Return to 1958 and build a century-old giant

Chapter 812 Home Game Machines with Amazing Profits
"Yes, the analysis is very accurate. This business strategy is excellent." Yang Wendong nodded and then asked, "So, are the types of game cards limited to the arcade games we've had before?"

Wang Zhiqun said, "Yes, our previous arcade games received very good feedback in the market, so I think the effect should be just as good after they are transferred to the Famicom."

“It certainly won’t be bad, but home game consoles have a competitive advantage, while home games don’t,” Yang Wendong said. “Once players buy game cards, they can play for free at home every day, and even the best games will get boring after a while.”

Wang Zhiqun immediately understood his boss's meaning and asked, "What Yang Sheng means is that we need enough games to stabilize this market."

“This is necessary,” Yang Wendong nodded.

This is just like the operating system in the previous life. Whether it is a mobile phone or a computer, it is not difficult for the University of Tokyo to create it. The difficulty is that there is no application.
The same applies to game consoles. Without enough game software, even the best game console is just a useless plastic lump.

Wang Zhiqun said, "I understand. Then I'll have to increase the game's output."

In the arcade market, a single game can sustain itself for more than six months, and those who already have a backup at home can even wait for it to be released.
But the home video game console market follows a completely different logic.

Yang Wendong shook his head and said, "No matter how many more are added, it's useless. One company can't meet market demand; only many companies can."

Wang Zhiqun immediately asked, "Does Mr. Yang mean we should purchase the copyright from other manufacturers?"

“You can do that at first, but it's not sustainable in the long run; the risks are too great.” Yang Wendong shook his head and said, “Are you familiar with the current revenue-sharing model for Hong Kong films?”

Wang Zhiqun nodded and said, "I understand. Mr. Yang means that we provide the platform and other game developers provide the games?"

"Yes, that's the idea, but we're just talking about it now. To achieve that, we need to have a certain market presence before we can move on to the next step," Yang Wendong said.

This is all a positive cycle. First, there is a certain market, then third parties are attracted. As there are more third-party games, the market for one's own hardware products will inevitably expand, which in turn attracts more third-party companies.

Ultimately, the company gains market share, third-party companies receive revenue sharing, and players get more exciting games – a win-win-win situation.
However, the prerequisite is that this business logic can be developed; let's take the first step first.

“That’s true.” Wang Zhiqun said, “Mr. Yang, the Famicom will be tested in Hong Kong for another month, and then it will be sent to Japan for small-scale market testing.”

"Send it to Japan? Isn't the market in Hong Kong big enough?" Yang Wendong asked.

Wang Zhiqun said: "That's right. The Famicom itself costs 1000 Hong Kong dollars, and each card costs several hundred Hong Kong dollars. Ordinary Hong Kong families can't afford it. Moreover, gaming culture is not very popular in Hong Kong, so I can only choose Japan as the test site."
However, for risk management purposes, we only conducted testing in Hiroshima and Nagasaki, where we already have after-sales teams to respond quickly should any issues arise.

"Okay, that's settled then. Let me know when you have the results," Yang Wendong nodded and said.

Wang Zhiqun replied, "Yes, Mr. Yang."

Yang Wendong added with a smile, "The New Year is coming soon. According to tradition, we send red envelopes or gifts to colleagues who work overtime."

"Understood, Mr. Yang. Thank you for your concern," Wang Zhiqun said.
The Spring Festival of 1979 was fast approaching; this was Yang Wendong's 20th Spring Festival since he traveled to Hong Kong.
On either side of the main gate of the Yang family villa is a pair of gilded Spring Festival couplets: "May good fortune shine upon the family and prosperity be abundant; may auspicious energy fill the door and people enjoy peace and health."

Inside the room, under the crystal chandelier, red Chinese knots swayed gently, kumquat trees and blooming orchids were placed on the coffee table, and even the stair railings were wrapped with red ribbons.

"Come on, Zhiwen, you're taller than me, help me hang a lantern," Yang Wendong said, directing a young man beside him.

The young man was Yang Zhiwen, his eldest son, who was born in 1961 and was about to turn 18 this year and become an adult. Among the Yang family's descendants, he was Yang Wendong's most valued eldest son.
Compared to himself, Zhiwen was taller, which was normal. The boy in his body grew up in a shack, often going hungry and not having enough meat. The current Yang family descendant, on the other hand, would not lack nutrition; in fact, they would worry about overnutrition. In his previous life in the mainland, there were also a lot of diseases of affluence, such as high blood pressure, high cholesterol, and high blood sugar.
Yang Zhiwen jogged over and said, "Okay, Daddy, leave these kinds of things to me from now on."

Actually, it's possible to arrange for others to do it, but during the New Year's season, the Yang family members do some things themselves, unless there are some dangerous things, such as needing to climb high or having the risk of electric shock, then they will find a professional to do it.

After a flurry of activity, the Yang family enjoyed the meal they had cooked, a tradition they followed. Yang Wendong also went into the kitchen and prepared three dishes.
Although it had been a long time since they had cooked, the Yang family's cooking was still quite good. After all, the oil and vegetables were of excellent quality. As long as it wasn't burnt or too salty, there wouldn't be any major problems. Besides, Hong Kong people also like sweet food, which made it even easier to cook.

After dinner, the family sat in the living room watching TV. TVB holds a Spring Festival Gala every year, which is attended by countless TVB stars, as well as many stars from the film and music industries, and even Li Xiaolong may appear.

The Yang family rarely gets together, so they chat idly and eat some fruit.

"Zhiwen, the high school entrance exam is coming up soon. Your grades are pretty good. Have you thought about which country you want to go to for university?" Yang Wendong asked.

The high school graduation exam is similar to the college entrance exam in mainland China in the previous life;
In fact, no matter where you are, you still have to take exams to get into university, because there is always a selection process for students. It's just that the policies are different in different places, but the essence is the same: the good go in and the bad go out.
Yang Zhiwen will also be taking the Hong Kong Certificate of Education Examination this year. His grades are usually quite good. Even a child from an ordinary family can get into a local Hong Kong university.

However, Yang Wendong still planned to send him abroad. Hong Kong's education at that time was still inferior to that of developed countries overseas, and it also couldn't compare in terms of broadening his horizons.

Yang Zhiwen replied, "Daddy, I want to go to America, but I'm not sure yet whether to go to Stanford University or Columbia University in New York."

"Have you decided what major you want to study?" Yang Wendong asked.

Yang Zhiwen said, "I plan to study business administration and also learn about electronics. I don't need to be an expert, but I need to understand it. Daddy, you once said that the next 30 years will belong to the electronics industry."

"Okay, in terms of electronics, Stanford is still a bit stronger, but since you're interested, New York is fine too." Yang Wendong thought for a moment and said, "How about this, after the New Year, you go to the United States and visit two schools yourself. I'll arrange for someone to contact the school board members there, and they'll make the arrangements for you." In his previous life, many people online felt that the mainland's college entrance examination, where one test determines one's fate, was a bit unfair, but in Yang Wendong's view, it was actually very fair. Because there can't be a perfect advancement model; for example, if someone happens to get sick during the college entrance examination, they can only accept their bad luck.
Many universities in Europe and America rely on a recommendation system. This means that in addition to meeting the basic requirements, a recommendation is required, which means having a background is necessary for admission. Of course, if a student is exceptionally talented in a certain area, they can also be admitted.

However, most students still get in through the recommendation system, and some who don't even meet the basic requirements can still get in as long as their fathers donate money.

In Europe and America, this is true freedom—the freedom of the rich.
Su Yiyi said, "Brother Dong, I'm a little worried about Zhiwen going to America alone."

Yang Wendong said, "It's alright. Lin Youtian has some professional bodyguards in the United States. When I went to the United States before, they would protect me. He will also make arrangements for Zhiwen's trip this time."

Secondly, the safety situation in Europe and America is not bad; as long as you avoid slums, you'll be fine, and the safety level inside universities is even higher.

In this era, Europe and America are still the absolute leaders in the global economy. With a good economy, social security is naturally not bad either. Compared with decades later, it is much better.

Of course, there are chaotic areas too. After all, guns are not controlled, and occasional dangers cannot be completely avoided. However, as long as you don't go to these places, the probability of encountering such things in economically developed areas or schools is very low. Absolute safety does not exist. You can get into a car accident whether you are driving or walking. You can only try to avoid it as much as possible.

"Okay, then I'm relieved." Su Yiyi nodded.

Yang Wendong then looked at his son: "You're all grown up now. You should go out and explore on your own. Be careful when you go to the United States this time, and make sure you know which university you want to attend."

In a few years, when my child graduates, I will need to train a successor. In this regard, it is even more important than many careers themselves.

Safety, health, and academic choices are all things he needs to pay attention to.

Yang Zhiwen said, "Okay, Daddy, I will choose carefully and pay attention to safety."

Time flew by and it was already mid-February, the start of a new year;
Negotiations between Changxing Group, Hang Seng Bank and Shekou Industrial Zone went smoothly, and the first payment of HK$5000 million was quickly transferred to Shekou Industrial Zone's account. Construction in Shekou began in earnest.

Yang Wendong also learned about the situation from the photos and documents. He was very satisfied with this. Although Shekou was not large in scale, it was a very good example. Once it was successfully developed, other places in the country would follow suit, especially in the deep sea.

He had long wanted to invest in Shenzhen, but the policies were not yet favorable, so he could only wait a few more months. Once Shenzhen became a special economic zone, his opportunity would arrive.
In the early stages of reform and opening up in China, the pace was still very slow, and Yang Wendong was not in a hurry. In fact, in the early 80s, there were not many projects that he could invest in on a large scale. China was also quite cautious about introducing foreign investment. They would not accept it if there was even the slightest risk. So if he wanted to make some investments, he had to think of a win-win solution to avoid risks on either side.

But that was a long time ago. In the late 70s and early 80s, what Yang Wendong cared about most was the overseas market, especially the sales of his own electronic products in markets such as Europe, America, and Japan.

February 12th, a rainy day, a light drizzle that dropped the temperature in Hong Kong considerably;
"Knock knock knock~~" A knocking sound came from the door. Yang Wendong turned around and said, "Come in."

Wang Zhiqun from Honor Electronics walked in, and Yang Wendong asked with a smile, "How's the feedback on the Famicom in Japan?"

Wang Zhiqun said, "It's very good. Japanese consumers like it very much, especially our game cards such as 'Chinese Blocks,' 'Tank Battle,' and 'Space Invaders.' Some of them can cost as much as half the price of the machine, but many people are still willing to buy them."

“Of course. Each game in the arcade isn’t expensive, but if you play a lot, the total cost adds up. Once you buy the cards, they’re all yours.” Yang Wendong smiled and asked, “How many have been sold in the two cities?”

Wang Zhiqun said, "In two months, we sold more than 5000 units in two cities. If we were to sell these units in the whole of Japan, we would have sold at least 5 units. And this is without us doing any large-scale advertising."

If this were in the US, it would be normal for the console to sell millions or even more a year, and the sales of game cartridges would be several times that of game consoles.

As you predicted, this market is indeed much larger than the arcade market.

A single Famicom (Nintendo Entertainment System) console can generate a profit of $40 on your end, while the profit from various game cards ranges from $20 to $50, depending on how fun the game is; the more fun the game, the higher the price.
Furthermore, the game itself was developed during the arcade era. In terms of cost, all that's needed is to place it on a card. The cost of producing the card is also not high, so the profit margin of the card is frighteningly high, reaching 60-70%. The other major expenses are mainly marketing and channel costs.

Once the huge European and American markets are tapped, the profits will far exceed those of the previous arcade games. There will even be more games in the future, and the cards will continue to generate income. It can be said that as long as a family buys a game console, it will continue to send money to them in the future.

"Of course, the largest market share will be for any product targeted at the civilian market, and that will be the main focus of our future products," Yang Wendong nodded.

Don't be fooled by the seemingly high profits of some industries, such as arms sales; in reality, their scale is far smaller compared to everyday consumer goods that everyone needs.
The vast majority of the world's top 500 companies are of this type.

Wang Zhiqun said, "Mr. Yang, there haven't been any reports of mass quality issues in the Japanese market, so I plan to enter the US market in March through Best Buy and Walmart channels."

“Okay, make the necessary preparations for after-sales service. Also, discuss with RCA whether we can air ads in prime time on NBC,” Yang Wendong continued.

The group also has many partners, and RCA is one of them. The two have a joint venture in Hong Kong to produce high-end color TVs. In the early years, it was for the Commonwealth market, but Hong Kong has good control over various costs and quality, so it has also begun to enter the Asian market.
The RCA TV factory in Hong Kong alone has an annual output of up to 200,000 units and a total turnover of over US$100 million, which has also brought a significant boost to Honor Electronics' industrial chain.
In other aspects, the group also invests heavily in advertising in the United States, and RCA owns NBC television station, so the cooperation between the two is perfect.

The complementarity between the two companies in different fields has allowed their cooperative relationship to last for many years.

"Okay, Mr. Yang."

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