The profitability of arcade games has been a headache for countless manufacturers since ancient times.
From the early buyout system to the "50/50 revenue sharing system" that Namco began to gradually propose in the 1980s, the transformation of the arcade business model has never stopped.
After gradually engaging with veteran arcade game companies Namco and Sega, Gamenova finally began to establish its own arcade system.
This is what is known as a profit-sharing system.
Simply put, Gamenova provides arcade cabinets at low prices or even for free.
The arcade, on the other hand, needs to share revenue with Gamenova according to a certain ratio based on the coin-operated flow.
Essentially, this is an incentive mechanism.
This shifts some of the risk that should have been borne entirely by the store to the manufacturer.
This is not only a good opportunity for manufacturers to make a steady and substantial profit, but also a good thing for arcades.
This way, if you want to buy a new machine, you no longer need to prepare tens of thousands of dollars in cash in advance as before.
At the same time, the revenue-sharing mechanism can also incentivize game developers to improve game quality in order to attract a sufficient number of players.
It has to be said, this is absolutely a brilliant move. You could say that without this win-win situation... if you consider that players also get a better gaming experience, it's a win-win-win situation.
Well, as for the increased price per play due to revenue sharing... that's a separate issue altogether.
In short, without this win-win-win mechanism to maintain the arcade market, the decline of arcades might come much faster than in history.
It is precisely because of this mechanism that major arcade machine manufacturers have been able to survive until after the millennium and still have their own little piece of land.
The classic example is the coin-operated revenue-sharing scheme adopted by a certain "King of Remastered Dishes" in late 2013.
The game " Ultra Street Fighter IV ", which was released in 2014, still uses this scheme and collects a 30% cut of the revenue.
According to the data at the time, Capcom would receive 30 yen for every 100 yen sold.
Revenue sharing will always be a core rule in the arcade market.
As for its core mechanism... it's actually a very, very simple thing.
It could even be said to have absolutely nothing to do with semiconductors.
novaarcade, formerly known as Atari Games, has gradually been integrated into the Atari Games workflow after a period of transition.
The new headquarters, like Gamenova's headquarters, is located in the San Francisco Bay Area of California, which can be considered part of Silicon Valley.
The building was already built, so Lin Lixin simply asked an acquaintance to introduce him to a local real estate developer.
It is said that this is Lin Lixin's new business, and the other side found more than ten locations that meet his requirements in just one day.
This is an office building that includes a small attached factory building.
The scale isn't too large, but it's more than enough for novaarcade, a company that doesn't have many core personnel to begin with.
The actual production work is handled entirely by contract manufacturers in various locations; there is no need to actually ship from their own factories.
Strictly speaking, the only work that needs to be done here is design, development, iteration, and testing.
Of course, there's one more crucial element—fieldwork.
Lin Lixin strode confidently into the main building and stopped in front of a young man with some Mexico features.
The young man was leaning over the front desk with his big butt sticking out, chatting away with the young woman in charge of reception.
"Slap!" Lin Lixin didn't hold back and pulled his hand out, giving him a solid slap.
"Hey Gary, how's it going?"
This is Gary, a decent guy he stumbled upon from the mess left by Namco.
Putting everything else aside, at least they know how to handle things, and their panel attributes are decent.
While not quite a top-tier SSR, he's more than qualified to be the head of the arcade department.
"Boss! Why weren't you notified beforehand? I didn't have time to prepare."
Upon hearing the voice behind him, Gary immediately stood up straight and turned around.
" Jessica, go make coffee for the boss, using the imported beans from my office."
After quickly arranging things, Gary began his formal performance review.
"Distributors on the West Coast have all opted for Option 2, and negotiations are actively underway in Denver. We are also in talks with East Coast cities such as New York and Boston."
Gary gestured towards the office and led Lin Lixin into it from beside him.
While continuing to explain the recent situation, he pulled out a large bunch of keys and started opening the filing cabinet. "Mr. Michael's reputation is truly outrageous... Oh, of course, you deserve a lot of credit for that, boss."
He quickly flipped through the reports, then his eyes lit up, and he pulled one out.
"Boss, this is this week's sales report. Based on the preliminary data collected from distributors across various regions, the sales volume for the first week is currently..."
"Slap"
He slammed the file onto the table, his tone tinged with excitement.
"130,000 units! Considering data latency and statistical errors, I boldly predict that it has definitely exceeded 140,000 units!"
140,000!
Don't be fooled by the fact that this number is a fraction of Gamenova's previous game sales, and it's even less than the sales of SimCity, which had the lowest first-week sales.
but...
This isn't some cheap console game that costs tens of dollars!
In an entire region, perhaps only a few dozen units will be needed.
Even if each arcade bought fifty units, the total sales for the entire city wouldn't be that many. Yet, in just one week, Michael Jack's Moonwalk has already sold a whopping 130,000 units.
If you don't have a good grasp of this number...
To make a simple comparison, Pac-Man, the perennial best-selling arcade game, had only sold 400,000 units worldwide by 1990.
Michael Jack's Moonwalk achieved nearly a third of that milestone in just one week.
Street Fighter II only sold 200,000 units in history, while Mortal Kombat and Virtua Fighter sold only tens of thousands of units each.
Based on this data, it's likely that at least one or two arcade machines exist in arcades across the country.
"Production capacity can't keep up, boss. Half of these 140,000 units are still waiting in line for production."
This is definitely a sweet trouble.
Looking at the world, there are probably very few arcade machine manufacturers that would have to deal with order backlogs due to insufficient production capacity.
"The buyers included not only arcade owners, but also owners of convenience stores, newspaper shops, and other retail outlets across the country, as well as some wealthy and enthusiastic fans."
"Whoa..."
Even Lin Lixin himself didn't expect the first-week results to be so phenomenal. To put it simply, this sales figure is roughly equivalent to a console game selling around five million copies in its first week.
"There's nothing we can do about production capacity; all the contract manufacturers are operating at full capacity. We'll just have to put them in this queue for now."
Lin Lixin shook his head helplessly.
"I'm here to check out the lead seal module. I just came up with a feasible modification plan while chatting with the president of Sega earlier."
The so-called lead seal is the core module of the arcade revenue sharing system.
How can we ensure that arcade owners in various locations don't cheat or engage in shady practices? How can we ensure they don't conceal information?
To solve this problem, we need to bring out two things that actually have nothing to do with semiconductors.
"Yes! I just picked up a sample set today and it's here."
That's what he said, but in reality, Gary made ample preparations every day for any possible surprise inspections.
He took a coin-operated machine off the shelf and placed it on the table.
Lin Lixin picked it up and turned it over to look at the back.
A mechanical counter is installed here, recording the total number of coins inserted each time. To accurately calculate the machine's revenue, you only need to check this number.
Otherwise, they couldn't possibly have the specialist count each coin one by one.
In addition to this, there is also a security design.
When actually installed on arcade machines, a thin metal wire is threaded through the counter of each machine and a special lead seal is added.
To tamper with the machine itself, this lead seal must first be broken.
These special, one-time-use lead seals are almost impossible to conceal. Inspectors only need a quick glance to determine whether the store manager has tampered with the seals.
Of course, it cannot completely prevent fraud.
Its true purpose, like most encryption technologies, is to make the cost of cracking it greater than the benefits of cracking it.
"That's interesting."
This was truly the first time Lin Lixin had disassembled and analyzed the internal structure of this thing in such detail.
"It is indeed very exquisite, but... it is not elegant enough."
Gamenova is, after all, a high-tech enterprise, and such outdated anti-theft measures are truly beneath its dignity. Lin Lixin's special trip here today is naturally intended to resolve this issue in one fell swoop.
After all, there are still many arcade projects to be done.
"When I was developing ' Michael Jack's Moonwalk,' I tried to come up with such a system."
Lin Lixin took the paper and pen that Gary had delivered and started sketching on them.
Instead of using these old-fashioned lead seals, we've upgraded to... electronic lead seals.
"Electronic... lead seal?"
Gary blinked, then adopted a curious expression full of thirst for knowledge.
"Yes, its principle is actually based on this thing."
Lin Lixin reached into his pocket and casually pulled out a GameNova All-in-One Card, pure black with gold foil stamping—a typical internal membership card.
"This thing contains a complete microprocessor, an asymmetric encryption coprocessor, and tamper-proof microswitches."
"If there is malicious external damage, it will erase its own data and complete its self-destruction."
Essentially, this thing is a typical electronic seal. It's disposable, irreversible, and difficult to tamper with.
It's not impossible to crack it, but it would require disassembly using high-precision equipment in a clean laboratory environment, under ultra-low temperature conditions at liquid nitrogen levels.
"We moved the counting from hardware to software; the arcade game itself has a built-in program for recording the frame state."