Internet cafes have existed in Japan for years, but it wasn't until the mid 2000's that people started living in them. Japan's work life is extremely demanding and stressful for salaried employees, and many people just can't handle the workload that's expected of them.
But without a salaried job, it's impossible to afford rent. That's when they turn to the internet cafes. While there's no real bed for them, and the space is very cramped, the cafes have lots of amenities and it costs very little to stay there. For those in between jobs or trying to figure out what's next for them, it's an odd but convenient solution.
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(via Media Storm)