Recaps

Nakayama Takuya proposed reforms to improve animation workers’ pay and prepare Sunrise for digital production through collaboration with Sega. Yamaura Eiji considered the changes as Nakayama laid out plans to connect Sunrise with small studios, train young talent, and exchange expertise with Sega.

• Nakayama Takuya questioned Yamaura Eiji about the animation industry’s booming market and low pay for artists, and Yamaura explained how subcontracting layers cut into production funds.
• Nakayama Takuya proposed limiting Sunrise’s outsourcing to one layer and using Sega funding to bring capable small studios on as direct subcontractors.
• Nakayama Takuya urged Sunrise to train young artists and technical staff for digital production, including computer-assisted backgrounds and mechanical animation.
• Nakayama Takuya proposed a Sega-Sunrise exchange in which animators would teach game artists about movement while Sega staff taught Sunrise employees 3D modeling and digital effects.

Nakayama Takuya explained to Yamaura Eiji how Sega and Sunrise could share digital assets, train staff, and promote cross-field creators, then revealed Sega planned to acquire Sotsu. Yamaura grasped how the deal could give Sega control of a complete anime, licensing, and games industry chain, and promised to keep the plan secret and support Sega.

• Nakayama Takuya proposed combining Sega’s digitization expertise with Sunrise’s visual production and reusing digital assets across anime and games.
• Nakayama Takuya identified Hajime Katoki, Yutaka Izubuchi, Mika Akitaka, Junya Ishigaki, and Kenki Fujioka as cross-field talent who could lead projects.
• Nakayama Takuya urged Sunrise to learn 3D integration and described Sega’s plans to unify digital assets and imagery across its IPs.
• Nakayama Takuya told Yamaura Eiji that Sega’s board had approved plans to acquire Sotsu.
• Yamaura Eiji realized the acquisition could give Sega control over Sunrise’s production and licensing chain, then promised confidentiality and cooperation.

Nakayama Takuya learned that AOL was suppressing Silicon Valley Online in its search and recommendations while preparing to switch to unlimited monthly pricing to stem user losses. The chapter left AOL restructuring its finances and business lines ahead of the December 1 pricing change.

• Frank and Tom told Nakayama Takuya that AOL had quietly downgraded Silicon Valley Online in its search results, directory listings, and recommendations.
• Frank and Tom explained that AOL’s closed subscription model was losing users to free services such as go.com, prompting AOL to announce a $19.95 unlimited monthly plan starting December 1.
• Frank reported that AOL had written off $385 million in deferred user acquisition costs and reorganized into three business lines.
• Frank described AOL Networks’ capacity expansion, AOL Studios’ plans to package and sell content, and ConsumerNetwork’s focus on email, instant messaging, chat rooms, and buddy lists.

Nakayama Takuya recognized that AOL’s subscription model had turned its content network into a closed, fee-driven ecosystem and planned to unite the ISPs and PC manufacturers outside AOL’s reach. He proposed using Microsoft’s IE customization tools to direct users to Silicon Valley Online, leaving Frank and Tom to prepare negotiations and public messaging.

• Frank explained that AOL had replaced revenue-sharing with hosting and listing fees, angering content providers such as Slate.
• Nakayama Takuya noted that AOL controlled only about twenty to twenty-five percent of the ISP market and proposed uniting the providers outside its closed system.
• Nakayama Takuya told Frank to use Microsoft’s IEAK to make Silicon Valley Online the default homepage or a prominent favorite for partner ISPs and PC manufacturers in exchange for content and GG support.
• Frank asked whether Microsoft would intervene, and Nakayama Takuya argued that Silicon Valley Online posed no threat to Windows and that Microsoft would welcome help competing with Netscape.
• Tom described the plan as using Microsoft against AOL, while Frank suggested presenting the partnerships to the media as a defense of the open internet.

Nakayama Takuya and his colleagues planned to exploit AOL’s dependence on dial-up by promoting Silicon Valley Online and investing in AOL shares before broadband spread. They then turned to the escalating browser war and began assessing Internet Explorer 3.0’s challenge to Netscape.

• Nakayama Takuya told Frank to counter Steve Case’s tactics through partners and explained how cable modems and ADSL could eventually undermine AOL’s dial-up business.
• Nakayama Takuya directed Sega and Silicon Valley Online to buy AOL shares and later sell them at a suitable high point, using the profits to help fund server expansion.
• Nakayama Takuya asked Frank to target AOL users likely to leave by discreetly promoting Silicon Valley Online’s free services in offline communities and geek forums.
• Frank told Nakayama Takuya that the browser war had entered a bleeding stage, and Tom Kalinske noted that Netscape’s dominance was beginning to crack.
• Frank described Internet Explorer 3.0’s CSS support and JScript as Microsoft’s serious challenge to Netscape.

Nakayama Takuya and his colleagues assessed Microsoft’s growing advantage in the browser war and decided Silicon Valley Online would remain compatible with both browsers while exploiting the fight for traffic. The call ended with discussion of investors, the dot-com boom, and California traffic.

• Frank and Tom explained how Microsoft bundled IE with Windows and used ISP and OEM channels to undermine Netscape’s paid browser business.
• Nakayama Takuya heard that Netscape was struggling to replace browser revenue with enterprise server sales as its channels weakened and Wall Street’s confidence shifted.
• Frank said Silicon Valley Online would support both browsers and profit from the competition, while Tom reported that the Department of Justice was watching Microsoft’s bundling and AOL deal.
• Nakayama Takuya instructed his team to remain neutral, use Microsoft’s Internet Explorer Administration Kit against AOL’s closed ecosystem, and maintain technical cooperation with Netscape.
• Frank said Goldman Sachs was asking about Silicon Valley Online’s response to AOL’s subscription model, and Nakayama Takuya told him to send user growth reports while allowing the investment bubble to grow.
• Tom complained about a traffic jam caused by a broken truck on the San Mateo Bridge.

Nakayama Takuya reviewed Sega’s business and the fall game market with Hisao Oguchi, assessing Nintendo’s and Sony’s latest releases. He saw Nintendo’s cartridge limits hurting Wave Race 64 and recognized Sony’s growing strength through PoPoLoCrois Story and Crash Bandicoot.

• Nakayama Takuya ended a call with Frank and Tom after assigning them to coordinate an AOL stock plan and channel swaps in North America.
• Nakayama Takuya reviewed Sega’s reports, then examined the Global Game Market Fall Trends Briefing with Hisao Oguchi.
• Hisao Oguchi reported that Wave Race 64 had received measured feedback in North America and Japan, and Nakayama Takuya criticized its price, cartridge constraints, and replayability.
• Nakayama Takuya praised Sony’s decision to release the 2D RPG PoPoLoCrois Story, saying it complemented the PlayStation lineup and avoided competing directly in 3D.
• Hisao Oguchi reported strong reviews and player acceptance for Naughty Dog’s Crash Bandicoot, and Nakayama Takuya recognized it as the PlayStation’s new mascot.

Nakayama Takuya reviewed the autumn game market, including Red Alert’s strong launch and Final Fantasy VII’s delay until December, then turned his attention to Blizzard’s Diablo and Battle.net progress. The chapter left Hisao Oguchi preparing to report on Blizzard’s finishing work and testing data.

• Nakayama Takuya and Hisao Oguchi reviewed Electronic Arts’s annual sports games and Jupiter Bomberman’s surge in multitap and controller sales.
• Hisao Oguchi reported that Red Alert had dominated its launch period, and Nakayama Takuya warned that Blizzard needed to surpass it to compete in the RTS market.
• Nakayama Takuya read that Final Fantasy VII had been delayed from September to December and accepted the delay, anticipating its arrival on Jupiter with Sega’s support.
• Nakayama Takuya asked about Diablo’s finishing work and Battle.net testing, and Hisao Oguchi opened a folder of email summaries to answer.

Nakayama Takuya reviewed Battle.net’s successful beta and Tecmo’s promising Dead or Alive, then praised Sega’s strategy of supporting third-party developers. The story moved to a November board meeting, where Director Hoshino prepared to report.

• Hisao Oguchi told Nakayama Takuya that Battle.net’s closed beta met its load and security targets, with Silicon Valley Online engineers improving its network performance.
• Hisao Oguchi reported that Tecmo’s Dead or Alive was testing well and that its distinctive character effects could make it a strong arcade rival.
• Nakayama Takuya praised Tomonobu Itagaki’s design instincts, and Hisao Oguchi described plans to distribute Dead or Alive through Sega’s arcade channels and pursue a Jupiter console port.
• Nakayama Takuya told Hisao Oguchi to monitor year-end logistics and Jupiter production before dismissing him.
• At Sega’s November board meeting, Director Hoshino took a drink and cleared his throat as the directors turned their attention to him.

Director Hoshino briefed Sega's board on withdrawing its Southeast Asian investments and preparing a coordinated attack against vulnerable currencies and financial markets, with Thailand as the primary target. He warned that Sega had to wait for the right moment rather than expose itself to the Bank of Thailand too early.

• Director Hoshino reported that foreign capital flows into Southeast Asia had fallen sharply and ordered Sega to withdraw its investments during the fourth quarter.
• Director Hoshino named Thailand, Malaysia, Indonesia, and the Philippines as targets, then added South Korea because its financial system was vulnerable to panic and foreign borrowing.
• Director Hoshino outlined a strategy using offshore Thai Baht NDFs, borrowed Baht sales, Bangkok Stock Exchange index futures, and bets against local financial institutions.
• Director Hoshino said Sega might use Hang Seng Index Futures after October if the crisis spread to Hong Kong.
• Director Hoshino rejected entering the market immediately, explaining that high borrowing costs and a premature confrontation with the Bank of Thailand would put Sega at risk.

Nakayama Takuya pushed Sega’s plans to acquire Sotsu while preparing to profit from a Thailand currency crisis, then visited an Akihabara arcade to inspect the launch of Tecmo’s Dead or Alive. The game drew crowds with its flashy visuals, but Nakayama warned that it would need strong fighting mechanics to keep players coming back.

• Director Hoshino explained Sega’s low-risk plan to invest after Quantum Fund and other speculators weakened Thailand’s currency defenses.
• Nakayama Takuya directed Sega to accelerate its Sotsu acquisition and said the company would use its Southeast Asian profits to build an integrated copyright management system.
• Nakayama Takuya visited Sega First Hall on Dead or Alive’s launch day and saw its arcade cabinets packed with players.
• Hisao Oguchi reported high occupancy and said players were initially drawn by the graphics and promotional posters.
• Nakayama Takuya said Dead or Alive’s suggestive visuals would not be enough to compete unless its fighting mechanics could retain players.

Dead or Alive drew excited crowds with its counter system and explosive stages, while its first week of arcade results impressed Tecmo. Tomonobu Itagaki took pride in the game’s success and its appeal to both casual and veteran players.

• A high schooler playing Kasumi used a HOLD counter to throw Leifang into an explosive danger zone and win the match.
• Veteran arcade players explained Dead or Alive’s strike, throw, and counter mechanics and the extra damage from danger zones.
• Hisao Oguchi admired the game’s design as Nakayama Takuya noted its value to Sega’s arcade ecosystem and future Jupiter release.
• At Tecmo Tokyo Headquarters, the development director reported that Dead or Alive’s first-week coin-in rates were exceptionally high across Sega and franchise arcades.
• Tomonobu Itagaki praised the game’s physics feedback as players and veterans embraced its spectacle and studied its combat system.

Tomonobu Itagaki planned to turn the arcade version’s popularity into console sales by adding exclusive characters and emphasizing the game’s visual appeal. The meeting ended with the team tasked to develop the Jupiter port for a summer launch, despite concerns about workload and performance.

• Tomonobu Itagaki learned that the Jupiter port was over sixty percent converted and could maintain a stable sixty frames per second.
• Tomonobu Itagaki proposed adding Ayane and Bass as Jupiter-exclusive characters, with Ayane as Kasumi’s half-sister and Bass as Tina’s father.
• Tomonobu Itagaki ordered the team to hire additional developers and prioritize sales, including raising Ayane’s physics parameters and reducing background detail to protect performance.
• Tomonobu Itagaki explained that Bass would heighten the contrast when female characters defeated him, rather than balance the character roster.
• Tomonobu Itagaki assured the development lead that Sega would welcome the exclusive characters because stronger Jupiter sales would bring in more platform royalties.

David found Contra: Legacy of War nearly unplayable because its fixed camera, narrow view, and awkward 3D controls made enemies and bullets difficult to see and dodge. Meanwhile, Nakayama Takuya reviewed the game’s poor reception and argued that Konami had failed to adapt its 2D design to 3D.

• David bought the PlayStation version of Contra: Legacy of War and tried it at home.
• David struggled with the fixed camera and blind-spot attacks, then died after misjudging a jump and threw down his controller.
• David called Electronic Gaming Monthly’s chief editor and described the game’s flaws and the lack of enthusiasm from shoppers.
• The chief editor asked David to write a review before the end of the workday.
• Hisao Oguchi delivered Contra: Legacy of War’s sales report and negative North American reviews to Nakayama Takuya.
• Nakayama blamed Konami’s conservative, inconsistent attempt to carry 2D design into 3D and contrasted it with Sega’s successful support for Dead or Alive.

Nakayama Takuya dismissed the idea of exploiting Konami’s failure in publicity, while Contra: Legacy of War received disastrous sales and reviews. At Konami, Kozuki Kagemasa confronted the fallout and learned that Metal Gear 2 was nearing four million sales on Sega’s Jupiter platform.

• Nakayama Takuya told Hisao Oguchi that Sega should focus on making good games rather than publicly attacking Konami.
• Contra: Legacy of War’s sales collapsed after its first week, and David’s Electronic Gaming Monthly review called it an insincere industrial waste product.
• Kozuki Kagemasa reviewed the game’s high return rate and poor media scores as Nishida reported angry North American retailers.
• Kozuki Kagemasa blamed Konami’s outsourcing and lack of investment in 3D development, then dismissed Vandal Hearts’ sales of 480,000 copies as inadequate.
• Nishida told Kozuki Kagemasa that Metal Gear 2 had sold 3.9 million copies on Jupiter and was expected to pass four million the following week.

After regretting that Konami had let Hideo Kojima go, Kozuki Kagemasa ordered Konami to abandon most 2D projects and shift its resources toward 3D development. The chapter then moved to December in Tokyo, where posters for Cloud’s game and Mario’s kart racer faced off as the year-end competition approached.

• Kozuki Kagemasa lamented that Hideo Kojima’s success with Sega had cost Konami the profits from four million copies.
• Kozuki Kagemasa recognized that Nakayama Takuya was building Sega’s ecosystem by supporting developers such as Hideo Kojima and Tecmo.
• Kozuki Kagemasa ordered Konami to cancel most 2D spin-offs, focus on 3D, and recruit skilled developers without a budget limit.
• Kozuki Kagemasa said Konami would prioritize surviving the 32-bit era rather than worrying about Nintendo’s N64.
• In December, retailers in Akihabara displayed posters for Cloud’s game and Mario’s kart racer as arcade crowds flocked to Dead or Alive.

Players crowded into shops to try Nintendo's four-player Mario Kart 64 demo while saving for the December release battle with Final Fantasy VII. At Sega headquarters, Nakayama Takuya reviewed record preorder figures and remained confident that Square's game would take center stage.

• A Chiyoda video game shop manager required four players to try Nintendo's Mario Kart 64 demo, drawing crowds who could not afford the console or other games.
• Two boys in line argued about spending their money on Tecmo's blue-clad ninja and discussed saving for Final Fantasy VII.
• Nintendo distributed four-player demo cartridges to encourage shoppers to buy controllers and play Mario Kart 64 together.
• Hisao Oguchi reported to Nakayama Takuya that Final Fantasy VII's preorders had surpassed Sega's previous first-party records and that Square could not keep up with demand.
• Nakayama Takuya heard that Nintendo was emphasizing in-store demos rather than TV ads and stayed confident in Final Fantasy VII's quality and prospects.

Nakayama Takuya and Hisao Oguchi prepared for Final Fantasy VII’s launch, confident Sega’s logistics and the game’s scale would make it a major event. As dawn came to Akihabara, eager customers—including Kenta—waited in the cold while a store prepared to sell its stock straight from the cartons.

• Nakayama Takuya told Hisao Oguchi that the store should stack Final Fantasy VII cartons by the cash register instead of displaying the bulky cases on shelves.
• Four boys finished a trial of Mario Kart 64, joked about the last-place player, and left the store discussing how much they wanted to play together.
• The boys complained about the cost of the console and game, and one threatened to smash Square’s windows if the released graphics disappointed him.
• At six in the morning, the Akihabara store manager directed clerks to stack Final Fantasy VII stock by the counter and post a three-copy-per-person limit.
• The manager described Final Fantasy VII as a solitary epic that players would devote themselves to, while a long line of customers waited outside.
• Kenta stamped his feet in the cold as he waited in line for the launch.

Kenta bought Final Fantasy VII at launch and played it with Naoki, who was amazed by its elaborate packaging, seamless opening sequence, and smooth battles. The chapter left them fighting Shinra soldiers as Kenta unleashed Cloud’s attacks.

• Kenta bought the only launch copy he could afford and hurried home with Naoki.
• Kenta opened the heavy game case and showed Naoki its thick manual, four illustrated discs, and protective foam sheets.
• Kenta started Final Fantasy VII on the Sega Jupiter and watched the cinematic introduction to Midgar and Cloud’s arrival.
• Kenta controlled Cloud as the game shifted seamlessly from its opening sequence into gameplay.
• Kenta fought Shinra soldiers with Cloud, whose smooth attacks defeated two enemies at once.

Kenta, Naoki, and players across Japan became consumed by Square’s visually stunning new RPG, which sparked schoolyard debates and left its launch copies hard to find. The chapter ended by shifting to a darkened university dorm room in Los Angeles.

• Kenta and Naoki spent most of the weekend playing the game, marveling at its cinematic scenes and action.
• On Monday’s subway, the exhausted Kenta and Naoki compared how far they had progressed and praised the Shinra Building motorcycle sequence.
• At school, students argued over Tiffa and Alice, swapped game tips, and complained about the shortage of launch copies.
• Kenta refused to lend his copy to classmates, saying he had barely reached the second disc.
• The scene shifted across the Pacific to a cluttered, blackout-curtained dorm room at a California state university.

Players across the world were captivated by Final Fantasy VII’s cinematic battles and seamless 3D presentation, while Takashi found himself bored playing Mario Kart alone. The chapter left Takashi increasingly disengaged from the N64 as the new game’s popularity surged.

• David played Final Fantasy VII for Marcus and another roommate, impressing them with its battle visuals and seamless transitions.
• David said he had waited two hours to buy the game and refused to lend it to Marcus, who decided to search Los Angeles stores for a copy.
• Final Fantasy VII’s launch sparked excitement among players in Tokyo, Los Angeles, and London.
• Takashi played Mario Kart alone, grew bored after a red shell hit him, and missed the reactions he would have shared with classmates.

Takashi and Mike found themselves unable to gather friends for Mario Kart 64 because everyone was absorbed in Final Fantasy VII, while Famitsu's editors struggled to review the enormous game before their deadline. The chapter ended with Editor Takahashi questioning whether they could score it without finishing it.

• Takashi called Kenta to invite him to play Mario Kart 64, but Kenta refused because he and his friends were watching Final Fantasy VII.
• Takashi tore open his copy of Final Fantasy VII after realizing his friends would rather gather to watch it than play Mario Kart 64.
• Mike called Marcus to invite him over for Kart 64, but Marcus hung up to keep watching David play Final Fantasy VII.
• The narrator described Final Fantasy VII's dominance as it diverted players from Mario Kart 64 and other social gaming.
• Editor Takahashi told Editor-in-chief Sato that he could not finish the review because he had played for thirty hours without clearing the first disc.
• Sato urged Takahashi to meet the review deadline, but Takahashi objected that scoring the game before finishing it broke their rules.

Gaming magazines in Japan and North America published glowing first-phase reports on Final Fantasy VII before completing the long game, driving players to seek out the game and Sega Jupiter. The reports left the media caught between breaking their usual review rules and the pressure to share the game’s impact immediately.

• Sato told Takahashi to write a four-page Famitsu newsflash praising FF7’s technology and characters, while Yamada emphasized its expressive character animation.
• Tom gave Chris his first twelve hours of FF7 impressions and urged him to replace NetGeneration’s planned cover with the game.
• Chris tried a boss fight, was impressed by its visuals, and approved a cover change and an urgent layout.
• High school students in Akihabara read Famitsu’s FF7 report and resolved to buy the game despite its scarcity and inflated prices.
• A New York office worker read Tom’s report, bought NetGeneration, and asked for a Jupiter console buyer’s guide.
• Flash reports excited players who had missed FF7 at launch, prompting some to put away their N64 and Mario Kart 64 money and join the lines for FF7 and Jupiter.

Final Fantasy VII’s first-week sales far exceeded Mario Kart 64’s, prompting Sega to expand Jupiter production and Nintendo to accelerate its games and recruit more developers. On Christmas Eve, Marcus and David arrived at Mike’s garage gathering after neighborhood players finally left Midgar for the holidays.

• Hisao Oguchi reported that Final Fantasy VII sold just over three million copies in its first week, while Mario Kart 64 sold fewer than two hundred thousand.
• Nakayama Takuya decided to quietly leak the sales figures and focus on supplying Jupiter and increasing its production capacity.
• Shigeru Miyamoto told Yamauchi Hiroshi that Final Fantasy VII’s visuals and single-player immersion had drawn players away from Mario Kart 64.
• Yamauchi Hiroshi ordered more Christmas and New Year promotion, gave The Legend of Zelda: Ocarina of Time the highest development priority, and directed Nintendo to recruit second-party studios.
• On Christmas Eve, Marcus and David brought beer and pizza to Mike’s garage gathering after neighborhood players had spent ten days playing Final Fantasy VII.

Friends in the United States and Japan took breaks from Final Fantasy VII to play Mario Kart 64 together over the holidays. Christmas sales surged, leading Nintendo to emphasize multiplayer play while Sega remained focused on the success of Final Fantasy VII.

• Mike put away David’s Final Fantasy VII disc and started a Mario Kart 64 match with David and Marcus, who battled over the finish line.
• Takashi, Kenta, Naoki, and Takuya played Mario Kart 64 together on Christmas Day, and Takuya won the final race with a Super Star.
• Shigeru Miyamoto reported that Mario Kart 64 sold 450,000 copies during Christmas week, and Yamauchi Hiroshi ordered marketing to highlight families playing together.
• Nakayama Takuya dismissed Mario Kart 64’s holiday sales rise as a temporary boost and told Hisao Oguchi to have Square prepare reviews for peripheral products.