Layout in Mainland China

"I also inquired about that club," Tanaka said, closing his notebook with a strange expression. "The leader of that area is called ' Nine-Tattoo Dragon,' a strange guy. They say he's quite—traditional."

"Tradition?"

"Yeah. We don't do drugs, we don't force people into prostitution, and we don't engage in human trafficking. We usually make a living by collecting protection money and running brothels. Because of the many rules, we're always short of money compared to other gangs, and we live a very frugal life. This time, it's probably because a few of our underlings thought the pay wasn't enough and were doing shady work behind the boss's back."

Upon hearing this, Takuya's previously cold and hard expression softened slightly.

Anyone who can stick to these old-fashioned rules in that corrupt environment is either a fool or truly principled.

People with principles are usually good at talking.

"Since he's a man of principle, that makes things easier." Takuya stood up, walked to the map on his desk, and his gaze fell on the point on the Kowloon Peninsula. "When you send the lawyer over, be assertive, but don't make any definitive statements. Be courteous first, then firm."

"You mean----"

"Tell that Nine-Tattoo Dragon that Sega doesn't lack the money, but they do need an explanation." Takuya turned around, a playful smile on his face. "If he can handle this matter well, punish those traitors, and make up the payment—we might consider giving him a legitimate business opportunity."

Tanaka was a little confused. "Business? We do business with the gang?"

"Why not?" Takuya spread his hands. "Our warehouses and logistics over there need someone to watch them. Rather than having strangers watching us, we should find a local bigwig. Since he's short on money and follows the rules, let's give him a chance to make money without having to fight. That's a win-win situation."

Trading a legitimate security or transportation contract for the unwavering loyalty of a local power is a worthwhile deal no matter how you look at it.

Tanaka looked at the young executive director in front of him and secretly clicked his tongue in amazement.

Just a moment ago, he was thinking about how to use the United Kingdom to exert pressure, but now he's starting to figure out how to take over the local bullies.

This ability to manipulate events so easily is unlike that of a techie; he's more like a seasoned veteran than any of those old hands.

"A new idea?" Tanaka leaned over Takuya staring intently at the huge red area on the map.

Having followed this young master for so long, he was all too familiar with that look in his eyes—every time Takuya showed that thoughtful expression, Sega's financial statements would usually look exceptionally good in the following quarter.

Takuya withdrew his gaze, his fingers unconsciously tapping a rhythm on the table. "It's nothing earth-shattering, just a casual move, a small step towards the future."

"Layout?" Tanaka perked up immediately upon hearing those two words.

When Takuya last talked about "strategic planning," he was referring to the Eastern Europe market.

At that time, the Berlin Wall had just fallen, and the situation in Eastern Europe was in complete chaos. All manufacturers avoided the area, but Takuya defied all the objections and took all the unsold 8-bit MasterSystem machines that were piling up in warehouses in Japan and the United States.

And the result?

Those Eastern Europe gamers actually treated Sega's products, which had lost out to Nintendo's Famicom, as treasures.

Not only did they clear out the inventory that was giving the General Affairs Department a headache, they also managed to establish the Sega brand in Eastern Europe.

Ubisoft's later distribution of The Mega Drive (MD) was a huge success there, largely due to profiting from this "scavenging" trend.

Thinking of this, Tanaka tentatively asked, "Are you planning to replicate the Eastern Europe model? To move our obsolete production lines or inventory machines to Mainland China?"

He had barely finished speaking when he frowned, contradicting himself. "No, Executive Director, the situation in China is completely different from Eastern Europe. Eastern Europe doesn't have the technology to manufacture them, so they can only buy them. But China —their ability to imitate is terrifying. I heard there's this guy called 'Subor ' who disassembled Nintendo's Famicom perfectly, and he can sell them for a few thousand Japanese yen each. If we ship the machines over there, the pirated versions will probably be everywhere before the official versions even hit the market."

Tanaka is right.

In the eyes of Japan businessmen of that era, that land was a copyright black hole; any electronic product thrown in would be dismantled and copied without even a sound.

"Strong imitation capabilities indicate high market demand." Takuya pulled a pen from the pen holder and drew a circle on the map. "Besides, Tanaka, you only see the imitations, not the essence."

"Nature?"

"Eastern Europe was poor back then, but their information was connected to Western Europe. Kids could watch MTV and Hollywood movies on TV; they knew what was cool and what was popular. We just had to throw the machines at them, and they would naturally buy them." Takuya pointed his pen at the center of the circle. "But China is different. The media environment there is relatively closed; most kids don't even know what Sega is, or even who Mario and Sonic are."

Takuya paused, looked at Tanaka's confused face, and smiled, "Over there, simply selling hardware won't work. Even if your MD isn't counterfeited, parents will think it's 'electronic heroin'—a waste of time and energy. We're facing not only the attacks of pirates, but also the walls of societal values. Besides, our MD is still a luxury by their standards; working-class families can't afford it."

"Then—how should we set up this game?" Tanaka scratched his head, "Isn't this a dead end?"

Takuya picked up his coffee cup, but instead of drinking it, he looked at the vast continent on the map through the rising steam.

"It's better to guide than to block. Since that ' Nine-Tattoo Dragon ' has a channel to transport goods over there, let's give him a business opportunity."

Takuya put down his cup, his fingers tapping rhythmically on the table. "Let's try a different approach. We can give him some of our MDs, GamePockets, and games, and sell them to Nine-Tattoo Dragon as scrap at our factory price in Hong Kong. Then, through Nine-Tattoo Dragon's channels, they can be smuggled into Mainland China."

Tanaka was taken aback, his pen hovering in mid-air. "Executive Director, is this condoning smuggling? What if it gets caught—"

"Who said we smuggled? Those were scrap products lost due to mismanagement." Takuya leaned forward, lowered his voice, and his tone revealed a businessman's cunning. "Moreover, just providing the hardware isn't enough. We need to show that Nine-Tattoo Dragon a clear path so he can contact those underground electronics factories in Shenzhen or Dongguan."

7

"We need to secretly support them in their piracy."

"Cough cough cough!" Tanaka nearly spat out the mouthful of water he had just taken a sip of. He stared wide-eyed at his boss, wondering if he had misheard. "Support—piracy? We're Sega!"