"Dad! Look! Quick! It's Virtua Fighter 2! It's really 3D! And it's only $299!" Michael pointed at the TV screen, his finger nearly poking through the cathode ray tube.
Old Brown had been about to scold his son for making such a fuss, but when he saw the number at the bottom of the screen, the words died in his throat.
$299?
He instinctively patted the pocket where his year-end bonus had just landed.
He'd been worried. The kid next door had just bought a Super Nintendo, and if his son didn't get one, he'd be the laughingstock at school.
But the 3D0 console was just too expensive—his wife would have divorced him if he'd bought it.
Yet this Jupite... only $299?
"Alright, stop yelling," Old Brown said, pressing his son back onto the sofa before he could scream again. "Let's check Toys "R" Us this weekend. If it really is only $299, then consider this turkey a gift from Sega."
This scene played out simultaneously in millions of American homes.
The order lines at Walmart, Best Buy, and Toys "R" Us were swamped within half an hour of the GG broadcast.
Parents who had been hesitant about buying their children a game console made the decision without a second thought the moment they saw the number "299."
"299 dollars."
The flimsy fax sheet lay flat on the mahogany conference table, its number burning like a red-hot iron.
"At today's exchange rate, that's even less than 30,000 Japanese Yen," Ken Kutaragi said, his voice low and heavy like the air before a storm. "We wore down our tongues and even gambled our careers to get the board to approve a 39,800 Yen price. And Sega, on the other hand, just slashed the North American price by another 10,000 Yen."
Ryoji Nakabachi flipped through a thick stack of customs data analysis reports, his fingertips gliding across the pages. "We checked the shipping records. The batch of Jupite consoles sold in North America wasn't manufactured in Japan at all. The final assembly was done in Mexico."
"Maquiladora Industrial Zone," Nobuyuki Idei said, his voice familiar with the term. He removed his glasses and wiped them. "North American Free Trade Agreement. Zero tariffs, cheap labor."
"Mexico only handles the assembly costs; the real cost is in the components. We obtained these from North America by bribing warehouse managers," Ryoji Nakabachi said, pushing a teardown report across the table to Oga Norio. He pointed to several inconspicuous component numbers. "Look at the origin codes for the PCB, the molded parts, and the connectors."
Oga Norio narrowed his eyes and recognized the familiar name: "China?"
"The volume is staggering," Nakabachi confirmed with a nod. "While we were still haggling with domestic suppliers who even had to factor in union dues, Sega had already extended its reach into the Pearl River Delta. Canon and Epson were only tentatively setting up factories there, and most Japanese companies in the region were focused on electromechanical manufacturing. Sega, however, has staked the majority of its supply chain on that region. The procurement cost for those electronic components is probably only 60% of ours."
An awkward silence fell over the conference room.
To the Japanese manufacturing industry at the time, that vast neighbor was still synonymous with cheap textiles and toys. Who could have imagined that Takuya Nakayama would dare entrust the lifeline of a precision instrument like a 32-bit console to them?
"In other words, we're fighting a war with costs priced in Japanese Yen, while he's settling in US dollars, even using China's cost structure, to go toe-to-toe with us. I remember Mainland Chinese companies have export tax rebates, right?" Nobuyuki Idei let out a dry laugh, his voice tinged with resigned clarity. "No wonder he dared to do a global simultaneous launch. He's not afraid of inventory piling up because his inventory costs are terrifyingly low."
Ken Kutaragi gritted his teeth, his cheeks puffing out.
He desperately wanted to argue that products made in such places must be of poor quality, but Sasaki's teardown report lay before them—Jupiter's construction was flawless, with not a single flaw to be found.
"We can't just sit here lamenting how clever our opponent's calculations are," Oga Norio said, rising to his feet and pacing the smoke-filled room. "We have a factory in Mexico too, don't we?"
"Yes, but it's mainly for Trinitron TVs," Ryoji Nakabachi replied cautiously. "Converting it to a precision electronics assembly line would take time. If the PlayStation launch in Japan goes smoothly, the Tijuana production line could be operational by next summer at the earliest."
"Then prepare the team," Oga Norio said, turning to face the group. "As for the upstream supply chain—if Canon and Sega dared to venture into it, there's no reason Sony should be intimidated."
"Yes, sir! I'll arrange for an investigative team," Ryoji Nakabachi said, closing the folder with a practical tone. "We'll keep it low-key, under the guise of a business trip. If we can reduce Sony's production costs while maintaining quality, it will ease the pressure on both Sony as a whole and Sony Computer Entertainment."
Meanwhile, after finalizing the release arrangements for Sega, Takuya Nakayama received the bi-weekly report from Frank, CEO of Silicon Valley Online.
The old man had learned his lesson. Knowing Takuya disliked long, rambling texts, Frank put a pie chart on the first page.
The red section represented the market share of Netscape Browser, MosaicNetscape 0.9—18%.
In just two weeks.
This figure seemed like a fantasy in the traditional software industry, but in the Wild West of the Internet, it was the speed of savage growth.
Netscape's spinning "N" logo was spreading across global computer screens like a virus.
Takuya Nakayama turned to the second page, which was densely packed with operational data for Webdir, the website directory.
In the notes section, Frank had written in bold: "Takuya, we need to hire more moderators! The Internet is going crazy right now—dozens of new websites pop up every day, with all sorts of bizarre content."
Looking at these complaints, Takuya actually smiled.
There were sites selling pizza, discussing UFOs, displaying photos of people's cats, and many personal homepages with "Under Construction" icons.
Takuya spent some time sifting through the chaotic list of new sites with keen interest.
He was searching for familiar names.
Amazon? Not yet.
Yahoo? Silicon Valley Online had snatched their web directory business—who knew what they were up to now?
eBay? Pierre Omidyar probably hadn't even thought of how to help his girlfriend sell candy boxes yet.
The list was full of cannon fodder destined to die in the bubble, but Takuya wasn't disappointed at all.
On the contrary, this chaos and disorder were precisely what proved the ecosystem's vitality.
Only through the tumultuous mix of mud and sand could gold be sifted out.
This was the Internet of 1994—chaotic, crude, but a vibrant spectacle of life bursting forth in every direction.
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