What did $699.99 mean in 1990?
To put it simply, based on current market prices, Nintendo's flagship console Super Nintendo, is only $199.
A high-end home PC with an i486 processor as standard costs around $1,500.
The PlayStation, released a few years later, was only priced at $299.
The price of a 3do is enough to buy half a computer.
If you convert the exchange rate and look at it in the 2020s, it would even be more expensive than Valve's Steammachine.
" Trip is really finished this time."
Lin Lixin shook his head, having already sentenced the machine to death in his heart.
If Trip's appearance does prompt a change in strategy and a desperate attempt to steer 3DO towards a truly high-end market, then 3DO might actually have a chance to fight back.
But unfortunately...
From its inception, the 3do project stepped on one of the biggest landmines in the gaming industry.
"This price... isn't it already close to cost? Actually, considering its configuration, the price isn't too outrageous." Vivian estimated the price in her mind.
Including labor, losses, warehousing and transportation expenses, the price per unit is roughly this.
" Trip's biggest strategic mistake was that he relinquished control of the platform and handed everything over Panasonic manufacturers like Panasonic."
Lin Lixin shook his head.
" Panasonic isn't Nintendo; they need to make money, they need to profit from every single 3DO."
What are the costs associated with building a 3DO system?
Besides the necessary hardware and miscellaneous items, processor licensing fees, CD-ROM costs, and channel profits are all unavoidable expenses.
Panasonic simply doesn't have much profit margin to squeeze out.
The price of $699 was to ensure that Panasonic could profit from the process, rather than simply engaging in charity.
"That's where the problem lies."
After saying that, Lin Lixin got up and went to the bathroom, where he took out his razor.
"The business model of game consoles is a typical 'razor-razor-blade model,' where manufacturers often sell a good-looking and functional razor handle at a very low price, but the disposable blades are very expensive." This model was first proposed by Gillette.
It proved to be very useful.
Vivian immediately understood what Lin Lixin meant.
After all, the hardware all passed through my hands, so I have some understanding of the approximate prices.
"Our game consoles... are they a classic 'knife rack'? Every time Gamenova sells one, it incurs a huge loss."
"Yes, although cost control has improved a lot after we achieved complete self-sufficiency in TFT-LCD and memory, our main unit business is still losing money, and it's a huge loss."
Lin Lixin nodded.
This is no secret.
Leaving aside the complete game consoles, even the newly released Novara Deon 9000 graphics card is losing money in the consumer retail market.
Without major players like General Motors, the entire graphics card business would be like the email industry—a frantic money-burning scheme to buy market share.
So... how do they make money?
The answer is, of course, games. Games are to game consoles what razor blades are to knife holders.
How much does a game disc typically cost to produce?
Depending on the disc specifications, packaging grade, and included bonus items, the overall actual cost can be reduced to as low as a few dollars.
It won't exceed $10 to $20.
And what about the price?
It can easily sell for $50, and plenty of people are willing to pay for it.
Excluding development costs, selling video games is indeed no different from printing money.
In this model, losing money on hardware is really not a big deal.
Taking NP as an example, the global shipment volume of NP has now exceeded 100 million units.
Even excluding those who suffer losses and collectors who buy multiple limited editions, the actual number of players is still in the tens of millions.
As long as you make a decent NPC game, you can easily achieve sales of millions of copies.
If it's a first-party game from Gamenova, then it's a stable ten million copies. Considering the profit margin per cartridge, it's not hard to arrive at a staggering figure.
Hundreds of millions of dollars!
This isn't just Gamenova earning money; everyone who follows Gamenova and is part of the Gamenova camp, as long as their quality is acceptable, can receive this amount.
One hundred million US dollars in 1990!
This explains why Bullfrog Studio has been partying non-stop ever since they joined.
One hundred million is enough to transform an unknown small company into a world-class super game company.
" Trip's choice to sell standard products like IBM-compatible machines and MIPS processors means it can't sell hardware at a loss like we do."
From the very first step, Trip went down the wrong path.
However, there was actually an even more important reason that truly caused 3do to fall into the abyss.
Lin Lixin's gaze returned to the television.
The presentation session has ended.
At that moment, Trip was surrounded by reporters, answering their questions. The enthusiastic atmosphere truly had the feel of the eve of takeoff.
" Vivian, did you notice anything strange about this press conference?"
"Uh... that's too much..."
After receiving One on One coaching from Lin Lixin, Vivian looked back at the entire press conference and immediately realized that it was riddled with mistakes.
It even evoked a strange sense of pity.
"The biggest one."
"Hmm... it's probably... a game?"
"That's right."
Lin Lixin chuckled.
This is the biggest problem with 3Do.
"Do you remember when President Hayao Nakayama went all the way to North America and ordered a batch of memory chips from Micron?"
"Of course I remember." Vivian nodded.
During that period, Micron had just emerged from its slump thanks to the new architecture of SDRAM high-speed memory, and had finally managed to stage a remarkable comeback.
Sega's memory chip orders greatly helped Micron's recovery process.
"I asked Sam a question that day."
Lin Lixin recalled that period of time.
Sega almost got itself killed by its own actions. A bunch of key IPs ran into problems, Genesis' North America expansion was thwarted, and Gamenova beat them to the punch in the arcade market.
EA was badly beaten by itself, and Sega lost an important third party.
During that period, Sega was really struggling.
Sam worried that high-speed memory chips would allow Sega to regain its footing and become a major threat to Gamenova.
I asked him, "If I gave you a 32-bit Atari with 16GB of memory and a resolution supporting 4096x2160, would you buy it?"
In today's context, this example would become a 3-do approach.
A super-next-generation console with 64GB RAM + 32GB storage, 4MB of RAM, and a resolution supporting 640x480, running Real-3do. "..."
Vivian nodded silently.
The answer is already clear.
She also learned what Lin Lixin meant by "the biggest problem with this press conference."
What about the game?
" Trip... didn't say a word about the game, he didn't even know what the launch titles were."
"Exactly."
Lin Lixin snapped his fingers, picked up his coffee cup, and drank it all in one gulp.
The answer to this question will not change from what it was back then.
Of course not!
I didn't buy this game console just to display it!
A game console without games? Are you kidding me? "However, EA's appearance this time did give me a wake-up call."
Lin Lixin stood up.
He suddenly had an idea about what to do with the game that was riding the wave of the Gulf War next year.
Let this most cherished work of EA be the final tribute to EA.
The Internet Café Plan is progressing rapidly right now, and local area network (LAN) online gaming is booming.
This opportunity can also further fuel the development of the Internet.
At the same time, it would be the most suitable work for the Gulf War at this critical juncture.
Thinking of this, Lin Lixin picked up his mobile phone again and dialed Sam's number once more.
"What now? If it was a 3D, I just saw it."
Sam's slightly tired voice came from the other end of the line.
"Oh? You even know that."
"Nonsense, but seriously, if you ask me, we might not actually need to care about EA at all." Sam seemed to be busy with network issues; the group was making a ruckus.
"This thing doesn't even have a starting lineup. I reckon it'll take the developers a while to get used to the Madam architecture, and... $700! Dude, I think Panasonic's gone crazy for money!"
Upon hearing this, Lin Lixin and Vivian exchanged a smile.
He held the receiver slightly away, adopting a proud posture, and whispered to Vivian:
"See? Our Sam's pretty clever in this area."
Ignoring the glare Vivian gave him, Lin Lixin continued into the receiver:
"You're right, I was just worrying unnecessarily. But actually, I was planning to ask you to do something else for me."
Who to look for?
Ted Turner.
There was a moment of silence on the other end of the phone.
"... cnn?"
"Yes." "I'll arrange it immediately."
Even today, United States television stations still have a hierarchical structure.
The three major television networks, CNN, PBS, local television stations, Fox...
If you didn't know better, you'd think it was some kind of faction structure from One Piece.
He's one of the three admirals and one of the Seven Warlords of the Sea.
In short, there are actually three tiers.
The first tier naturally consists of the three major broadcasting and television networks, these established companies.
ABC (United States Broadcasting Company), founded in 1942; CBS (Columbia Broadcasting System), founded in 1927; and NBC (United States National Broadcasting Company), founded in 1926.
Thanks to their long history and strong foundation, the three major broadcasting networks have absolute dominance in news programming and viewership ratings.
Don't be fooled by the fact that Gamenova's own TV station is doing so well.
In reality, if we strictly compare viewership ratings, it's just a fraction of theirs. After all, the main audience of television stations is inherently somewhat disconnected from video games.
Gamenova carved out its own niche entirely out of thin air, attracting a large following of young fans.
Despite the various broadcasting companies flirting with Gamenova all the time, Paramount and Warner. even have an ambiguous and unclear cooperative relationship with Gamenova.
But in the television industry, everyone is a fierce, relentless competitor.
If given the chance to eliminate Gamenova and absorb their television station into their own programming, the three major companies would probably do so without hesitation.
As for CNN, which can only be ranked in the third tier, there are many different opinions.