Hideki Sato suddenly realized something.
During the cartridge era, a game selling for 10,000 yen might have had production costs of 3,000 to 4,000 yen, plus the risk of massive inventory. Now, with games selling for a similar price, the physical cost of optical discs was far lower.
"And haven't you noticed?" Takuya Nakayama tossed the disc back onto the table, its clatter sharp and clear. "Because of the lower cost, we've increased the retailer rebate by five percentage points. Now those managers push Sega games harder than they push their own daughters. As for the players' hesitation? That's not a bad thing. It shows they know that as long as they save up, Sega games will always be waiting for them on the shelves."
This was, in essence, exchanging cheap plastic discs for the hard-earned cash in players' pockets.
After discussing the performance of the second batch of launch titles, Hideki Sato spread the final first-week sales report across the table.
"Managing Director, the first-week figures are all here."
Takuya Nakayama crushed his cigarette and scanned the rows of bold, black numbers.
Jupiter Console Global First-Week Sales: 1.396 million units.
Below that were the sales figures for the four launch titles.
The King of Fighters II: 330,000 units. Gundam Battle Operation: 240,000 units. These two arcade ports, catering to hardcore fans, performed as expected and met expectations.
But what truly made their scalps tingle were the other two lines:
Sonic 3D: 1.24 million units.
Paper Pokémon Adventure: 1.28 million units.
Terrifying sales numbers.
This meant that nearly every Jupiter buyer had taken home at least one copy of Sonic 3D and Paper Pokémon Adventure. This wasn't just "launch support" anymore; it was strapping the console to a rocket and blasting it into the sky.
"What's even more interesting is this," Sato said, turning the page and pointing to the financial accounting section on the back. He kept his voice low, but couldn't hide his excitement. "The optical disc costs you mentioned earlier—they've made the profit margin on this media even more staggering than we'd anticipated."
During the Mega Drive era, the cost of a cartridge—a large-capacity ROM chip plus a circuit board—accounted for one-third or more of the selling price.
If a game didn't sell well, warehouses would be piled high with expensive electronic waste.
But now?
The Jupiter's optical discs were made of cheap industrial plastic.
"The cost of pressing a disc is less than 200 yen, and even with packaging and manuals, it's still only a few hundred yen," Takuya Nakayama said, a smug smile spreading across his face as he looked at the astonishing profit margin data. "Selling the 39,800 yen console to gamers is just a way of putting a money-printing machine in every household."
Although the Jupiter console itself was initially sold at a loss due to the excessive hardware costs, the pure profit from just one week's sales of the two million-selling first-party blockbusters was enough to cover the hardware losses and even generate a substantial surplus.
This was a business miracle the cartridge era could never have dreamed of.
"Sato," Takuya Nakayama said, closing the folder and tapping his fingers on the cover, "it would be too selfish for Sega to keep such good news to ourselves."
Sato paused, then understood: "You mean—"
"Send this profit comparison analysis of optical discs versus cartridges to all our partners to bolster their confidence. And, you know, accidentally leak it to those third-parties still on the fence." Takuya Nakayama stood up and walked to the window, gazing down at the Tokyo streetscape. "Especially those stubborn old-timers still clinging to their Super Famicom and Mega Drive, determined to clear out their remaining 16-bit game inventory first."
"Let them see the truth: are they going to keep penny-pinching over expensive chips in the mire of the old era, or come to the new world and pick up money with us?"
That afternoon, several financial analysis reports, labeled "Reference Material," began circulating through unofficial channels to the desks of third-party executives.
A businessman's nose is always the most sensitive.
Staring at the stark cost disparities in the reports, third-party manufacturers who had planned to drag their feet for another year on 16-bit consoles found their resolve completely shaken.
On one hand, there were expensive, long-production-cycle, high-risk cartridges. Each inventory order was a massive gamble; overstocking tied up vast amounts of working capital, while understocking meant watching players' cash slip through their fingers.
On the other hand were the optical discs—cheap, produced in massive quantities, and boasting staggeringly high profit margins. Even if they produced a surplus during the initial launch and struggled to sell them, the capital tied up was far less than with cartridges. In fact, they could afford to overproduce each time, gambling on an early launch explosion.
Anyone with basic arithmetic skills could see the obvious choice.
Talk of "polishing their games" and "squeezing every last drop out of the 16-bit hardware" was utter nonsense in the face of such overwhelming profits.
Within twenty-four hours, Sega's Developer Support Department was swamped with calls.
Third-party developers who had days earlier pleaded "staff shortages" and "no current Next-Gen Project plans" now spoke with humble tones, their core demand singular:
Development kits.
We need Jupiter development kits.
Even at inflated prices, even if we have to wait in line, we need those entry tickets as soon as possible.
Anyone who hesitates is turning their back on money.
Aoyama 1-chome, Sony Computer Entertainment (SCE) Headquarters.
The air in the conference room hung thick and stagnant, like a stagnant pool. Only the blue light from the television screen flickered across Ken Kutaragi's grim face.
The screen displayed gameplay footage from a running Jupiter title.
"What a waste."
Ken Kutaragi slammed the Jupiter controller onto the table with a sharp crack.
"Takuya Nakayama is a madman who doesn't understand business principles," he said, his voice hoarse from lack of sleep as he pointed at the screen. "Last week, he released Sonic 3D and Paper Pokémon Adventure. This week, he's dropping Phantasy Star III and Demon Samurai. Any one of these four games would have kept other manufacturers fed for half a year. Cramming them all into two weeks is a suicidal attack on our own software—it's like the left hand attacking the right. No wonder sales are being cannibalized."
Nobuyuki Idei sat at the other end of the conference table, his fingers gripping the sales report that made his stomach churn. His expression was far calmer than Kutaragi's, or rather, it was the numb resignation of someone who had already seen the ending.
"He doesn't care about cannibalization," Idei said, turning the page of the report. "He wants to completely vacuum the PlayStation's initial market share. It's called saturation bombing—he'd rather his own games steal each other's thunder than leave a single Yukichi Fukuzawa in a player's pocket on your release date."
The executives around the table fell silent.
This suffocating pressure, in their dazed minds, brought back memories of that time a few years ago.
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