Chapter 27: The Contract

"Cheers!"

Two hours later, the office at Atari was filled with jubilant sounds.

At this moment, the three individuals present all wore expressions of delight.

Nolan Bushnell was quite pleased, for when Mirohua had imposed its innovation blockade on Atari, they had swiftly discovered a new avenue for business expansion—like finding a hidden path in a seemingly impassable mountain range.

"Here's to a successful game launch!"

Don Valentine was equally elated. As an investor in Atari, he had invested sixty thousand dollars in the company. If Atari had been stifled by Mirohua, his investment would have vanished into thin air.

At that time, he was not yet the investment mogul of the future; sixty thousand dollars represented his hard-earned savings, and no one would willingly part with their hard work. Thus, Atari had to find a way forward.

And now, a path had been found.

"To a pleasant collaboration!"

Ethan raised his glass and clinked it with Nolan Bushnell and the others.

As the crisp sound of the toast resonated, the orange-yellow liquid swirled and danced.

After Ethan had severed the escape route, the negotiation proceeded rapidly.

As for the contract details, they were naturally satisfactory to Ethan.

The contract stipulated that Ethan Jones and Evelyn Johnson would authorize Atari to distribute the game "Snake" for one year. In return, Atari was to pay a licensing fee of six thousand dollars and promised to manufacture at least one thousand units of the "Snake" game console within the year.

Viewed through the lens of future times, this contract might seem elementary—one thousand game machines is a mere drop in the ocean compared to the millions of copies sold by blockbuster games.

But this was 1975, not the era of mobile internet!

Consider this: the celebrated "Pong," after a year on the market, had sold only two thousand five hundred units. By 1974, when Atari was sued by Mirohua, the total number of "Pong" machines shipped was merely eight thousand!

Despite this, the price of one thousand dollars per unit still brought Atari an impressive eight million dollars in revenue!

Thus, for Ethan, stipulating a minimum production of one thousand units in the contract was an excellent starting point.

After all, the first pot of gold…

Securing it is victory!

The primary goal was to build a reputation!

As for the revenue share, it was straightforward: fifteen percent of the sales price.

Though Ethan had hoped for a higher percentage—ideally reaching the heights of future tech giants like Apple—the cost of arcade machines in this era was not comparable to that of iPhones.

A basic TV-like screen cost at least seventy-five dollars, the game motherboard's material cost one hundred fifty dollars, and with additional components like built-in speakers and custom joysticks, the total cost of a machine was not less than six hundred dollars.

With a gross profit margin of only forty percent, allowing Ethan to take fifteen percent was the absolute limit for Atari.

After deducting other expenses, Atari's founders and investors could only pocket around seven to eight percent.

Of course, the revenue from arcade game sales was not the main profit driver in this era.

The real profit came from the sale of game motherboards.

Atari's service for replacing game motherboards was priced at four hundred dollars per order. After accounting for materials, labor, and shipping costs, the net profit per order was actually one hundred fifty dollars.

Therefore, Ethan's initial demand for thirty percent of the net profit—one hundred twenty dollars—was quite steep. Nolan Bushnell and Don Valentine were adamant against it.

They argued that motherboard replacement was a service for Atari's existing products, part of Atari's own market, and that Ethan's demand for eighty percent of the net profit was akin to outright exploitation.

But negotiations are all about starting high and settling low.

After some back and forth, the figure was reduced to eighteen percent.

This meant that for each "Snake" game motherboard sold, Ethan would receive seventy-two dollars.

This was roughly half of the net profit.

Though this sum might seem modest, the other items in this era were not exactly cheap!

Downing his whiskey, Ethan winced at the sharp taste.

His furrowed brow did not go unnoticed.

"Ah, Ethan, your tolerance for alcohol is quite lacking," Nolan Bushnell teased.

"Indeed! Ethan, you could use some practice," added Don Valentine, the founder of Sequoia Capital. "If you wait until you're a millionaire to improve, it will be too late, as many beautiful girls will be vying for your attention! They'll want to get you drunk and spend a delightful night with you!"

Their banter ignited a lively atmosphere.

Ethan waved his hand dismissively. "My tolerance is fine; I just drank too quickly."

"Ha ha ha!" The two men laughed.

"Really!"

"We understand! We understand! We all get it!"

Their laughter grew more raucous.

After their casual chat, they did not forget the business at hand. Nolan Bushnell retrieved a stack of checks from the office drawer, intending to pay Ethan the six thousand dollars in licensing fees. Just as he was about to write, he paused.

"Ethan, would you prefer one check or two?"

Since the cooperation was settled, Ethan naturally did not conceal any copyright issues and produced the document granting Evelyn Johnson full authority. Without it, they could not proceed with the contract.

Ethan, of course, preferred two checks. Initially, he had agreed with Evelyn that the revenue from "Snake" would be split equally, but he had specific preferences regarding the amount.

"One check for three thousand, one for two thousand, and a thousand in cash."

"I trust this shouldn't be a problem?"

Nolan Bushnell found this request unusual but complied with Ethan's wishes.

He wrote two checks for Ethan and then took out a neat stack of twenty-dollar bills from the office safe.

Counting out half, he handed it to Ethan for verification.

Once confirmed, Ethan smiled and said, "So, I just wait for the game to be released?"

"Mm-hmm, it will be ready within fifteen days to a month at the latest," Nolan Bushnell replied. "At that time, we will invite previous partners to experience the machines. If you're interested, you're welcome to come by and check them out. We'll give you advance notice."

"Okay, see you later."

"Goodbye."

With everything settled, Ethan took his leave. As he departed, Steve Jobs, who had been waiting outside, also saw him off.

Ethan did not refuse Jobs' politeness.

After exiting the factory gate, Ethan waved to the departing Steve Jobs, signaling him to walk with him for a while. After Atari's factory was completely out of sight, he handed Jobs the fifty twenty-dollar bills he had requested.

"This is…" Steve Jobs looked puzzled.

"Your reward," Ethan Jones said with a smile. "Without you, I might not have secured such a smooth collaboration with Atari. This is what you deserve, so accept it."

"But… this is too much."

Steve Jobs hesitated but did not outright refuse.

"Oh, brother! The information you provided was worth more than a thousand dollars!"

Ethan raised his voice, pressing the money into Jobs' hand.

"And this money isn't just a gift! Nolan mentioned that once the "Snake Game" machines are ready, they'll invite partners to inspect them. I'm very interested, so make sure to come by my place and let me know."

"Also, as this is our first collaboration, I'm not sure how adept Atari's sales team is, but I believe your sales skills must be excellent. So, I'll need you to assist further."

With that, Steve Jobs accepted the money without further ado.

He glanced at the bills, his eyes flashing, and smiled. "Okay, I'll accept it."

"That's the spirit, brother!" Ethan raised an eyebrow and patted Jobs on the shoulder.

Jobs pocketed the money. "You didn't call me over just for this, did you?"

"Of course."

"…"

Jobs was taken aback by this response but then chuckled. "Shall I leave now?"

"Mm-hmm," Ethan waved him off, signaling him to go.

With that, Jobs turned and walked away.

However, moments later, he came running back.

Ethan found this behavior rather curious.

When Jobs, panting, explained that Nolan Bushnell had sent him to a trade show with a mission to secure a partnership and a reward of five hundred dollars… Ethan looked at Jobs' retreating figure and smiled.

If he had previously doubted the authenticity of Steve Jobs' appearance, he was now certain that the man before him was indeed the genuine Steve Jobs.

In Ethan's memory, this version of Steve Jobs was desperately short of money.

So desperate that he had forfeited all prize money from "Breakout."

Ethan admitted that his desire to interact with Steve Jobs stemmed from his envy of Jobs' position… er, he was eager to connect with Apple! That's why he gave Jobs a thousand dollars.

And now…

"This guy is quite genuine, isn't he?"

Watching the bouncing figure of the Apple founder, Ethan's eyes sparkled with amusement.