The Avalanche Begins
The message from the Bank of Japan was indeed accurate.
Less than a week after Mieno Yasushi took office, a new round of interest rate hikes arrived as expected.
On December 29th, the last trading day of the first year of the First Year of Heisei, the Nikkei 225 Index surged to an unprecedented peak of 38,915 points in a final frenzy.
Since the Plaza Accord in 1985, the index has risen by as much as 270%.
Looking at this sky-high market value, the entire Tokyo, and even the whole of Japan, is immersed in this capital frenzy.
However, the Nikkei 225 Index began to decline after the New Year.
Countless ordinary people who entered the stock market with the tide of speculation thought that the slight pullback in their accounts was just a normal technical adjustment in a bull market.
But those professional institutions that have been immersed in the market for many years have sensed the end of the world.
They knew that the game of musical chairs, which had lasted for five years, had come to an end.
The final blow landed in the hands of everyone still remaining in the stadium.
A silent escape has begun.
Initially, the institutions hoped to exit gracefully, attempting to retain as much of their paper profits as possible.
However, on January 12, 1990, the Nikkei Index plummeted without warning, shattering all illusions.
Panic spread through the market like a plague.
The desperate, stampede-like sell-off orders, like the first snowflake in an avalanche, instantly triggered a torrent that devoured everything.
The following day, Sega held an emergency board meeting.
Before the meeting officially started, the conference room was already filled with smoke, and the atmosphere was as heavy and stagnant as a downpour washing over a scorching summer road.
On the expensive mahogany table, instead of the spirited reports, there were rows of stock market quotes that were so green they made one's heart race.
The meeting room was filled with anxieties about their own assets and concerns about their family and friends.
"My God, this is the end of the world! My in-laws' company lost three billion in just one day yesterday!"
"My brother-in-law's company was celebrating New Year's orders yesterday, and this morning the bank came knocking on their door to withdraw their loan!"
"I just came from the securities company. The lobby was filled with crying, and several people fainted."
"Let's not even talk about anyone else, what should Sega do now?"
Worry, fear, despair—a mix of negative emotions turned the meeting room into a massive venting session.
Director Hoshino and Director Sugiura of the Asset Management Department exchanged a glance, both looking terrified.
Six months ago, it was these two who most fiercely attacked and used the most vehement language against the cash-out plan proposed by the Nakayama father and son at the board meeting.
Previously, those in the board who supported the liquidation of the Nakayama family's domestic assets were either staunch allies or adversaries who were happy to see Hoshino and Sugiura suffer.
Most of them didn't really believe that rhetoric, but rather took it as an excuse that Nakayama and his son made to promote their overseas strategy.
Some people believe that it was a far-fetched excuse used by the crown prince to suppress dissent in order to seize power.
"Hoshino -kun—" Sugiura's voice was dry, like sandpaper scraping, "We—we used to laugh at him—"
Hoshino didn't answer, but just stared blankly at the table.
laugh at?
It was more than just ridicule.
They even used every means at the time to try to prove that the young man was talking nonsense.
But what was the result?
Every piece of evidence they found was like a resounding slap in the face, a brutal blow to their own cheek.
The young man simply gave them a ticket to "Noah's Ark".
A ship ticket they almost tore up with their own hands!
Just then, the conference room door was pushed open.
Nakayama Hayao and his son Nakayama Takuya walked in.
Nakayama Hayao sat in the main seat, while Takuya sat to his side and slightly behind.
He remained calm and composed, as if the financial tsunami outside the window was nothing more than a ripple in the pond in the backyard.
He glanced around, observing the panic on the faces of the board members, and calmly began to speak.
"It seems everyone knows what happened."
The entire room fell silent.
All eyes were on the father and son.
There was no longer scrutiny or questioning in that gaze, only a near-reverent awe.
Director Hoshino could no longer contain himself. He stood up abruptly and bowed deeply to Nakayama Hayao.
"President! I apologize for my foolishness and shortsightedness six months ago!"
"If it weren't for your unwavering insistence, Sega would probably be just like those other companies, torn apart by this stock market crash!"
His words were like a switch.
In the conference room, the directors' voices of agreement rose and fell.
"Yes! The president and executive director's foresight is simply divine!"
Nakayama Atsuo raised his right hand, signaling everyone to stop their sycophantic flattery.
He said calmly, "Gentlemen, I think we don't need to panic too much about this 'stock market crash'."
"As you all know, we began shifting our investments and funds to the European and American markets six months ago, and the transfer was completed last November. This included various investments within the gaming industry, as well as the acquisition of high-quality blue-chip stocks that allow for flexible capital allocation."
"As for the other arrangements made in advance, Takuya will explain them to everyone. Please feel free to add any suggestions or additions you may have."
Nakayama Takuya stepped forward and projected the documents in his hand onto the projector.
"Besides investment and capital transfers, we've also significantly expanded our presence in the North America market through price reductions implemented by our North America president, Tom Kalinske. Our partnership with Ubisoft in the Europe market is also steadily growing. Therefore, even with declining domestic consumer spending, our overall game market shouldn't shrink. At the very least, it will certainly be much better than Nintendo, whose business is primarily in China."
Takuya finished speaking, he shrugged playfully, which made the board members in the conference room relax a bit.
"Of course, we're not abandoning the domestic market. For development teams that have completed game development in the last two or three months, I've adjusted some of the development plans, shifting some focus towards arcade and handheld game consoles. Because of the economic downturn in China, affordable entertainment will become mainstream. We want our games to become cherished memories for players during this economic downturn."
"I've also scheduled all the games for release before December to ensure they fully complete the core sales cycle of Christmas and New Year and have already recouped their investment before the New Year."
"In addition, I recently discussed with the head of the Hattori at Sega Galaxy that Sega Galaxy should proactively collaborate with some affordable brands to launch affordable co-branded products, ensuring that our brand can maintain sufficient exposure and cash flow during the economic downturn."
At this point, Takuya looked at Director Hattori, who was not far away.
The Hattori nodded. "Yes, the more the economy declines, the more valuable these affordable consumer goods become to us. We've already reached a preliminary cooperation agreement with Uniqlo this week. Several other fast-fashion brands are also very interested in our cooperation plans."
Finally, we'll push some used SG-1000s and handheld consoles to Eastern Europe to cultivate this emerging market, and also use the SG-1000 recycling program as an opportunity...
"We'll offer discounts on consoles and cartridges to our players, so they'll remember our kindness even more during this difficult time."
"These are the main arrangements for this period of economic downturn for now. Your suggestions and additions are welcome."
Takuya bowed slightly and sat down.
The atmosphere in the conference room gradually shifted from initial shock to astonishment, and finally to deep awe and admiration.
These decisions, which we initially considered "unnecessary" or even "inexplicable," now appear to be meticulously planned and flawlessly executed.
At the end of the meeting, the board members added some suggestions on paying attention to the supply chain and partners and then adapting accordingly, thus concluding what should have been a discussion on "crisis response." However, it inexplicably turned into a personal showcase of Takuya's achievements.