Hundred billion market

"A business of several tens of billions? If that's the case, then I won't feel troubled anymore."

"But, is it really several tens of billions?"

In fact, Takayuki was a bit vague about this number.

When Takayuki mentioned several tens of billions, he meant in US dollars.

But Masashi Ota instinctively thought of several tens of billions in Japanese yen, and the difference was quite substantial.

However, if Takayuki really said several tens of billions in US dollars, Masashi Ota would probably consider him crazy.

For a company that had just started, thinking about a business of several tens of billions of US dollars was a sign of youthful overconfidence, as if doing business were too easy.

"Takayuki-kun, can you explain in detail what this business of several tens of billions is about? Is it related to this game console?"

"Yes." Takayuki nodded. "The game console does have such potential. It's just that it has never been fully explored before. This area is like an undeveloped gold mine."

Masashi Ota pondered for a moment and said, "I have to admit, Takayuki-kun, your game console is indeed very popular. But, I don't think the scale would be that large. If you said it was a billion-dollar business, that might be possible."

Takayuki didn't rush to argue but instead asked, "Why do you say that?"

"You see, your game consoles are placed in some shopping malls and amusement arcades. How many game consoles does one arcade need? At most, an average of one hundred, right?"

Takayuki nodded without denying.

"So, if we calculate based on your future prices, one console costs fifty thousand yen. Even if one arcade buys one hundred, it's only five million yen. If you sell one hundred to twenty arcades, it's only one billion yen. Or, if we include those games you mentioned, how much do you plan to sell each game for?"

"Probably between three thousand to four thousand yen."

"Huh? That cheap? I thought it would be around ten to twenty thousand yen."

Takayuki waved his hand. "If it were that expensive, no one would buy it. I don't intend to set such high prices. However, if it's a special version for arcades, there might be price differences because of additional data adjustments and so on."

Masashi Ota blinked. Did he just hear about a special version for arcades?

What did that mean? If there were special versions for arcades, then there must be regular versions? Then who are the regular versions for?

But this was just a fleeting thought. He didn't dwell on it too much and continued expressing his opinion.

"So, let's calculate based on the highest price of four thousand yen for one game. If one hundred consoles all have the same game installed, it's only an additional income of four hundred thousand yen. If you install games for twenty arcades, it's only eight million yen. This seems too little to even come close to a billion-dollar scale."

Unless, this thing could be sold worldwide, then there might be some possibility.

But by then, it would probably be seven or eight years later.

A billion-dollar scale seven or eight years later was also tempting, but there were too many variables. Takayuki was still just a young man in his early twenties who had no idea what kind of turbulence would arise in the process.

There were never a lack of shrewd individuals in the world.

When they discovered the money-making potential of this thing, they would immediately follow suit. Even if they might not be able to match Takayuki's games and consoles in various aspects, as long as they were attractive enough and cheap enough, they could snatch his market.

In numerous classic cases in the past, similar scenes were played out.

Early birds had some advantages, but it was difficult to achieve a monopoly position. Rising stars would catch up, countless examples of waves crashing on the beach.

Especially if this thing were targeted by large-scale companies, with large investments and massive influxes of funds, Takayuki's small company would be crushed instantly.

The amusement industry wasn't easy.

Takayuki listened carefully to Masashi Ota's opinion, nodding in agreement from time to time, which puzzled Masashi Ota.

If you agree with my opinion so much, then why are you so confident in claiming there's a billion-dollar industry?

After Masashi Ota finished speaking, Takayuki finally spoke up.

"Ota-kun, I think you've been heading in the wrong direction from the beginning. When I mentioned a billion-dollar industry, I wasn't just talking about selling those game consoles to arcades."

Masashi Ota was taken aback.

If you don't sell to arcades, who else would you sell to? Sell to shopping malls? Or rent them out yourself? Or...

Suddenly, Masashi Ota thought of something.

He widened his eyes.

"You're not thinking of selling them to individuals, are you?"

Takayuki smiled. "Why not? From the beginning, the positioning of my game console was for home use, not for arcades."

"But... that's too expensive, fifty thousand yen. Ordinary families definitely wouldn't easily buy something just for playing games, that's impossible."

Masashi Ota shook his head vigorously. No matter how you looked at it, it seemed impossible.

"Let me be frank with you. The cost of this game console is currently only about two thousand four hundred yen, mainly due to the high labor cost of manual assembly. And the price I plan to sell for home game consoles in the future is below seven thousand yen."

Masashi Ota's breathing paused.

How much?

Costs only two thousand four?

And you sold it to me for two hundred thousand yen!

How much money did you make off me?

Masashi Ota forgot about the more important news Takayuki had just mentioned and suddenly remembered the price at which Takayuki sold him this game console.

This was more than an eighty-fold profit?!

It was outrageous!

His initial estimate was that the cost of this game console was probably around twenty to thirty thousand yen, so he accepted it because there was no other option. But this was over an eighty-fold profit?

"I know you may be thinking about me selling you a game console for two hundred thousand yen just now, but to put it in business terms, it's a willing buyer and a willing seller. What you should pay more attention to is, what if this thing is sold to millions of households? How big do you think the industry scale would be?"

Every household has children.

And even in the downturn after the bursting of the economic bubble, Japan's overall average income was still relatively high globally.

If they were to pay seven thousand yen to buy a game console for their children and then another three to four thousand yen to purchase an additional game, many families could afford it.

Based on Japan's population statistics from a previous period, there were approximately around 120 million people, with urban population reaching over eighty million. Calculating on average, assuming a family of three, that would be over twenty-six million urban households, and if we subtract the elderly households, there would probably still be over ten million normal urban households.

Among them, if only one-tenth were willing to spend for their children, that would be over a million households.

These were easily calculable figures.

And if we multiply one million by the average price of ten thousand for a game console plus a game, it seems like it would indeed be a billion-dollar scale...

Masashi Ota looked at Takayuki, and in his eyes, he saw many things.

Then, Takayuki threw out another piece of data that made his breath quicken.

"In reality, the profit from the game console is secondary. When necessary, I can even sell at zero cost or even negative cost. The real profit comes from those games. A game for three to four thousand yen, what about ten games? Twenty games? These are all long-term huge profits."

Masashi Ota: "..."

My brain has temporarily shut down.