Return to 1958 and build a century-old giant

Chapter 811 The Explosive Profits of Arcade Games and the Birth of the Famicom
In 1965, the two major shareholders of Hang Seng Bank, the Ho family and Yang Wendong, each held approximately 25% of the shares, with little difference between them.
Over the years, especially during the economic crises of 67 and 73, Yang Wendong continued to increase his stake in Hang Seng Bank, which had grown to 37%, making him the true power behind Hang Seng Bank. He Shanheng was aware of this, as he was getting old and the He family's descendants were not very capable. In addition, Yang Wendong had promised to preserve the He family's future wealth and status, so He Shanheng acquiesced to all of this.
However, on the surface, Ho Sin-hang is still managing Hang Seng Bank, and Yang Wen-tung is happy with this. No one understands Hang Seng Bank better than Ho Sin-hang, and few Hong Kong people surpass him in financial ability. Even if he really controlled Hang Seng Bank today, he would still have to find someone to run it, so it is better to continue to let Ho Sin-hang be in charge.

Therefore, as his own bank, Yang Wendong has been trying to plan for the development of Hang Seng Bank in recent years. The first priority is to enter Southeast Asia, but this is too difficult. Not to mention Hong Kong banks, even banks with the backing of major powers in Japan and the United States have not been very successful in these countries.

Therefore, after the reform and opening up of the mainland, it can become the main focus of Hang Seng Bank. Of course, the mainland will have a banking law in the future, and foreign banks will not be able to accept deposits in the same way as mainland banks. However, they can still participate in some large-scale investment projects that require foreign exchange, especially in the 80s and 90s. As for after 00, that's another story. They can also transform into commercial banks and invest in Internet companies.

"What are the conditions?" Yuan Geng asked cautiously immediately.

The biggest fear when borrowing funds from overseas banks is being pressured to accept conditions that violate policies and principles. For example, last year, there was a case in North China where someone wanted to use funds from Japan, and it took a long time of negotiation before both sides compromised.

Yang Wendong laughed and said, "Don't worry, I'm a businessman and I won't make any special requests. My condition is very simple: if Shekou or Director Yuan's jurisdiction needs funds in the next 10 years, my Hang Seng Bank must have priority."

Shekou is developing rapidly in the future. Even without its own history, by 1984 it had attracted more than US$5 million in overseas investment, accounting for almost 25% of the national total. Of course, most of it came from Hong Kong, after all, it is close by.

Such rapid development could not possibly be achieved by reinvesting one's own earnings; much of the assistance came from banks.
Don't be fooled by the fact that in the first year, the Shekou Industrial Zone was so poor that it could hardly afford electricity and no one paid attention to its attempts to raise money. But once it develops, there will be plenty of people willing to lend money. After all, banks don't like to help those in need, but they love to add to those who are already successful.
Hang Seng Bank can help today, but naturally they will want to find ways to obtain a higher share of profits in the future.

The reason for only 10 years is that after 10 years, the development of Shenhai City will gradually marginalize Shekou Industrial Zone, because other places can also operate independently, and Shekou's early advantages will be gone, so naturally there is no need to lock it in for a long time.

Because it takes too long, it's not just a matter of whether Yuan Geng will agree, but also about other people behind the scenes and even the central government.

"Can't we try other banks?" Yuan Geng hesitated.

Yang Wendong explained, "No, what I want is priority, which means under the same conditions."

As Yang Wendong explained, Yuan Geng understood and said, "That's fine."

“Okay, this condition will also be reflected in our agreement,” Yang Wendong nodded and said.

This kind of thing naturally needs to be done in the form of documents.

President Wang then asked, "Mr. Yang, what about the interest rate?"

Yang Wendong said, "The normal interest rate in Hong Kong will be fine."

Although he gained more strategic advantage by locking in future benefits in this transaction, outsiders are unaware that this is his unique advantage.
In terms of cooperation, he won't make concessions now because of this; he'll be happy if he can offer a normal interest rate.

When cooperating with the mainland, it's often important not to make excessive concessions; doing too much might lead to being taken advantage of. Mutual benefit through cooperation is the only way to ensure long-term success.

"Alright, if that's the case, then there's no problem." Yuan Geng hadn't expected that such a large-scale cooperation would be concluded so easily.
Little did he know that this was because he had spoken directly with Yang Wendong, the big boss, and decisions between big bosses are naturally swift. If a professional manager had been hired, the various procedures would have taken at least a month or two to finalize.
Yang Wendong said, "Okay, I will have Hang Seng Bank contact you. Once the specific details of the cooperation are agreed upon and the contract is signed, the money will be in your account immediately."

The mainland will be a major opportunity for Hang Seng Bank to grow and expand in the future, and it may even be the only opportunity. Therefore, it is even more necessary to cooperate with the mainland at this early stage.
Looking back at the mainland in the past, as long as the capital invested, did charity, or helped in other ways in the early stages of reform and opening up, it would have yielded rich returns after the domestic economy developed. Many Hong Kong Chinese-funded enterprises and even Southeast Asian Chinese-funded enterprises have successfully obtained returns in this regard.
For example, Lao Li acquired development rights to many ports and highways, the Yanjing Oriental Plaza, and even received permission from the central government to do residential business in China. However, instead of developing these properties properly, he focused on hoarding land.
“Okay, no problem.” Yuan Geng paused, then said, “Mr. Yang, you also own many manufacturing plants. Would you be interested in investing in Shekou?”

Yang Wendong laughed and said, "Your industrial zone is still just wasteland, and you're already thinking of getting me to invest?"

Yuan Geng said, "Haha, this is called being prepared for a rainy day. If Mr. Yang's factory can invest there, I guarantee that I will give him the highest preferential treatment, or even tax exemption."

“Tax exemption isn’t a big benefit. Hong Kong’s manufacturing industry doesn’t have high taxes either,” Yang Wendong said, shaking his head.

Yuan Geng was taken aback, and immediately felt a bit troubled. He couldn't possibly subsidize it himself, could he? He didn't have that kind of money.
President Wang then said, "Mr. Yang, the labor costs in the mainland are very low, much cheaper than in Hong Kong. Investing in a factory there will definitely yield higher returns."

Yuan Geng nodded as well;

Yang Wendong thought for a moment and said, "Alright then, I will arrange for someone to go to Shekou to check out the local situation. Please ask Director Yuan to arrange for someone to entertain us. Once we have a better understanding, I will discuss it internally and see how to invest."

It's certain that I will invest myself, not only in Shekou, but also in future cities like Shenhai, Yanjing, Shanghai, Guangzhou, and so on.
However, it is two different things to take the initiative to propose and to be invited. Whichever party proposes first will be at a disadvantage in subsequent business negotiations. Although I will not deliberately take advantage of the domestic situation, everything should be done in accordance with business principles.

In this era, or rather before 2010, the mainland had a high demand for overseas investment for most of the time, so naturally, they had to take the initiative. Yuan Geng was overjoyed and said, "Great, I'll immediately arrange for the people in Shekou to prepare."

"Okay." Yang Wendong nodded;
In the short term, there's no need for him to go to the Shekou Industrial Zone personally. After all, it's too small at the moment, and it's not appropriate for him to rush there so early. At least let it be built first. Sending his subordinates to take a look, take some photos, and prepare introductory materials is just as good.

However, once the Deep Sea Special Zone is established in the future, he will definitely have to go and see it. The future economy of Deep Sea City will be no weaker than that of Hong Kong, so he will have to seize many early opportunities.
Shekou is still too small in scale. Although it allows sole proprietorship, it cannot accommodate many factories of Changxing Group. Therefore, the main purpose at present is to establish good relations with the mainland side in the early stage.
The next day, under Yang Wendong's orders, representatives from Hang Seng Bank and Changxing Group headquarters visited Xinhua News Agency in Hong Kong, and together with Yuan Geng, they went to Shekou.
The advantage of the three parties negotiating together is that there is a mutual guarantee. Hang Seng Bank knows that after it takes out a loan, Changxing Group will invest, which can guarantee the security of future repayment. Changxing Group knows that Shekou will have sufficient funds to carry out the initial infrastructure construction according to plan.
Although both projects were decided by the big boss Yang Wendong, under normal circumstances, it's just a matter of the boss saying one word and the subordinates running themselves ragged. As employees, they still need to ensure that their own rights and interests are not harmed. Otherwise, if there are any problems in Shekou, whether it's bad debts or investment losses, they will ultimately be the ones who suffer.

After arranging everything, Yang Wendong stopped paying attention to it. These matters would naturally be followed up by his assistant, and any progress would be reported to headquarters.

Time flew by and it was January 20th;
Yang Wendong visited Glory Electronics' core laboratory once again:

Wang Zhiqun stepped forward with a smile and introduced: "Mr. Yang, I have two pieces of good news. The first is that after the craze for 'Tank Battle' passed in the second half of last year, we launched 'Pac-Man' arcade game before Christmas, and it became a hit again immediately."

Orders from the US have already reached tens of thousands of units. It seems the total orders for Pac-Man will not be less than 10 units. This will be another cash cow for our group.

"How much money did we make from the arcade version of 'Tank Battle'?" Yang Wendong asked rhetorically.

Wang Zhiqun replied, "It's about $1.1 million. We're still making a profit of $300 million a month, but the trend is that it will get lower and lower."

“1.1 million? If we include the arcade games from our group, we must have earned at least over 3 million US dollars in the arcade market,” Yang Wendong added.

Wang Zhiqun said, "Yes, that's about right. However, since the main market is in the United States, these funds would incur a lot of departure tax if they were to be transferred out of the United States. So for now, they are only being used through financial means to fund Best Buy and KFC's new store expansion. An additional portion is being invested in the US stock market."

"Okay, let's keep these funds in the US. The US will be a big market in the future. There's no rush to transfer them out. I'll make arrangements later," Yang Wendong nodded and said.
The funds of his many subsidiaries are not interconnected; they are all in his own accounts unless he gives the order.
Previously, some small investments did not yield very high returns, so Yang Wendong only arranged for Changxing Financial to handle them. However, the future gold market will be a great opportunity, and the market can accommodate a massive amount of funds, so more funds need to be mobilized to participate, and some subsidiaries will also get involved.

“Okay, Mr. Yang.” Wang Zhiqun continued, “The second thing is that we have developed our first home video game console, the Famicom.”

"Really, it seems Woz's abilities are truly impressive." Yang Wendong smiled and said, "Then take me to see him."

Actually, developing a game console isn't difficult; the challenge lies in reducing costs while maintaining performance, making it affordable for many families. Once sales are sufficient, the development costs can be spread out, creating a virtuous cycle. Otherwise, the game will fail.
Cost is one of the most important factors for a company. BYD's previous success in the automotive industry was due to its cost control.

Historically, Apple's failure in the mid-80s was attributed to Steve Jobs' desire to develop a perfect computer. The company did manage to develop one after spending hundreds of millions of dollars, but the cost was out of control, and the price was over $8000.
At that price, even the best computer was useless, and ultimately, almost no one wanted it. Apple lost hundreds of millions of dollars and two precious years as a result. This was one of the important reasons why Jobs was kicked out of the company.

Soon, Yang Wendong and the others arrived at another room. Inside the room, there were many red and white devices, about the size of a keyboard in their previous life, with a card stuck on top of them.

Wang Zhiqun explained, "Mr. Yang, this is our Famicom. You can insert a game card in the front, and this cable can also be connected directly to the TV."

Hearing the familiar introduction, Yang Wendong immediately asked, "How much is the pre-sale price of this Famicom?"

Wang Zhiqun said, "Our cost is around $160, the ex-factory price is around $200, and the retail price in Europe, America and Japan should be around $240."

"This price isn't expensive at all," Yang Wendong said with a smile.

Compared to arcade machines costing two or three thousand dollars, this price is really cheap.
Wang Zhiqun said, "Yes, mainly because I know that companies like Sony and Atari are also developing home game consoles. With their R&D capabilities, it shouldn't be difficult for them to develop one."

Therefore, I can't set the price of my games too high; it just needs to be a little higher than the cost. Our core revenue comes from the games we own the copyright to, which is something that no one else can compete with.

Another point is that home video game consoles are exclusive; once a player buys our console, they are unlikely to buy any other console.

"As long as our price is competitive, our game is fun, and we're among the first to appear, it's easy to gain a foothold in the market."

PS: Please give me a monthly ticket
(End of this chapter)