Sony's "Trojan Horse" (4,000 Characters)

Late October, North America.

In Sega of America office, the phone rang like a string of firecrackers, exploding incessantly.

Every employee wished they had eight hands, so they could answer the phone and process the flood of order faxes at the same time.

Tom Kalinske, holding the sales statistics he had just received, grabbed the phone, dialed Nakayama Takuya's landline in Tokyo, and unleashed a torrent of abuse into the receiver.

"Takuya! You guys are geniuses! How did you develop such an amazing game!"

On the other end of the phone, Takuya was sitting quietly in his office, with the Tokyo morning sun shining through the window.

He moved the microphone a little further away, waiting for Kalinske's roar to subside.

"It seems things are going well?"

"Not bad?!" Kalinske's voice rose another octave. "Not bad! Absolutely insane! Everyone's gone mad!"

"Our warehouse is empty! The first batch of 10,000 limited edition bundled consoles we prepared were gone in less than a day! In just one day!"

"The distributors' phones are ringing off the hook. They're all asking when the next batch of goods will arrive! They say gamers are lining up at the store with cash, refusing to leave until they get a console!"

Kalinske took a big gulp of water, his voice a mixture of exhaustion and ecstasy.

"Takuya, listen carefully to this number."

"MD's sales in North America in the first week after the price reduction -."

He paused, seemingly to confirm that he hadn't misread the report in his hand.

One million three hundred thousand units!

"My God, we sold 1.03 million units in a week! That's more than we sold in the entire last quarter!"

Even though Takuya had already anticipated the plan's success, his heart still pounded at the number.

"What about Sonic the Hedgehog?" Takuya interrupted Kalinske's call.

"Sonic? Ha!" Kalinske laughed like a two-hundred-pound child. "Sonic the Hedgehog sold more copies than the Mega Drive."

"Well done, Tom," Takuya said sincerely.

"No, we did a fantastic job," Kalinske corrected. "Now, the entire North America market is talking about us, talking about MD."

Let's discuss that fast-moving blue hedgehog.

After hanging up the phone, Takuya let out a long sigh of relief and leaned back in his chair.

Before the economic crisis hit Japan, Sega finally fully revitalized Mega Drive sales in North America.

North America consumer spending power is truly impressive.

It seems that Kalinske's analysis of rising demand for games in North America is true.

Just as Sega North America Branch was celebrating its million-unit sales, another major piece of news was crossing the Pacific Ocean and creating a huge wave in Japan.

Mitsubishi Estate acquired an 80% stake in the fourteen main buildings of Rockefeller Center in Manhattan for a record-breaking US dollar 846 million, thereby gaining actual control of the entire complex.

The news caused a nationwide uproar.

The already fervent economic sentiment in Japan exploded as if a bucket of oil had been poured on it.

Managers at major banks waved their checkbooks, searching for the next "Mitsubishi" poised to go overseas, vying to finance overseas acquisitions.

Sega Headquarters, Investment Department office.

Director Hoshino slammed the financial newspaper he was holding onto the table, making a crisp "smack" sound.

He let out a long sigh of relief, as if a huge burden had been lifted from his shoulders, and leaned back on the sofa.

"I have to say, Mitsubishi really went all out with this."

The Director Sugiura, also put down his newspaper, picked up his teacup, and took a sip. The scalding hot tea calmed his somewhat unsettled mind.

"Yes, over eight hundred million US dollar, they don't even blink. Right now, all the money in the market is eyeing Hong Kong overseas; who would even look at this little bit of soup and water in China?"

"Right now, the whole of Japan is cheering for Mitsubishi, as if we're the fools going against the tide."

Director Hoshino loosened his tie, a hint of relief on his face. "Just two days ago, a bank called me, asking if Sega had any overseas expansion plans, saying the loan amount and interest rate were negotiable. They probably don't know that we've already converted all our domestic assets into cash."

"Who says otherwise?" Director Sugiura's eyes held a hint of relief, but also a touch of lingering fear. "In this situation, thinking of cashing out and leaving domestically? Too late. Who has that much cash left to take over? Everyone's following Mitsubishi's lead, thinking about how to move their money overseas."

He continued, "Using land as collateral to get cash, and then using that cash to buy land overseas. It sounds like a simple transfer from one hand to the other."

But if domestic real estate prices collapse and the collateral becomes worthless, the bank will be the first to come knocking, demanding additional margin. What will you use to do that? Sell the overseas assets you just bought? At that point, you might not even be able to sell them.

Director Hoshino nodded in deep agreement. "Executive Director Nakayama really sees things clearly. Cash is king, and it's always good to have it in hand. Look at Sony, they bought a film company and hired a bunch of Hollywood bigwigs to serve them, but whether they can make money is another matter. Mitsubishi, on the other hand, has it easy, buying buildings to rent out and waiting for the value to appreciate."

"Worry-free?" Director Sugiura chuckled. "I don't think so. But no matter what they do, it's none of our business. What we have now is solid cash, plus those blue-chip stocks that Executive Director Nakayama recommended we keep an eye on. That's much more reliable than any United States landmark."

Sony Headquarters, president's office.

Norio Ohga sat behind his large desk, looking expressionlessly at his three subordinates.

The team consists of tech enthusiast Ken Kutaragi, Nobuyuki Idei who oversees market strategy and digital technology research and development, and Ryoji Chubachi who is in charge of electronic components and semiconductor manufacturing.

These three individuals are the most hawkish members within Sony, eager to break into the electronic entertainment industry.

"So, the conclusion is that we can't replicate it?" Norio Ohga's voice was unreadable.

Ken Kutaragi stood in front of Norio Ohga's desk, his expression revealing a hint of barely concealed frustration.

"President, our previous plan can no longer continue."

Ken Kutaragi's tone was full of frustration.

"The CPU that Nintendo customized for the Ricoh Famicom was manufactured by Ricoh, but the core architecture was entirely designed by them. We couldn't simply copy it without infringing on their patents."

Forcibly copying not only carries legal risks, but also faces unavoidable technical barriers.

This road was blocked from the very beginning.

After listening to Ken Kutaragi's report, Ryoji Nakata frowned. As someone who worked in semiconductors, he knew better than anyone how difficult it was to bypass a specially designed CPU.

Nobuyuki Idei gently twirled the pen in his hand, his eyes behind his glasses revealing no emotion.

"Since we can't take it secretly, let's ask for it openly." Nobuyuki Izumi suddenly spoke, his voice not loud, but it invigorated everyone present.

Ken Kutaragi, then asked, "Idei- san, what do you mean?"

"Since we can't take the shortcut, let's take the main road." It was Nobuyuki Idei spoke; he was in charge of market strategy, and his thinking always managed to find a new way out of a dead end.

"Nintendo is treating us like thieves now. But they can't do without our hardware support, and that's our bargaining chip."

Ryoji Chubachi nodded and continued, "That's right. Especially CD-ROM technology. NEC's PC Engine has already paved the way; although it didn't sell very well, it proved the potential of CDs as a game medium."

"Sega is also very interested in CD technology. Sega's executive director, Nakayama Takuya, even had Yu Suzuki proactively approach us to collaborate on improving CD-ROM reading performance in order to develop the Taiko no Tatsujin arcade game. I even heard from our engineers stationed at Sega that they already have a secret project to develop CD peripherals for the MD, but it's temporarily on hold due to reading and compatibility issues. They're currently working with our engineers to overcome these challenges."

"Since Sega's Nakayama Takuya is so optimistic, it means this is the future, and Nintendo's Yamauchi Hiroshi can't possibly not see it. This is practically home-field advantage for Sony, which owns the CD-ROM standard." A smile appeared on Nobuyuki Idei's lips.

Mentioning the name Nakayama Takuya creates a slightly awkward atmosphere in the office.

This young man has recently caused quite a stir in the industry.

Ken Kutaragi's eyes lit up instantly. He understood Nobuyuki Idei's meaning and excitedly added, "We can propose to Nintendo that we develop a dedicated CD-ROM drive for their Super Famicom! We can use Sega's actions as an excuse to tell them that if they don't keep up, they'll be left behind by the times!"

"This is our open strategy." Nobuyuki Idei nodded.

Norio Ohga interlaced his fingers and placed them on the table, leaning forward slightly. "Continue."

"We want to sign an agreement with Nintendo under the guise of a collaborative development of CD-ROM drives. A special agreement."

"This is just the first step." Nobuyuki Idei held up one finger, his eyes behind his glasses gleaming with calculation. "Within the shell of this overt conspiracy, we'll fill it with our own hidden agendas."

He looked at Ken Kutaragi, his eyes gleaming with a sinister light.

"We helped them develop CD-ROMs, but in exchange, Sony had to obtain a license from Nintendo to launch our own console that would be compatible with Super Famicom cartridges and CD games. I've even thought of a name for it: 'PlayStation'."

"Nintendo provides cartridge compatibility, we provide CD technology. Sounds fair, right?" Nobuyuki Izumi smiled.

But the real key lies within the agreement.

"First," Nobuyuki Idei raised a finger, his voice even lower, "Sony can independently publish CD games for the PlayStation platform without Nintendo's approval, without their authorization, and naturally without paying them a single Japanese yen in royalties."

"Not only that," Ryoji Chubachi added, a shrewd businessman's expression revealing his shrewdness, "All third-party CDs developed for this platform..."

For every copy of the game sold, we Sony, have to pay royalties!

Ken Kutaragi gasped.

This isn't just an open conspiracy; it's like planting explosives in Nintendo's backyard!

Nobuyuki Idei smiled, his tone becoming even more playful, and continued to throw out a deeper trap, "Third, and most importantly."

The agreement doesn't specify the exact features of the PlayStation console. It only mentions compatibility; how it will be compatible, and which chipset will be used, that's our responsibility.

"Today we can say we're adding a chip to 'improve compatibility,' and tomorrow we can say we're replacing the CPU with a more powerful one to 'optimize read speeds.' We keep adding new hardware features to the host, effectively launching our own next-generation host."

"At that time, Yamauchi Haku will find that the licenses he personally signed for us have ultimately become a contract of servitude," Ryoji Chubachi continued, picking up where Izumi Nobuyuki left off.

"His proud golden empire will watch helplessly as we use CD technology to build a new castle on his foundation. And Nintendo will ultimately become Sony's 'cartridge game subcontractor'!"

"Boiling a frog in lukewarm water."

"By the time Nintendo realized what was happening, it was too late."

A smile finally appeared on Norio Ohga's face; he admired this ruthless and unscrupulous approach.

Who will draft this agreement?

"I suggest that Toshio Sakai and Katsumi Kugemoto be in charge of drafting the specific agreement," Nobuyuki Ii replied without hesitation. "These two directors are the legal heroes who just helped us acquire Columbia Pictures. I believe they will be happy to tailor a seemingly flawless 'contract' for President Yamauchi, one that Nintendo cannot refuse."

"Very good." Norio Ohga stood up, walked to the huge floor-to-ceiling window, and looked down at the Tokyo night view.

"Kutaragi."

"Exist!"

"Go." Norio Ohga turned around, his gaze fixed intently on him. "Go and build the most magnificent Trojan horse for Nintendo."

"We must make sure that Yamauchi Haku willingly and personally drags it into the gates of Kyoto Nintendo."

After making the arrangements, Norio Ohga did not end the meeting. He stood up, walked slowly to the huge floor-to-ceiling window, and looked down at the brightly lit Tokyo below.

"Acquiring Columbia Pictures is just the first step."

"We've acquired the United States story, but it takes time to digest it and make it our own. Until then, Sony can't stop."

He turned around and his gaze swept over his three trusted lieutenants in turn.

"Morita's 'hardware plus content' strategy is the foundation of Sony's future. Movies, games, and music are the content closest to our hardware and can best support it! Only when we fill the gap in games will our three pillars of content be complete."

Nobuyuki Idei adjusted his glasses and added, "Yamauchi Haku Usagi would never have imagined that we, who had just stirred up a storm in Hollywood, would turn around and stab him in the back."

"It's more than just stabbing him in the back." A businessman's greed and excitement surfaced on Ryoji Chubachi's face. "We're making him hand his own lifeline to us. Once our PlayStation hits the market, Nintendo's royalty empire, every penny of profit..."

Everything will first flow into Sony's coffers. The money-printing machine they painstakingly built will henceforth be solely for printing money for us!

These blunt words suddenly heated up the atmosphere in the office.

Norio Ohga's attention eventually fell on Ken Kutaragi, the vanguard of this plan.

"Kutaragi- kun, you must be having a hard time in Kyoto."

"It's not hard work, Ohga." Ken Kutaragi adjusted his glasses, a wide smile spreading across his face. "I'm quite looking forward to seeing what kind of interesting expression he'll have when he personally signs that agreement to 'take down Sega.'"

Nobuyuki Idei and Ryoji Chubachi both laughed.

This is exactly what they want.

A "messenger" who is technically impeccable but mentally aggressive.

"Very good." Norio Ohga was satisfied with Ken Kutaragi's reaction.

He sat down again, placed his hands on the table, and gave the final order.

"Idei -san, Chubachi- san, you two must cooperate fully. Make sure our Trojan Horse hits the moment the city gates open..."

One hit, one kill!