Chapter 125: Reflections and Decisions

Certainly, thoughts are thoughts, and reality is reality. It's not something achievable in the short term if one wishes to break away from Nintendo and sell electronic games in Japan.

Putting aside the shock on his shoulders and expressing admiration for the scene before him, as the evening approached, Hiroshi Yamauchi, satisfied with achieving his purpose, happily treated them to dinner.

As newcomers, Hiroshi Yamauchi didn't go for any local specialties. Instead, he took them to a Tokyo Western restaurant that had already been reserved. They sat down to satisfy their hunger in a business dinner setting.

That night, the group rested in Tokyo and set out again the next day. Starting from Tokyo, they passed through Shinagawa, Kawasaki, and spent over an hour to reach the second-largest city in Japan, Yokohama.

Similar to Akihabara, there were arcades here, but Hiroshi Yamauchi only took them around outside. Afterwards, they arrived at the historical carriage road that was built a hundred years ago to open Yokohama Port.

"A hundred years ago, when our country built this road, the initial purpose was to facilitate passing carriages. However, with Yokohama's development, it gradually became an economic center. Our country's first Western-style theater, Yokohama Grand Theater, is over there, and that happened in 1875..."

With Hiroshi Yamauchi's introduction, the modernized Yokohama center unfolded before them. Despite the strong commercial atmosphere with restaurants, theaters, and banks everywhere, Nintendo's storefront was also present. Inside, arcade machines featuring "Snake" were displayed, surrounded by young people following trends as Ethan and Evelyn appeared.

If it were just that, Ethan and Evelyn could question Hiroshi Yamauchi's authenticity. However, when Hiroshi Yamauchi led them forward and arrived at a side alley of the carriage road, with a Sega sign above and Nintendo's "Snake" arcade machines below, the scene left both of them stunned on the spot.

Seeing Ethan and Evelyn's puzzled faces, Hiroshi Yamauchi proudly said, "Sega didn't get the license, but their storefront still needs to make money, so they can only buy our machines."

"But I didn't sell them; what I want is a share."

"Not much, just fifty percent of the total daily revenue."

"The clerk at the entrance is our Nintendo representative."

Hiroshi Yamauchi waved to a young person, who excitedly bowed in response.

Ethan, on the other hand, was utterly shocked!

Damn!

Is Hiroshi Yamauchi playing this kind of game?!

Using Sega's storefront to display their own machines?

How is this any different from NTR right in front of someone!

Of course, after the excitement, Ethan also noticed a problem.

Nintendo has its own store in Yokohama, and they can easily turn this place into an arcade for game operation. In such a location, they don't need to share the profits with intermediaries.

Ethan actually had something to say about this.

When Nintendo uses arcades to eat into gamers' earnings, the money made from arcade sales doesn't matter much to them.

But in the end, he decided not to say anything.

Because he understood why Hiroshi Yamauchi showed him all these things.

It's not just about telling the breadth of Nintendo's business in Japan, but also demonstrating the depth of their business. After all, the success of freely using the properties left by their ancestors is the reason they can easily succeed.

Doing business with my own storefront means all profits are pure earnings, right?

If Tokyo's Akihabara demonstrated the consumption power of Nintendo in electronic games, Yokohama's Carriage Road showcased Nintendo's control within a specific region of Japan. The upcoming areas like Osaka, Nagoya, and Sapporo would reveal Nintendo's concentration in electronic game consumption.

Due to high population density and concentration in a few cities, game companies here only need to firmly grasp a few cores to reap huge fortunes. Coupled with convenient transportation and smooth railway networks, radiating to the surrounding population becomes an advantage that North America finds difficult to match.

And this kind of advantage...

Indeed, it can save a company countless labor costs.

Stopping and starting, it took five days to tour the nine major cities in Japan. Ethan gained a clear understanding of the market here, and if his previous knowledge came from learning and accumulation in his past life, now the visible reality would help him make better judgments in the future.

For Evelyn, these five days of traveling made her realize the isolation of Japan. In the entire Japanese market, their own local brands were everywhere. On the roads, you would see Toyota, Honda, Nissan, Suzuki cars; on the streets, Sony's neon signs were everywhere; supermarkets had Aeon and Marubeni; in real estate, it was either Mitsubishi or Nomura, not to mention Mitsui and Sumitomo.

Of course, there were foreign brands too, but the only one ubiquitous was Coca-Cola.

"Coca-Cola is impressive." This fact made Evelyn feel a bit emotional.

"No choice, they've already taken this industry to the extreme, haven't they?" Ethan chuckled and shook his head.

After visiting the major centers of Japan, Hiroshi Yamauchi changed direction, taking them to the spiritual homeland, cultural origin, and also the location of Nintendo's headquarters, Kyoto.

Since Kyoto was not bombed during World War II, it remains one of the few cities with pre-war architecture. However, that wasn't the focus. Because what Hiroshi Yamauchi showed them was Nintendo's production base.

When Hiroshi Yamauchi unveiled the legendary Nintendo Game Division, the Uji Small Building in the suburbs of Kyoto looked ordinary, just like any other company's R&D office. However, when the display area showcasing Nintendo's blockbuster products appeared, such as the Super Arm, which sold over 1.2 million units in a single year, the Super Serve Machine with an average annual sales of over 700,000 units in three years, the popular Love Tester in Japan, and the Light Gun that brought Nintendo $30 million in revenue...

These products narrated Nintendo's dream-making ability!

Seeing Hiroshi Yamauchi's former stars, such as Gunpei Yokoi with his large flat top, Masayuki Uemura with a slightly receding hairline, and Genyo Takeda with glasses...

The fact that three of Nintendo's Four Heavenly Kings were present made Ethan burst into laughter.

Because these talents were the fundamental reason for Nintendo's successful transformation!

Being able to gather one talent is luck; being able to gather three is insight.

After touring Nintendo's headquarters, R&D center, and production line, Ethan's investigation had actually come to an end. However, before he made a decision on whether to cooperate or not, Hiroshi Yamauchi took him to one more place—Kyoto's eastern part, the renowned Heian Shrine.

Next to the shrine, there was a quiet Higashioji Street.

According to Hiroshi Yamauchi's introduction, a few hundred years ago, in the fifteenth century, this was just a dirt road leading to the Imperial Guard's residence for the emperor's summer retreat, the Imperial Palace, and across from the villa was the residence of the Imperial Physician for safety.

And now...

This was their family residence.

Hiroshi Yamauchi's ancestors bought it a hundred years ago.

They became neighbors with the emperor.

Ordering the massive latch to be lifted, pushing open the more than 500-year-old gate, Hiroshi Yamauchi made a nostalgic inviting gesture, leading Ethan and Evelyn inside.

Stepping on the century-old stone path, gazing at the lush and charming garden, staring at the small bridge spanning the flowing water, appreciating the tea room made of cedar wood, Hiroshi Yamauchi smiled and said, "Mr. Jones, regarding the chip cooperation, I don't know what your thoughts are."

"I don't know if you have other partners, and I'm not sure if you will communicate with other electronic companies in Japan, but there is one thing I want to honestly tell you."

"In our country, not many people can own property here."

"And those who truly do electronics..."

"They are not worthy!"

Yamauchi pointed to the land beneath his feet, confidently smiling, "Mr. Jones, I believe after these days of observation, you should have a rough understanding of the strength of our Nintendo. But I want to say, what I can showcase is actually more..."

"I sincerely want to discuss and finalize this collaboration with you."

"Because working with us can maximize your benefits."

At this point, Yamauchi smiled affirmatively at Ethan.

"Regarding this, I can assure you."

"I can guarantee it in my ancestral home."

After these words, a bright smile appeared on Ethan's face.

"I believe in your capabilities, Mr. Yamauchi."

Calm words couldn't extinguish the excitement in his heart. Although Ethan had not given a definite answer, Yamauchi was not in a hurry. He, citing the need to return to handle business, gave Ethan his space. At the same time, near the Peace Shrine, in the Okazaki area, Yamauchi arranged accommodation for Ethan and had his secretary standby 24 hours in the vicinity.

If there are any issues, they can be addressed promptly.

Nodding in gratitude, after closing the door to his residence, Ethan walked in and lay down on the tatami mat. With slightly closed eyes, he asked his sister, "What do you think of Nintendo?"

"If we view it from the perspective of a partner, they are outstanding enough."

"One could even say, nearly perfect."

After a week of investigation, Evelyn, tired like Ethan, rested and shared her accumulated thoughts, "But if we look at it from a competitive standpoint, they are somewhat formidable."

"Although you told me before that Nintendo has many excellent products in Japan, it wasn't until I visited their factory that I realized those products are technically simple yet full of creativity."

"Innovating already popular or even obsolete technology is a formidable ability."

"Because of this, they can never be pinned down by others."

This fact made Ethan smile lightly.

He knew Evelyn was right.

In his previous life, no matter how you looked at it, the NS was electronic junk.

But there's no way around it, creativity is powerful.

"Do you think chip licensing can be beneficial?" Ethan asked what was on his mind.

"It can." Evelyn decisively gave her answer.

"Why?" Ethan was curious.

Evelyn said, "Because I have confidence in you."

???

This answer exceeded Ethan's expectations.

Turning his head slightly, he looked at his sister.

A smile covered her face.

Seemingly sensing his movement, but more like not believing her own words, Evelyn added, "Well, actually, regardless of whether we grant Nintendo chip licensing or not, they will continue to fervently pursue this path."

"If we don't give them the 6502 authorization, they will surely find other chips."

"And with the influence of Mr. Yamauchi in Japan, there will definitely be offerings from other manufacturers."

"So..."

"Since we can't control it, let's make money from it."

"Hahaha—" Evelyn's words made Ethan laugh.

Yes!

After these days of observation, he finally understood why Nintendo was successful!

It's not just because Yamauchi has a keen sense and extraordinary vision, but also because the accumulated wealth of his ancestors allows him to go crazy in pursuit of his goals!

Although in Ethan's past life, there was always a joke that to ensure the family's wealth continued, you shouldn't let the children try entrepreneurship. Most of the time, silver-spoon-fed rich second generations are out of touch with reality. When they float in the clouds, most entrepreneurial endeavors are doomed to fail because the biggest consumer group in the world is the general public.

But...

Yamauchi was clearly an exception.

In his bones, he still had the arrogance of a rich kid. Otherwise, he wouldn't have taken Ethan to see his ancestral home to showcase the might of his ancestors. But at the same time, he could restrain his temper for the sake of his business.

This is a very frightening self-control.

A self-control that cannot be swayed by others.

Ethan believed that if he didn't grant the authorization, Yamauchi would definitely turn around and find new partners!

If that's the case...

Why not maintain a friendly relationship, as Evelyn suggested?

Because this way, they could really earn more!

As for future competition?

Let's talk about that later.

He could confront Mirowa and Atari head-on, so why not challenge Nintendo?

Who's afraid of whom!

Note:

Yamauchi's ancestral home really exists. Their house has a total of 152 tatami mats, while at that time, an ordinary family's home had only eight to ten tatami mats.

Yamauchi always wanted to make chips. In the book "Game Over," in the second chapter, it is mentioned that in 1975, during a dinner, Yamauchi discussed consumer chip matters with Nintendo's top management. MOS had already licensed the chip, so Nintendo couldn't get it. Therefore, Yamashiro Masayuki suggested that Yamauchi seek Ricoh for production. At that time, the entire Nintendo only had Yamauchi who believed that chips could change the world. With the annual consumption of less than 100,000 chips in the consumer Japanese market, he directly placed an order with Ricoh for three million chips, just to push the chip price down to 2,000 yen. Yamashiro Masayuki's suggestion became the most painful thing for Nintendo because in 91-92, they needed to pay one billion dollars annually for the chip.