At Namco, Department Manager Nakamura sat with his hands clasped, his brow furrowed.
While the exact distribution revenue of the film remained unknown to outsiders, the packed theaters offered a clear indication: the blatant, uninhibited GG film had been a resounding success.
"Atlas is entering the arcade industry? First they buy Capcom, then they start developing arcade games, and they're already heavily promoting the games before they're even released. What are they up to?"
Nakamura felt he was seeing a connecting thread linking all of Atlas's actions, suggesting a grand, unspoken conspiracy behind it all.
Using Demon Tower to enter the arcade industry, acquiring Capcom to gain their arcade development team, and now, after securing Capcom's core hardware, they're formally entering the arcade business.
This is like sitting down at the dinner table!
The key difference between arcade games and console games was that console games were one-time purchases, while successful arcade games could become cash cows. Even after years, early fighting games remained staples in arcades.
Take King of Fighters arcade machines, for example. In their early days, they were ubiquitous across the country. If all of them had been licensed from SNK, their revenue would have been enough for SNK to acquire Namco.
Even when Sega decided to enter the console market, they could never bring themselves to abandon the arcade industry. The industry's continuous, steady stream of revenue was simply too tempting.
A single successful arcade game could generate far more revenue than a console game!
If Atlas were to compete in the console market, Namco, Konami, and others would have no fear. The console market, after all, had a high barrier to entry, so a slightly higher starting point wouldn't matter.
But the arcade industry was different.
An arcade could only house so many machines. If you took up a spot, I couldn't sell anything. If you made money, I lost money!
Expanding the market was impossible. The Japanese market was finite, and there wasn't an inch more to gain.
Department Manager Nakamura, suddenly realizing he had stumbled upon a great secret, made a swift decision.
He would leverage Namco's connections and established offline channels to prevent Street Fighter from entering arcades.
Regardless of whether the game would ultimately be popular, the goal was to kill it in its cradle.
At Atlas's office, Kobayashi Tetsu was calculating revenue.
The movie had been profitable, but the film's revenue would take a year to be collected.
He was focusing on other income streams.
Last month, Atlas sold over 300,000 units of its games in Japan and over 400,000 units in North America and Europe combined.
These figures were actually lower than in the past. Having existed for many years, Atlas's earliest games had gradually seen their sales dwindle, with only occasional purchases now. Most games have a lifespan of less than a year, so any of Atlas's titles that maintained strong sales for a year and a half were considered exceptional.
Based on these figures, domestic revenue amounted to 250 million yen, while overseas revenue was 2.8 million US dollars.
At the current exchange rate, this is equivalent to over 400 million yen.
This represents net income after deducting various sales channel fees and operating costs. In total, Atlas's revenue for June was close to 700 million yen.
This figure only includes home console sales, excluding arcade revenue.
Except for the early port of Dr. Kobayashi, which was handled differently, Demon Tower's arcade revenue was split 50/50 with the game coin operator. This means each game coin in Japan generated 50 yen in revenue for Atlas.
Last month alone, Demon Tower's arcade revenue reached 80 million yen.
This was for a non-coin-guzzling arcade game. Apart from the initial wave of players, few people now sit in arcades all day, feeding coins into the machine.
One could only imagine the impact if a coin-guzzling arcade game like Street Fighter, which requires endless practice, were to enter the market.
"But we've been spending a lot of money lately," Kobayashi Tetsu frowned.
Although Atlas's annual revenue reached tens of billions, the money vanished just as quickly. Marketing costs alone started at a hundred million yen. Even the office building, relatively cheap, cost tens of millions annually, with Atlas occupying the entire 24th floor. Salaries, set at 150,000 yen two years ago, were now woefully inadequate in Japan's growing economy, averaging 300,000 to 400,000 yen per person. Add in social security contributions, and the 70-plus employees cost the company 300 to 400 million yen a year.
Especially...
Kobayashi Tetsu had been opening offline game experience shops, and now there were fourteen Atlas stores across Tokyo. Except for the flagship store, all others were operating at a loss and required continuous funding.
In total, Atlas's liquid assets were meager, less than two billion yen. The rest of the money had been converted into assets through various expenses. According to Kobayashi Tetsu's own rules, only 10% of these assets, less than two hundred million yen, belonged to him personally.
I'm such a stingy old miser.
"I still have to spend money—I need to get rid of these two billion yen as soon as possible. I can't just sit on it. The end of the year is coming up, so I need to go on a spending spree!"
Kobayashi Tetsu slammed his hand on the table.
He didn't have a "prodigal son system," of course, but he understood basic finance. Money left idle was just a number; it only became useful when converted into assets.
Expanding the offline experience stores was essential. Kobayashi Tetsu prioritized this matter, viewing the construction of these stores like Dongzi building logistics centers—they had to be built, even if they lost money.
"It might be time to expand overseas. I should investigate the situation and then contact other companies. Otherwise, we'll always have to wait for Sega to relay information. While Chairman Isao Okawa isn't hiding anything, we can't rely on others entirely."
Kobayashi Tetsu secretly jotted down a note in his notebook.
We need to establish Atlas North America, especially with the gaming business increasingly focusing on the overseas market. An overseas branch is becoming more crucial than ever.
Whether we can make games is secondary. The important thing is to have people on the ground.
Kobayashi Tetsu initially planned to set up offices in North America and Hong Kong. For now, he'd put aside plans for the domestic market; no one could enter it until the 1990s.
As for Europe, there was no need to worry about it for the time being. Sega and Nintendo weren't particularly competitive there yet and were still developing their presence.
While he was pondering this, Kobayashi Tetsu heard a knock at the door. Naka Yuji and Takashi Nishiyama entered one after another, their expressions grave.
"What's wrong?" Kobayashi Tetsu put down his notebook, surprised. "You're not happy even though the game's finished? Nakahiro-kun, I told you not to use such underhanded tactics! Always cornering people and beating them up. Be careful you don't get ambushed on your way home!"
"No, it's not that," Naka Yuji said, lowering his head and bowing deeply. "President, I'm terribly sorry!"
"The pre-orders for [ Street Fighter ] didn't meet expectations. The movie's already finished filming, and the game's being published on schedule by [ GG ], but we've only received fewer than five thousand pre-orders across all of Japan."
Kobayashi Tetsu looked up slightly.
This can't be right?!
Takashi Nishiyama added, "This is a list of arcades in the Tokyo area. Most of the ones that refused [ Street Fighter ] gave their own reasons, but they're just excuses."
Kobayashi Tetsu gestured for him to continue, and Takashi Nishiyama pointed to a map. "From Meguro Ward to this area, all the arcades have extensive partnerships with Namco."
"From Harajuku to this area, most arcades are affiliated with Konami."
"And over here, they're closely tied to Taito."
"Currently, only the small, independent arcades that don't have direct Sega ownership or don't stock a large amount of Sega games have accepted Street Fighter. The other arcades seem to be waiting and watching."
Kobayashi Tetsu clicked his tongue.
"These damn fools."
Takashi Nishiyama's eyes widened.
Of course, Kobayashi Tetsu was speaking Japanese, but the word he used was slightly archaic—Ahou-I.
Whether it was Ahou-I or Yarou, both were vulgar terms. He'd rarely heard Kobayashi Tetsu use such language.
"The market is huge! I'm not even competing in Japan—I'm going overseas! Why the hell do they have to screw me over on this!"
Kobayashi Tetsu stood up.
Now he knew where the money needed to go!
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