Chapter 99: Fragrant Muffins - Part 2

Not only that, upon seeing Ethan, he directly said, "Mr. Jones, there are two Asians visiting our company downstairs, claiming they want to meet you. At the same time, they also mentioned that they are from Magnavox, and the one leading them even said he is the president of Destiny."

"What is this about?" Ethan was surprised as he splashed water.

"Is it for 'Snake Game'?" he thought.

With this in mind, Ethan asked Damian Dean to bring the two guests into the reception room.

When he reappeared, two middle-aged men entered his field of vision.

One of them, dressed in a black suit with a tie, sat upright.

The other one wore a beige checkered suit and held a light brown pair of frog-shaped sunglasses.

Upon seeing Ethan, the two men promptly stood up and bowed slightly.

Then, the man in the checkered suit said, "Mr. Jones, hello. We are representatives of Nintendo from the Magnavox company. I am the current president of Nintendo, Satoru Iwata, and this is my companion. Thank you very much for taking the time to meet us amidst your busy schedule."

With these words, Ethan nodded slightly in response.

As they were not familiar with each other, pleasantries were kept minimal.

When Ethan inquired about their purpose, Satoru Iwata, who had led Nintendo to the peak of electronic games in Ethan's previous life, smiled and said, "Mr. Jones, our purpose is simple. The 'Snake Game' you invented is an excellent game, and we want to bring it to Nintendo, allowing more players to experience the joy of electronic games."

While he spoke, his companion opened the briefcase he was carrying and took out a stack of documents.

After receiving them, Satoru Iwata handed them directly to Ethan.

"This is the proposal we have formulated. I appreciate Mr. Jones taking a look."

"Exactly!"

"These people are also here for 'Snake Game'!"

Ethan nodded with a smile and took the documents.

Since it had shifted from a single quotation to a collective bid, Ethan decided to read and then respond.

Without opening the documents in front of Satoru Iwata, they exchanged a few polite words, and Ethan escorted them out.

Once back in his office with the documents, his curiosity led him to open both proposals.

After a quick glance, Ethan closed them again.

He raised his head and looked at the ceiling for a while.

Looking back down, he opened the proposals again.

"Well, well!"

He directly swallowed a gulp of saliva.

Because, in his eyes, he could only see one word—

"Money!"

Sega presented two collaboration proposals: one for a buyout and one for profit sharing.

The buyout plan was straightforward. Sega sought a five-year partnership for three million dollars annually. Meanwhile, they requested exclusive selling rights for the 'Snake' electronic arcade game in countries outside of North America.

Although the price was far from the value of the 'Snake Game' IP, considering Ethan's previous contract with Atari, when Sega quoted a fifteen million cooperation price, it indicated their confidence in selling at least one hundred thousand electronic arcade machines within five years!

What concept was this?

According to Atari's previous shipment speed, with their distribution, they could only achieve the performance of twenty thousand mainboards in a year!

Now, Sega was confident in selling one hundred thousand electronic arcade machines globally! Not circuit boards!

This was a tremendous confidence in their supply chain system!

However, this was normal. Sega had been in the arcade business for decades. If they didn't have this capability, they would have gone out of business long ago.

"Is this the strength of an old company?" Ethan laughed with emotion.

Looking at the profit-sharing contract, it was somewhat complicated.

In the profit-sharing aspect, Sega also sought a five-year contract. For this, they made a commitment that when the global shipments of the 'Snake' electronic arcade machine were less than forty thousand units, Ethan would receive a sixteen percent royalty fee per machine's selling price.

When the global shipments exceeded forty thousand but were less than eighty thousand, the royalty fee standard would be fourteen percent.

When the global shipments exceeded eighty thousand but were less than one hundred twenty thousand, the royalty fee standard would be twelve percent.

After the global shipments of 'Snake' exceeded one hundred twenty thousand, the royalty fee standard would uniformly be calculated at ten percent.

At first, Ethan thought it was an interval contract.

For the first four thousand machines, let him take sixteen percent, for the next forty thousand to eighty thousand machines, let him take fourteen percent, and so on, decreasing with quantity.

However, upon closer inspection, he realized that it was a descending contract similar to betting on sales volume.

If, in the first year of cooperation, due to production issues, Sega only sold twenty thousand electronic arcade machines, they would calculate the royalty fee at sixteen percent based on the selling price.

But if, in the second year, due to catching up with the production chain, their output increased, selling forty thousand units, accumulating a total of sixty thousand units over two years, the royalty fee for all sixty thousand units would be recalculated at fourteen percent.

And in the first-year settlement, the excess two percent for the twenty thousand electronic arcade machines would be deducted from the second-year settlement.

The situation was the same afterward—increasing quantity would decrease the royalty fee.

At first glance, this reverse deduction of the royalty fee might be displeasing.

But at the same time, Sega was implicitly committing to the machine's shipment quantity.

Only when they were confident that the 'Snake' arcade machine could sell at least one hundred twenty thousand units in five years, would they dare to propose this plan!

Not only that, at the end of the document, there was a handwritten statement.

"Mr. Jones, I apologize for not being hospitable during your last visit. I felt very sorry for that. The employee who received you before felt unsuitable for our company, so he resigned yesterday, and I approved it. - David Rosen."

Such words made Ethan smile.

"Oh, Sega, so you guys have a day like this too!"

"I tried to get you to represent us before, but now... hehehe~"

To be honest, Ethan always remembered being turned away by Sega when he tried to promote the 'Snake Game' arcade machine.

He didn't mention this matter in front of David Rosen, not because he was generous, but because he hadn't decided whether to cooperate with Sega.

If they really were to collaborate, during negotiations, he would definitely bring up this matter, trying to gain more benefits.

But for now...

David Rosen was quite sensible!

However, being sensible was of no use, because compared to Sega, Nintendo's proposal was even more explosive.

Similarly, there were two plans: a buyout and a profit-sharing.

But in terms of territorial agreements, Nintendo and Sega differed; Nintendo only wanted the rights in their country.

Even so, Nintendo was willing to offer twenty million dollars for a five-year exclusive market.

In terms of profit-sharing, they were even more straightforward.

A five-year contract with a flat rate—fourteen percent of the selling price. Not only that, they also gave a commitment to a minimum shipment of fifty thousand units.

This number was genuinely full of sincerity.

Because as long as Ethan signed on the contract, Nintendo had to guarantee a minimum authorization fee of eight hundred and forty thousand dollars.

Compared to

the flat rate of twenty million, it might be a bit less, but profit-sharing contracts were all about the shipment quantity.

When these two proposals appeared, Ethan wasn't surprised. Both were deceptive.

At the same time, he couldn't help but feel a sense of emotion—

"The gaming, gambling, and adult industries are indeed making money!"

"These gambling tools, each one richer than the other!"

Note:

There is one thing that needs special mention. The sale of electronic arcade machines, disassembled for selling, is only done in North America. According to David Rosen's son-in-law and former president of North American Nintendo, Minoru Arakawa, selling arcade machines in North America is quite troublesome because of the vast land and sparse population. Directly bringing arcade machines for sale would lead to substantial losses. Therefore, they sell arcade machine mainboards. Even though the profit margin for the whole machine is higher than for the board alone, Arakawa himself has indeed personally engaged in this, just like my previous description of selling 'Snake'—this information comes from an interview with Minoru Arakawa in Playboy magazine in the 1990s.

The sales quantity of North American arcade machines is indeed a mystery. Previously, when I explained the data for Chapter 39, I mentioned that 'Space Invaders' could sell one hundred thousand units in North America in a year, but it couldn't reach that number. The most absurd thing is the highly popular 'Donkey Kong' in North America, which sold for several years, and the cumulative shipment volume was only sixty-eight thousand units. I haven't figured out this situation, and no professional has analyzed the reason, so the data I wrote in the text is just an estimate. Some of you may find the difference between the world and North America too significant, and you may find it implausible. In reality, I also find it implausible, but I really don't know the reason.

The playing cards sold by Nintendo, called 'hanafuda,' are indeed the same as that.