Chapter 184: My Triumphant Smile~ - Part 1

The very next day at work, Ethan Jones called Alan Massey into his office to inquire about the current operating status of the company.

Alan Massey presented the company's financial statements to his boss in response.

"Although the market demand for 'Pac-Man' has reached saturation, its sales in the first half of this year still saw a rise, with 1,472 machines sold, generating revenue of $2,944,000."

"So far, its total sales have reached 17,281 units."

"This figure would astonish countless gaming companies, as they could hardly sell a fraction of 'Pac-Man' in their entire lifetimes," Alan Massey complimented.

Ethan Jones nodded with a smile, signaling him to continue.

"This year's 'Star Wars' performance was even more impressive. Amidst the frenzy across America, its total sales broke through 30,000 units in just two months. Although the current order increase has noticeably slowed, this game has brought the company a revenue of $61,230,000."

"After deducting production costs, outsourcing fees, distribution costs, and administrative expenses, our net profit for the first half of the year could reach $30 million..."

"Even after your and the chairman's cut, the net profit is still $25 million."

Alan Massey carefully examined the numbers on the report and earnestly stated the company's condition.

This fact made Ethan Jones exceedingly happy.

Half a year of operation, and the profit breaks three thousand? Wow!

Video games indeed are a gold mine in legitimate industries! And the "cut" mentioned by Alan Massey actually referred to the project's development costs.

Although the development teams for 'Pac-Man' and 'Star Wars' were only a handful of people, whether it was Steve Wozniak, who had helped out twice, or Damian Dean, who joined the company later, they all received a fixed salary from Ethan Jones and did not share in the project's profits.

But this doesn't mean the two games could be developed with just tens or hundreds of thousands of dollars. As the designer of the games, Ethan would take a 2.5% commission of the sale price of each arcade machine sold, and Evelyn did the same, with her commission being for overseeing the project's total development.

This was mainly to ensure the company's accounts looked authentic enough when the IRS came auditing, so they wouldn't think Destiny Game's products were conjured from thin air.

Because if the IRS discovered that a product which generated millions in revenue and sparked billions in market value had only tens or hundreds of thousands in development costs, they would definitely scrutinize Destiny Game's books, suspecting Ethan and Evelyn of tax evasion through this method.

Alas, the tax policies in the United States were just too ludicrous. The federal corporate income tax rate could be as high as 48%.

The California corporate income tax rate could reach up to 9.6%.

Seems high enough, right?

But compare it to the 70% federal personal income tax rate and California's 11%! Corporate taxes are practically a bargain!

Ethan and Evelyn could indeed forgo their development income, working on projects for the company without compensation to avoid high taxes. But the moment they did, the IRS would have grounds for investigation.

Developers not taking development fees under the guise of being bosses? That's outright tax evasion!

To avoid giving anyone leverage, they symbolically took a 5% cut.

Then they proceeded with personal tax avoidance strategies.

There was no choice; the IRS held the guns, so they had to pay up a bit.

Of course, even so, $25 million in net company profit was still too high.

Last year, they diluted some profits by buying land to build a residential area for employees, but this year...

How much land could $25 million buy? They could probably purchase the entire Milpitas!

Fortunately, Ethan didn't have to deal with these matters himself; Alan Massey would coordinate everything with external firms. Ethan's inquiry into the company's situation today was because he had other plans in mind.

After thanking Alan Massey for his report, he called Eulise Noble into his office, "I have a task for you. Go communicate with the schools to see if there are experts in optical storage research. Collect some information on this and let me know."

Yes, even though Ethan repeatedly mentioned he was overwhelmed with work, how could he stand by when he heard about optical discs? If the project was completely unrelated, he might consider it cautiously before getting involved. But when optical discs, a storage medium, could be applied in movies, games, computers, and more, if he didn't seize the opportunity, he'd think himself a fool!

Not to mention, Philips was tinkering with this thing! With both parties as competitors, and Philips evidently wanting to continue in the gaming domain, striking first is much better than being passively hit, right? As for the direction of optical storage application,

 he had already figured it out.

With Sony's CD player as a precedent, couldn't he just follow their lead and pioneer a D-777...

Eh! Wouldn't that make him unbeatable? Okay, okay, that's nonsense.

Ethan was aware that optical discs were not easy to develop because it would infringe on the interests of tape recorders and clash with optical storage developers. By then, they would not only face competitors like Atari and Magnavox but also multinational corporations like Sony, Panasonic, and Philips. But even if he had many enemies... his enemies had many enemies too!

When Philips cleverly jumps back and forth in the existing industry...

MCA, whose countless patents were wasted because of them, could become allies!

As long as he could pull in the American music content producers, the optical disc industry could still be viable~ Ah, wrong! His potential allies also included Steven Spielberg and George Lucas!

When North America's number one IP was right beside him...

How could he not polish that sheep till it shines?

Of course, plans can never keep up with changes, forming a team and developing a product is what Ethan should be doing right now, the rest can wait.

After arranging the gold mine he inadvertently discovered, Ethan, feeling relieved, finally had time to deal with previous unfinished business. The first matter was Vint Cerf's request.

During his visit to Arlington to meet Vint Cerf, the professor expressed dissatisfaction with a startup company in Santa Clara and hoped Ethan and Evelyn could help investigate. After returning to California, Ethan tasked Eulise with scouting the software development company. If not for Nintendo suddenly making a move, he might have already responded to the professor.

Now that the urgent matters at hand were dealt with, he naturally asked Eulise for the software company's intel. Discovering that the company was indeed developing a database as per CIA's requirements, he instructed Eulise to fax the collected registration information and inquiries to Vint Cerf.

With a crisp beep, the fax machine's green light lit up.

Moments later, a message was printed out by the dot matrix printer.

"Okay, I got it, thank you, Ethan."

The professor's reply had Ethan snapping his fingers, and then he moved on to the next matter.

Which was the relocation of the company's headquarters.

Currently, Destiny Game's headquarters consisted of three departments: the administrative department led by Eulise Noble with twenty-four staff members occupying the entire first floor; the finance department led by Alan Massey with seven staff members sharing the second floor with the game development department of eleven people led by Damian Dean; and the third floor was the private office of Ethan and Evelyn.

Though the building granted by the old chancellor was still adequate, with the first floor capable of squeezing in ten to fifteen more people and the second floor still open for recruitment after a bit of rearranging, if Ethan wanted to incorporate the optical storage research lab, it would start to feel cramped. Thus, relocation was inevitable.

During his search, he set his sights on a plot of land north of Stanford Industrial Park.

Since it was undeveloped, one could even catch a glimpse of the Santa Cruz Mountains from a higher vantage point, a comfort of being close to nature that delighted Ethan.

After submitting his requirements in Evelyn's name, the teachers at Stanford Startup Center expedited the approval process.

Just one day later, the old chancellor called him over.

"You want the land by the Mountain View city? Why? It's all barren there."