Chapter 188: Straight to the Point - Part 1

Hiroshi Yamauchi hailed from a prestigious Kyoto family, with four generations engaged in the trade and textile industry. They imported high-quality silk from neighboring regions and cotton from the West, selling these to producers of kimonos, yukatas, and suits. Decades ago, the family's annual net profit had already reached five to six million dollars.

His mother's background was even more illustrious, tracing back to the Uda dynasty that ruled in the 9th century, with his grandfather being the first mayor of Kyoto and his father a member of the National Diet. When she married Hiroshi Yamauchi's father, the land they owned in Kyoto already exceeded one-fifth of the total area.

Born with a silver spoon, Hiroshi Yamauchi had an advantageous start. In 1964, he naturally proceeded to study at Kyoto University and, without any surprises, went on to study abroad at MIT. After completing his education, he returned to Japan and entered Marubeni Corporation. At a social gathering for the wealthy, he met Yoko Yamauchi, the daughter of Hiroshi Yamauchi, and the two quickly married.

The wedding took place at Heian Shrine.

Preferring not to take over the family business, Hiroshi Yamauchi continued to work at Marubeni, currently serving as the project manager for a residential project in Kamakura.

But family ties aren't easily severed. From the moment they utilized the family's first capital, it was impossible to completely cut off the relations that had become part of their blood. Thus, when Hiroshi Yamauchi was asked by his father-in-law, the one in Nintendo with the best English, to spare some time each quarter to submit the reports...

Despite his reluctance, Hiroshi Yamauchi agreed.

Upon Ethan's return to the company and reaching the reception room's door,

This middle-aged man, with slicked-back hair, wearing a neat gray suit and possessing typical Asian features, was chatting amiably with Destiny Game's finance director, Aaron Macy.

"'Snake' is really a great game…"

"It has unleashed an unparalleled vitality in our country…"

"After a year and a half of verification, we are sure it will become a classic in the history of video games. Before the visit, our president even told me that, if possible, he would even like to continue buying advertisements for it, insisting on hanging the green figure on our country's light boards for two more years…"

"Oh—your President Yamauchi really likes this game that much?" Before Aaron Macy could speak, Ethan, who had entered the reception room, said with a smile, "If he likes it, just buy it—"

"Draining the value of a product and then promoting the next one."

"That's what makes a competent businessman, because it's about seizing the ultimate profit, right?"

"Boss." Aaron Macy stood up.

"Mr. Jones." Hiroshi Yamauchi, who had met Ethan before, also stood up to greet him, "It's truly an honor to meet you. Our President Yamauchi has mentioned your excellence to me many times, urging me to interact more with you whenever possible. In my Vancouver, your gaming machines fill the streets, your legend is known by everyone…"

Ethan had never sold gaming machines to Kamakura.

But enthusiastic North Americans always found ways to transport the machines there.

Otherwise…

How could the sales of 'Pac-Man' continue to rise?

These matters had nothing to do with Ethan. Hiroshi Yamauchi's overly flattering words made him nod with a smile, "Nice to meet you." He extended his right hand to Hiroshi Yamauchi for a brief handshake, then gestured for Aaron Macy and him to sit down and talk, "Don't be so formal, please, have a seat…"

Before finishing his sentence, Ethan took the lead and sat down on the sofa.

The other two also promptly responded, making a polite gesture before sitting down.

Knowing that his boss was furious, Aaron Macy barely touched the sofa before handing over the documents brought by Hiroshi Yamauchi to Ethan. Perhaps because of the sarcastic tone in Ethan's entrance, Hiroshi Yamauchi, who had been smiling continuously before Ethan's arrival, was now sitting upright, his back straight, and hands on his thighs.

Ethan observed this and shook his head with a smile as he flipped through the documents.

After discovering that Nintendo might be hiding something, Ethan had gone through all the past accounts Nintendo submitted to him, allowing him to read the latest report fluently.

Ethan first looked at 'Snake,' the starting point of their collaboration.

'Snake' was officially released in Japan during Christmas 1975 and early 1976. In the first settlement period, Nintendo settled $4.2 million in revenue with Ethan based on a shipment of 15,000 units at $2,000 per machine, and paid the amount into Ethan and Evelyn's personal accounts in the

 third quarter of 1976.

In the second settlement, the settlement quantity for 'Snake' was 22,000 units, with the unit price unchanged, resulting in a dividend of $6.16 million paid at the beginning of this year.

The current settlement was for 'Snake's' third period sales, from January 1, 1977, to June 30, 1977.

During this half-year, 'Snake' arcade machine sales reached a peak of 28,000 units, attributed to Nintendo's price reduction of the arcade machines. When the unit price was adjusted to around $1,500, the total revenue of $42 million would bring Ethan and Evelyn $5.88 million in profits, which Nintendo would transfer to their accounts in the coming days.

With the appearance of 28,000 units, the total sales of 'Snake' in Japan had reached 65,000 units, fulfilling the minimum guarantee contract signed with Ethan. After this, even if they stopped selling the arcade machines, it wouldn't constitute a breach of contract.

This agency brought a total net profit of $16 million to Ethan and his companies.

The second report was on 'Pac-Man.'

Due to chip issues, its total sales in Japan were zero.

However, due to the minimum sales agreement, Nintendo settled the commission for Destiny Game in the first period of the last half-year with a shipment of 10,000 units and did the same for the second period this year. Therefore, Destiny Game received the first dividend of $2.8 million in the first quarter of this year and will receive another $2.8 million in the ongoing third quarter.

These two pre-dividends will be deducted in the third period when the game officially launches, affecting the income to be reflected in next year's first-quarter settlement.

The third report was from Kyoto Chip Company.

After reading the 'Pac-Man' report, Ethan thought the chip report would be empty, as 'Pac-Man' had not yet been produced. As a capitalist, Nintendo would not kindly sell chips externally. However, to his surprise, Kyoto Chip Company had already produced 30,000 chips in the first half of the year, a substantial number.

Ethan was puzzled by this situation until he found an explanation in the report notes, revealing that these 30,000 chips were ordered by Nihon Electric.

Since 1976, many Japanese companies, such as Telephone and Telegraph, had been considering introducing microcomputers to train their staff. Nihon Electric thus received numerous corporate orders.

They had previously used Intel chips for a batch of products but found them too expensive to manage costs effectively. Therefore, upon learning that Nintendo had secured the world's cheapest chips, they immediately placed an order. Nintendo accepted the order to produce the first batch of chip products for Nihon Electric to demonstrate their openness to MOS.

At $24 per chip, the total revenue was $720,000.

Additionally, they prepared to submit a customized 6502 chip proposal to MOS as previously mentioned, needing custom chips to meet the manufacturing needs of Japanese computer companies.

These actions appeared 'full of sincerity.'

Hmm.

Right.

After reading the report notes, Ethan immediately questioned Nintendo's sincerity.

"So, in the coming days, Destiny Game will receive a dividend of $2.8 million, my sister and I will receive $5.88 million in profits, and the chip issue will be discussed after the 1977 fiscal year?" Ethan flipped through the finished report, asking with a smile.

"Yeah~"

During Ethan's review, the reception room was eerily silent.

The bizarre atmosphere made Hiroshi Yamauchi uneasy.

But as Ethan spoke, Hiroshi Yamauchi felt the suffocating air collapse instantly.