwidth, or rather network speed, which would allow for even fewer than 10 servers. We've run out of ideas at this point, and so we were hoping those more experienced than us would have some.
closed as primarily opinion-based by Greg Askew, Falcon Momot, Ward♦, Jenny D, MadHatter Nov 25 '13 at 9:40
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Well, it all runs down to business and administration decisions. But also consider damage risk. A VPS going down is "load backups into new VPS that your provider provides". A server failing (hardware) means pulling the machine, waiting for spare parts etc. - a LOT more downtime. No profit margin is generally normal for people going for small hobby scale deployments for things that require no real investment.
Generally, every business without entry barrier will have a near zero profit factor - the more if you talk economy of scale business things and you don't have scale. But any business decision is outside the scope of a pure admin side.