Sony X Namco

"Namco has always wanted to make its own home console, having tried as early as the PC-E era, but due to limitations in funding and the development of semiconductor technology, it has never been able to achieve significant success. If Namco doesn't have a say in hardware platforms, it will always be at the mercy of others—especially that old man from Kyoto."

Upon hearing "that old man from Kyoto," Nakamura Masaya's expression darkened.

Back in the Famicom era, Namco was one of the first six licensed manufacturers, but was later ruthlessly suppressed by Yamauchi Hiroshi, who restricted the number of cartridges released. He held onto this resentment for almost ten years.

"How do you want to cooperate?" Nakamura Masaya asked.

Ken Kutaragi stood up, walked to the whiteboard, picked up a pen, and began to draw.

"We need to develop a universal architecture. Sony will develop home consoles based on this architecture, Namco will develop the next-generation arcade board. This way, games on this board will be easier and smoother to port to Sony's home consoles, greatly reducing the cost and risk of porting, while also ensuring the quality of the games."

Ken Kutaragi drew a circle with arrows pointing to both sides.

"Think about it, President Nakamura. You develop a game, make a killing in the arcade, and then with only minor modifications, you can seamlessly port it to the PlayStation and sell it to home users. One investment in development costs, double the profits."

Moreover, Sony covers most of the hardware R&D costs; you only need to provide personnel and experience.

Nakamura Masaya stared at the sketch on the whiteboard, his fingers lightly tapping the table.

This is precisely Namco's current Achilles' heel.

Arcade game circuit boards are becoming increasingly expensive, and the research and development risks are also increasing.

If someone could share the hardware costs, it would also open up the home console market.

"That sounds wonderful." Nakamura Masaya didn't immediately agree, "But we need to assess the technical feasibility."

"Of course, I believe the Namco technical team that developed the System 21 Board will see the value of this solution."

Nakamura Masaya put down the paper, his gaze sharpening. "That's certainly interesting."

Nobuyuki Idei the opportune moment. "Furthermore, Sony has promised that Namco will enjoy the most generous royalty treatment on the PlayStation platform. We are not Nintendo; we won't impose any unfair terms. As long as the platform thrives, the lion's share of the profits can go to you."

This statement completely shattered Nakamura Masaya's defenses.

The enemy of my enemy is my friend.

Why wouldn't you do something so good—give Nintendo a piece of your mind and make money at the same time?

"Sony has money, Namco has technology." Nakamura Masaya stood up, walked to the window, and looked at the Tokyo Tower in the distance. "Since neither of you is afraid of losing money, what reason do I have to refuse? However—"

He turned around, his eyes piercing. "I need to see the real thing. A PowerPoint presentation isn't enough. Next month, bring over your detailed technical solution. I want my technical team to evaluate it themselves."

"No problem." Ken Kutaragi grinned confidently.

Nobuyuki Idei secretly breathed a sigh of relief.

With Namco's brand name, it's much easier to negotiate with other third-party manufacturers.

Two weeks passed quickly.

Ken Kutaragi brought more than just a few blueprints; he brought out Sony's decades-long expertise in semiconductors.

Namco's engineers initially approached the topic with some skepticism, wondering what these electronics guys knew about game console architecture. However, the more they looked, the more they broke out in a cold sweat, and eventually, they were completely convinced.

This architecture is too advanced.

If you spare no expense in using high-quality components, this machine's 3D computing power would easily surpass that of current arcade machines.

Of course, many directions and details still need to be adjusted, but given Sony's deep foundation, it is no longer a technical problem; what they lack is experience.

This is precisely where the value of Namco's involvement lies.

The atmosphere in the top-floor conference room of the Iron Plate Formation Building was much more harmonious than it had been two weeks ago.

Nakamura Masaya stared at the final draft of the agreement in his hand, his finger lingering for a long time on the line "Royalty fee discount of 30%".

This isn't just about money; it's about face, the privilege Sony granted to Namco.

After Nintendo for ten years, we're finally getting to be honored guests at Sony's place today.

Furthermore, it can enhance the attractiveness of this substrate to third-party manufacturers.

"We're developing a new generation of arcade board based on the PlayStation architecture, internally codenamed System11," Ken Kutaragi said, pointing to the terms and conditions, his tone brimming with pride. "This way, games developed by Namco for arcades can be ported to home consoles almost effortlessly. There are no porting barriers, and no reduction in graphics quality."

Nakamura Masaya closed the document, picked up his pen, and the nib fell heavily onto the paper.

"Make a deal."

With Norio Ohga and Nakamura Masaya shaking hands, an alliance based on Sony's new console was officially formed.

After finishing their business, Norio Ohga did not rush to leave.

He picked up his teacup and casually said, "President Nakamura, now that the hardware architecture is settled, I have another request."

"President Ohga, please speak."

"Regarding <DDR>," Norio Ohga Sega forward slightly, "The first generation machine was developed by Sega, and at that time we had to borrow their channels and hardware experience. But now that we're going to do it ourselves, and we have the more powerful System 11 board, I want to hand over the development of the second generation <DDR> to Namco."

Nakamura Masaya was somewhat surprised.

<DDR> is now a cash cow.

While people in the gaming industry might think of it as just a dance machine, on a business report, it's practically a money-printing machine.

"Sega's first generation had outdated lighting and low screen resolution, which wasn't conducive to promoting Sony Music's high-quality music." Norio Ohga shook his head, his tone revealing disdain. "We wanted more dazzling lighting, smoother motion detection, and 3D backgrounds that only System 11 could run."

Nobuyuki Idei chimed in at the opportune moment, "This is not just a game project. President Nakamura may not know, but within Sony, this is our first step in confronting the conservative board."

Sony is a large and powerful company, and the old men on the board of directors have always been quite critical of Sony's foray into the gaming industry, always finding various reasons to prevent Sony from entering the video game industry.

Although Chairman Akio Morita, who was no longer in charge, supported the project, he couldn't withstand the relentless attacks from the opposition at every financial report meeting.

At this point, the video game division would slam the revenue report for <DDR> onto the table.

The impressive revenue streams, coupled with the enormous music licensing fees paid to Sony Music every year, were like a resounding slap in the face, leaving the opposition speechless.

The combination of technological sophistication and substantial financial investment is what allows Sony's supporters of video games to continue investing so many resources in the new console project.

"You're entrusting such an important project to us?" Nakamura Masaya narrowed his eyes.

"Because we trust Namco's technology and game development expertise." Norio Ohga smiled, his eyes gleaming with businessman's shrewdness. "Besides, only if Namco does a good job with the arcade version can our future PiayStation version <DDR> sell even better, right?"

This is a reason that is impossible to refuse.

By taking on this order, Namco will not only earn a development fee, but also a share of arcade sales.

More importantly, this is Sony's way of offering its all—"I've even handed you my most profitable IP, you should at least show me some real talent, right?"

Nakamura Masaya laughed twice, "President Ohga, it seems we're not only allies, but also in the same boat. Namco will take this job."