Chapter 610: Tiangong Group

Combining his memories from the future, Xia Yu knew that although arcade games were now popular all over the world, the future market would be even bigger for console games.

Of course, this was on the premise of excluding the large category of online games that have yet to appear.

However, after reading this detailed information, Xia Yu still decided to enter the arcade game market first.

After all, due to the limitations of the chip, the console game market has not yet exploded, and there are still a few years left for him to prepare.

Arcade games are different. The chips they require are relatively low-end, and there is no need to make a system yet. Many arcade games in his mind can be produced directly under the current conditions, and they will definitely be more fun than 'Space Invaders'.

On the contrary, handheld games like Pokémon simply cannot be produced now. Even if it is a less good game, the programming required to make it sophisticated is very large, and with the current capacity of storage chips, it simply cannot be stored.

Although he already had a decision in mind, Xia Yu still wanted to hear Fok Kin-ning's opinion. It was both a test for him and an attempt to see if he could be inspired a little.

After all, in the past few months, Fok Kin-ning had been able to collect information on the global video game market, and he definitely had his own knowledge and thoughts on video games.

In the afternoon, Huo Jianning once again came to the chairman's office.

'Jianning, sit down and talk!'

'Thank you, Chairman!'

Huo Jianning sat on the sofa, eyes straight ahead, waiting for the chairman Xia Yu to ask questions.

Xia Yu placed the information on the desktop and gave Huo Jianning an appreciative look, praising him, 'I've read the information you've compiled, it's very comprehensive and detailed, well done!'

'Thank you, Chairman, for your praise!'

Fok Kin-ning said with a pleased expression.

'Now I'll test you. If I want to enter the video game industry, what would be the best way to start? You can speak freely, no one will blame you!'

Hearing the chairman say this, Fok Kin-ning nodded solemnly, took a deep breath, and quickly thought about it.

Xia Yu leisurely sipped his tea, observing Fok Kin-ning from time to time.

Perhaps he already had his own thoughts in mind, and without making Xia Yu wait any longer, after about three minutes, he nodded to Xia Yu and said, 'Chairman, then I will briefly share my humble opinion.'

'Well, go ahead!'

'According to my estimate, the current market capacity of the global video game industry is around 4 billion U.S. dollars, and the annual growth rate can reach more than 20%.'

'Of this, the U.S. market alone accounts for 2 billion U.S. dollars, or more than half, followed by the island countries, Europe, and other regions.'

'Of the 4 billion dollar market, the computer game market is just over 100 million dollars, with console games accounting for over 60% and the rest being arcade games.

'Whether you make arcade games or console games, the most technically demanding part is the motherboard, which is the soul of the game console. The soul of the motherboard is the chip, and a good chip is the basis for making a good game. Relatively speaking, the quality of the chips required for console games is higher than that for arcade games.

'And the most important thing about console games is the variety of game cartridges and the game system. This is a software challenge. Unfortunately, Hong Kong does not have these conditions. Talent alone is the biggest limitation.'

'If you want to enter the console game market, the best way is to set up a company in Silicon Valley on the west coast of the United States. Not only can you reduce costs, but you can also find the software and hardware needed to develop console games.'

'In addition, a large amount of capital needs to be invested.'

'After Fairchild completely withdrew from the game market last year, the entire US console game market has been dominated by Atari alone, and the game consoles developed by them have undergone the test of the market and are now the most mature game consoles. If we want to compete, it will be very difficult. A conservative estimate is that we will have to invest more than 100 million US dollars in the research and development of our game consoles, and the research and development time span will be at least half a year, or even one or two years. By that time, Atari's new generation of game consoles will have been released, so the risk is very high.'

Upon hearing this, Xia Yu could not help but nod in agreement. It was precisely because he had considered these issues that he had not entered the console game market right away.

Of course, Xia Yu did not agree with one point that Fok Kin-ning had mentioned earlier, and that was the estimate of the global video game industry market. He believed that the current market of 4 billion US dollars should be more or less right.

However, in terms of growth rate, 20% per year was too low. Entering the 1980s, integrated circuits would make a huge breakthrough, and the shackles of the video game industry would be opened, ushering in a golden period of explosive growth for the video game industry.

However, after all, Fok Kin-ning was not a born again person like him, and given the limitations of the times, it was understandable that he had made an incorrect judgment.

At this point, Fok Kin-ning took a sip of tea to moisten his throat before continuing.

'The production of arcade games is much simpler. As long as you design a game and make a good motherboard, you can buy the other parts and assemble them. This is how Taitung's Space Invaders was made.

'If we set up a video game company to produce arcade games, we will be limited by talent and game ideas, but there will be no problem with art and assembly.'

'In terms of talent, there are very few people in the semiconductor industry in Hong Kong, but I have found out that several professors and teachers in the Department of Electronic Engineering at the Chinese University of Hong Kong, which was established a few years ago, have returned from the United States and are experts in this field. We can hire them as consultants.'

'However, in the long run, there will not be enough talent, and it will be too late to train them at the Chinese University. The best way is to set up a branch overseas or poach talent.'

After a moment of hesitation, Fok said again, 'These are conventional ideas, but with your capital advantage, Chairman, it would be better to directly acquire an electronic game company.'

Xia Yu nodded with satisfaction and asked with interest, 'If you were to recommend one, which company would you recommend acquiring?'

'Nangong Meng and Sega are the leaders in the arcade industry in the island country. It's fine to acquire either one of them, but I've found out that Sega's business situation is not very good, and American Overseas and Western Industries are interested in selling their shares. I personally recommend acquiring Sega.'

'Pat-pat-pat...'

'That's a good idea, it's exactly what I had in mind!'

Xia Yu applauded with a smile on his face.

Fok Kin-ning humbly bowed slightly.

'You're right. To acquire a company, the best approach is to skip the slow initial development stage. Sega is also a good acquisition target.'

'But...'

Hearing the turn of events, Fok Kin-ning, who had been happy, had a startle and immediately looked at Xia Yu, his heart slightly lifted.

'Both Nangong Meng and Sega are companies from the island country. No matter how well they do, they are creating tax revenue for the islanders and supporting them.'

'Now Hong Kong residents face high employment pressure, and with the rise of the real estate industry, residents' living pressures have increased. Hong Kong's industrial structure seems to be too single-sided, and it has already lagged behind the other three of the "Four Asian Tigers". There is the British government's fault, but another reason is that people like us lack social responsibility, and most people only look at immediate interests.'

'Hong Kong is, after all, my roots, it is our Chinese place. Since I have the ability and the British government does not consider these things, then I will do it myself.'

'Although I am also a property developer who drinks blood in the eyes of others, this is a major trend. I cannot change it, nor do I want to change it, but I can still be different from other property developers and leave a legacy of technology and innovation in Heung Kong.'

Fok Kin-ning's eyes were full of shock. He never imagined that the chairman was considering this issue!

On second thought, the chairman seems to have already started doing something about it. For example, Jiuding Animation Co., Ltd. As far as he knows, the chairman is the one who made this industry in Xiangjiang big, and it has dominated the island's comic industry, yet he still placed the head office in Xiangjiang.

The benefits are also obvious. Over the course of a year, thanks to the existence of Jiuding Animation Co., Ltd., the comic and animation industries have already taken off, and many young people are determined to pursue a career in this industry. There are now several comic newspapers and more than a dozen comic companies, although these companies are still small.

It can be said that Jiuding Animation Co., Ltd. has, through its own efforts, snatched an industry from the island country, resolutely solving the employment problem for a small number of people in Xiangjiang, and will solve the employment problem for more people in the future. This is a contribution to Xiangjiang.

Today, the chairman is doing the same thing again, except that he has replaced comics with video games, which have a higher technological content.

Looking at Fok Kin-ning's shocked and admiring expression, Xia Yu gave a faint smile and said, 'Go offshore and register two companies, one called Tiangong Group and the other called Tiangong Electronics Co., Ltd., which is a wholly-owned subsidiary of Tiangong Group. Then investigate the situation of the island country's Sega and American Overseas and Western Industries companies, and prepare for the acquisition of Sega.'

The company name is Tiangong, which is taken from the phrase "ingenious craftsmanship", which embodies Xia Yu's strong expectations.

Nature is the most amazing creator of things, and exquisite craftsmanship surpasses nature. It describes extremely exquisite craftsmanship

In his vision, the Tiangong Group will be rooted in the fields of technology and industrial manufacturing in the future, and the products of the Tiangong Group will be comparable in quality to natural creations.

'Yes!'

Fok Kin-ning responded loudly, his mood uplifted.

'Go!'