The 1998 E3 Is Approaching
In a fast food restaurant outside Akihabara Station, two young men in their early twenties were occupying a round table in the corner.
Watanabe spread the magazine he had just bought next to his plate and flipped to the second half, the handheld game console observation section.
"Look at this." Watanabe pointed with a straw to the bold text in the middle of the newspaper, "An insider at Sony Interactive Entertainment revealed that they were originally evaluating Color-Screen Handheld Project, but after seeing the GP2's initial specifications and price, the proposal was immediately shelved."
Sitting opposite him, Kobayashi was looking down, frantically pressing the D-pad on his GP2 with both thumbs, playing the train battle in the second stage of Metal Slug.
"Anyone would have to back down." Kobayashi didn't even look up, chewing on his hamburger. "12,800 Japanese yen, including a network cable and an Infrared Port. I thought I'd just play Pokémon when I bought the machine, but last night my brother and I played Plants vs. Zombies two-player flag defense mode for four hours straight. My old Game Pocket is now sitting in a drawer; I don't even want to touch it."
"I finished the second playthrough of Ruby yesterday." Watanabe closed the magazine and took out his GP2 from his pocket. "The magazine said that the map of the Hoenn Region this time contains Regi Puzzle, and Braille Reference Table is required to open the door."
"Did you bring 'Ruby'?" Kobayashi pressed the pause button and pushed the machine to the center of the table.
"I brought it along; I added another Pokémon to my team today."
"That's perfect. I'll go to the school later and get Sato and the others. We'll play a four-player game on the rooftop at noon. Just so you know, don't try to trick me with any experimental lineups."
At the same time in North America, in front of a newsstand in Union Square, San Francisco.
Several high school students gathered around the shelves, browsing the latest issues of Electronic Gaming Monthly (EGM) and GamePro.
The cover prominently features a huge photo of the actual GP2 console, accompanied by the bold text. "The Handheld Revolution Has Arrived."
In a lengthy review, EGM's editor-in-chief wrote, "Don't be fooled by its compact size; the GP2 completely sheds the old-fashioned black-and-white era. Plants vs. Zombies has become a viral epidemic among female college students in North America, while the collaboration between Pokémon Pokémon Ruby/Sapphire and the Electronic Pet has given video games even more collectible value. Sega has proven their determination with four high-quality games: they are no longer just treating handhelds as appendages to home consoles, but are building an independent portable entertainment center. For those players still hesitating about upgrading their hardware, there's only one answer—buy it now!"
The newsstand owner stood behind the counter and tapped on the wooden board. "Hey kids, you can't just look and not buy; there are people queuing up to buy morning newspapers."
"Boss, one EGM, please." A boy wearing a red baseball cap pulled out a five- US dollar bill, slapped it on the counter, rolled up the magazine, stuffed it into his backpack, and turned to run towards Best Buy.
"Why are you running so fast?" his companion shouted from behind.
"Of course I'm going to buy games." The boy waved without turning his head. "I didn't manage to snag a Sapphire game cartridge yesterday. If I'm late today, I'll have to buy a scalper's ticket at a premium!"
The various game sections on Silicon Valley Online were in complete uproar.
In the "GP2 General Discussion Board", the pinned post has accumulated more than 20,000 replies.
"Major media outlets have given all four launch games scores above nine points. Why are those people who were complaining about black screens and ghosting on BBS forums silent now?"
"Forget about the trailers, go look at Walmart. The second batch of stock hasn't even been unloaded from the shelves yet, and there are already over forty people lined up at the back door."
"I just saw Blizzard's collaboration announcement on Battle.net yesterday. Buying GP2 games will also get you an exclusive GP2 icon. Sega's collaboration is disgusting; they're clearly trying to empty my wallet."
"You have to buy it even if it's disgusting. I just bought one from a classmate yesterday, paying an extra ten US dollar. The moment the Mudkip came into the handheld, I knew it was worth it. The picture quality is so much better than the old machines; the colors are so vibrant you can hardly believe it's playing on a handheld."
The unanimous positive reviews from the media became a strong boost to subsequent sales.
The sales figures of 500,000 on the first day and over one million in seven days did not cool down the momentum. On the contrary, after the high praise from major professional magazines, it triggered an even more intense Second Wave of Buying.
Many players who were initially holding off on buying games because they already had GamePocket have given up on waiting for price drops or more games to be released after seeing the overwhelming media comparisons and online experiences shared by their friends.
The release curve for the GP2 stabilized after mid-May.
The factory's three-shift production line is still running at full speed, and although restocking faxes from major retailers are still arriving in bundles every day, the most dangerous initial run on orders has passed.
Hisao Oguchi was finally able to free up his hands and turn his attention back to the other side of the ocean.
There were only two weeks left until the opening of the 1998 E3 Atlanta trade fair.
A thick stack of exhibitor brochures from the Interactive Digital Software Association (IDSA) lay spread out on the desk, with a prominent conference schedule printed on the cover.
This year's E3 saw many changes.
In previous years, the exhibition hall was a battleground for mainframe manufacturers and large software vendors, with booth divisions being simple and crude.
Nintendo, Sony, Sega divided up the most prominent area of the central hall, leaving the rest to traditional game companies like Capcom and Konami.
But this year is different.
Hisao Oguchi casually flipped through the seminar agenda sent by IDSA, his fingertips tracing over several bolded headings.
"High-level Forum?"
The head of the Overseas Affairs Department, standing across the table, nodded. "It was decided at the IDSA council meeting at the beginning of the year. This year, we specifically set aside three days for a closed-door high-end industry summit. The main topics were divided into three areas: the commercialization of game assets, the localization pain points of cross-border publishing, and online promotion and community operation based on the Internet."
Hisao Oguchi leaned back in his chair, flipping through the agenda in his hand. "In the past, when these United States organized exhibitions, they wanted to give all their noise to the screaming players and reporters with their Polaroid cameras. This year, they've actually become patient and are willing to sit down and discuss industry development."
"It's mainly because we were spurred on last year." The manager pulled out a review of last year's exhibition data. "Last year, Carmack threw out the codebase for the Universal Engine on stage, and then those makeshift teams of three to five people in the South Wing Hall stole the show with their low-cost asset packages. Big companies and Wall Street venture capitalists spent a whole year thinking about it and found that the traditional development and marketing model was too expensive and simply couldn't keep up. This year, IDSA spearheaded this forum, requiring participants to pass the qualification review by senior practitioners, and as a result, the two thousand seats were snapped up in three days."
It's not just about abstract, informal activities like forums.
The layout of the exhibition hall's interior was also completely altered.
Hisao Oguchi unfolds the floor plans of the George-ia Dome and the World Congress Center.
Small and medium-sized hardware vendors, who used to be squeezed to the edge of the exhibition hall or even only able to set up roll-up banners in the aisles, have managed to take over two entire independent exhibition areas this year.
"Nvidia, 3df, Intel, and ATI—they've all taken up large booths." The manager pointed to a large area in the west hall. "It's not just graphics card chip manufacturers. Diamond Multimedia Audio cards, Logitech game controllers and Force-Feedback Steering Wheel, and even peripheral manufacturers making computer cases, power supplies, and Mechanical Keyboard —they've all jointly booked several large, comprehensive booths."
"PC hardware has completely broken in." Hisao Oguchi tapped his finger on the 3df booth.
"That's right," the manager said with a wry smile. "Last year, with the release of the Universal Engine, the barrier to entry for 3D game development collapsed. Players who wanted to run games on their computers with graphics comparable to Jupiter had to pay extra for 3D Accelerator Card. Now, in North America geek circles, if a PC doesn't have a Voodoo2 or TNT Graphics Card, you're embarrassed to even say hello. These hardware vendors tasted the sweetness of success, and this year they tripled their marketing budget for E3, putting on a bigger show than second-tier software companies."
As your gaze sweeps across another corner of the exhibition hall's blueprints, the South Hall and connecting corridor areas are filled with countless small squares.
The exhibitor names listed there were all sorts of things.
Besides workshops specializing in making figurines and models, there were also traditional toy giants like Hasbro and Mattel, and even peripheral companies specializing in game-licensed apparel, themed keychains, and poster printing, all of which occupied a thick stack of exhibitors.
"The area occupied by peripheral vendors has almost doubled since last year," the manager explained. "Last year, peripherals for several major titles sold extremely well in North America."
Okay, many of the giants that used to only focus on Hollywood movie licensing for merchandise are now turning their attention to game IPs. Even before the expo has opened this year, their business meeting rooms are already fully booked.
In previous years, E3 was simply a console war.
The competition is about who has more polygons and who has a stronger lineup of exclusive games.
By 1998, the exhibition had quietly evolved into a massive industrial consortium encompassing underlying engines, core PC hardware, supporting peripherals, derivative products, and discussions on business rules.
Capital, tech geeks, and manufacturers from all walks of life are converging on Atlanta from different directions, trying to carve out a piece of the rapidly expanding digital entertainment empire for themselves.
Hisao Oguchi closed the exhibition hall blueprints, pulled a red pen from the drawer, and circled the names of several key exhibitors on the edge of the brochure in red.
Next, Hisao Oguchi drew a circle with his red pen at the location of "George-ia World Congress Center East Hall".
That was the main booth that Sega secured this time.
"How's the setup for the North America branch going?" Hisao Oguchi capped his pen and looked up to ask.
"The entire main exhibition area has been given to GP2." The head of the Overseas Affairs Department pulled out a construction elevation drawing from a folder. "All thirty-six demo stations have been connected to Sharp Reflective-Screen Brightening Lights. Pokémon Ruby/Sapphire, Plants vs. Zombies, Metal Slug GP2, including Yu-Gi-Oh! -Oh! and Ace Attorney which will be released in the second half of the year, all have their own dedicated demo stations. Sega of America even planned to get a miniature version of those hot air balloons from Akihabara and hang it on the ceiling of the exhibition hall, but the size was limited by the exhibition hall, making it much smaller than their initial application. However, they still did it, after all, something is better than nothing."
Hisao Oguchi flipped through the booth layout. "What about the home console section? How much space is reserved for Jupiter?"
The supervisor hesitated for a moment, then held up two fingers.
"Just two serious blockbusters: Fast & Furious 2 and the long-delayed Jurassic Park 2."
The room fell silent for a moment.
Hisao Oguchi rubbed his temples, opened a drawer, and took out a photocopy of an old contract.
"Those vampires at Universal really gave us a hard time in the second half of last year."
The supervisor gave a wry smile, "That's right. They've been watching Sega eat meat, and they're practically going crazy with envy."
Ever since the movie "The Clear and Present Danger," adapted from Tom Clancy's novel, became a huge hit in both theaters and video games a few years ago, Sega has found a lucrative path in Hollywood through "movie-game synergy." From "Fast & Furious," "The High-Speed Pursuit," to the first "Jurassic Park," and Pixar's "Toy Story," Sega has always timed its releases perfectly, arranging for game demos of the same names in theaters.
Players would walk straight into the game store after leaving the theater, buy the game, and continue enjoying it at home.
Every deal is a win-win situation; not only do Sega's numbers look good on paper, but Hollywood studios also get a huge cut.
However, when "Jurassic Park 2: The Lost World" was in pre-production last year, Universal Pictures executives changed their minds.
Sega doesn't have much say in the film industry, Universal is extremely resentful seeing Sega make a lot of money from their dinosaur IP. Last year, while the film was still in production, Universal sent a business representative directly to Tokyo, demanding that the revenue share from the adaptation rights be doubled by one and a half, and even asking for an outrageous advance payment.
At the time, Hisao Oguchi had only recently taken over as Operations Director, and he directly rejected Universal's draft contract in the conference room.
Universal didn't mince words, immediately declaring: if Sega dared not agree, Universal would immediately sell the Dinosaur adaptation rights to Sony or Nintendo.
"Sony Interactive Entertainment almost took over back then, didn't they?" the manager recalled last year.
"Sony isn't stupid." Hisao Oguchi leaned back in his chair, twirling the pen in his hand. "Ken Kutaragi walked out with his people before the closed-door negotiation meeting even ended after hearing the guaranteed minimum figure offered by Universal. Nintendo was even less likely to accept at that time. They wouldn't even spend that much money to promote their own IPs, how could they possibly take out this amount of cash to fill Universal's hole?"
The Hollywood team took the dinosaur IP and went around to several major console manufacturers and top-tier third-party developers, only to be turned down everywhere.
By the time the movie was almost out of theaters across the United States, these United States in suits returned to Sega's negotiating table, looking dejected.
By then, the movie's popularity had cooled considerably, Sega ruthlessly pushed the purchase price down to the absolute bottom line.
Universal reluctantly signed the papers, but because of these back-and-forth negotiations, the game's development cycle was delayed by a full six months. The game, which was supposed to be a big hit last summer with the dinosaur craze, was dragged out until this summer.