If it’s a colo… yes, it would be primarily local customers. Data centers are not just for consumer B2C services. There’s a lot of stuff that runs in data centers that are both more important and more sensitive to latency or connectivity than video games.

Even for something as simple as a business that needs somewhere to run critical VDI hosts — then yes, they need low latency and somewhere that their techs can physically get to if they need to fix something.

You may also need interconnects to specific physical networks that are only available in certain places. You may need direct connections to partner equipment. This requires physical presence.

Colo space is not something you rent if a VPS is good enough for what you’re doing.