Monthly subscription model.
David turned his head and exchanged a glance with Paul.
This was an extremely bold business experiment in 1996.
Mainstream PC games, including Blizzard's recently announced Battle.net, were all one-time purchases.
Players would spend forty or fifty dollars to buy the disc, and there would be no further costs to play afterward.
3DO was attempting to establish a recurring revenue model.
"As long as there are 10,000 stable paying users, that could generate $100,000 in cash flow every month," Paul quickly calculated on paper. "That's 1.2 million a year. After deducting server maintenance costs and bandwidth fees, the profit is still quite substantial. It's much more profitable than selling single-player discs."
"That's assuming players are willing to shell out money every month," David poured cold water on the idea. "And that's not even counting the hourly network connection fees charged by NTT or America Online. For players to play 'Meridian 59' for a month, the internet fees plus the subscription fees would equal the cost of a brand-new blockbuster game. How many people can afford such long-term financial pressure?"
Paul nodded in agreement.
Innovation in business models is often accompanied by extremely high market risks.
A monthly subscription model requires the game itself to have extremely strong stickiness, making players willing to continuously invest their money. Once the game can no longer attract players to log in, a wave of cancellations will directly destroy the project's cash flow. Low murmurs came from the Japanese reporters' side.
"NTT's phone bills will drive players crazy," one Japanese colleague complained in English to the American reporter next to him. "Playing this kind of game in Japan would result in a monthly internet bill exceeding 100,000 Yen. It's just not realistic." David overheard this conversation. Regional differences in infrastructure had become the biggest barrier to the globalization of online games. Broadband subscription services were being piloted in some North American cities, while Japan remained mired in per-minute billing.
This also explained why Japanese manufacturers preferred to stick to local area networks and single-player experiences, while North American manufacturers dared to make radical attempts on wide area networks. Hawkins was on stage giving the final summary. "Meridian 59 will be released simultaneously on the 3D0 platform and PC platform in the third quarter of this year. The gaming industry is undergoing a revolution; the network will connect isolated players into a real society. 3D0 is willing to be the pathfinder."
The press conference ended. The crowd began to disperse. It was evening in Los Angeles, and the sunlight streamed through the glass curtain walls, casting a glow onto the carpet of the convention center. David shoved his notebook into his bag. "It's a good game, the concept is well ahead of its time," Paul said, standing up and stretching. "It's a pity, though—the 3DO platform can't support such immense ambition. With an install base of just over a million, how many core gamers can you really convert into monthly subscribers?" "If they pushed it on PC, it might have a fighting chance," David said as they walked out.
"Today, both Blizzard and 3DO are telling stories about online gaming. Blizzard chose free Battle.net with a buy-to-play model, while 3DO opted for a subscription-based one. There's going to be a battle between these two models over the next few years." The Los Angeles sunset was stained orange-red by the haze over the city. The strategy of splitting the first E3 into a media day had worked, but for the exhibitors and journalists, the high-intensity information overload had drained their last ounce of energy. Figueroa Street outside the convention center was a gridlocked mess, with the taillights of taxis and shuttle buses forming a long, red chain.
Reporters from various gaming media outlets dragged their weary feet onto the shuttle, some even leaning against the windows to pull out their digital recorders and start organizing their drafts before they could even return to their hotels.
Exhibitors gathered in small groups in the smoking area outside the venue, exchanging intelligence they had gathered throughout the day.
The Sega of America chartered bus pulled up steadily in front of a high-end hotel in the city center.
Hisao Oguchi pushed open the door, and the cool evening air of Los Angeles helped him wake up a bit.
He didn't linger in the lobby, heading straight for the elevator and pressing the button for the executive floor.
The information from the exhibition that day had been immense.
Nintendo's $199 N64, the casual gaming concept thrown out by that young Sony executive named Kazuo Hirai, and the tug-of-war between Blizzard and Westwood on the PC front.
These pieces of information flashed through Hisao Oguchi's mind in rapid succession.
As the deputy to Sega's Executive Managing Director, he had to parse these fragmented pieces of information in the shortest time possible and distill the core insights that would be useful to Sega.
The elevator doors opened.
Hisao Oguchi strode toward the large suite at the end of the hall that had been temporarily converted into an intelligence briefing room.
Pushing open the ajar door, I found the suite's living room filled with swirling smoke, the sounds of keyboard tapping and hushed discussions intertwined.
More than a dozen Sega intelligence staff members were gathered around two joined conference tables, busily archiving video tapes recorded at various booths during the day, along with press releases and demo trial records.
Takuya Nakayama stood by the floor-to-ceiling window, holding a glass of ice water, quietly watching his busy subordinates.
He had just gotten off the plane this afternoon and, without even adjusting to the jet lag, had come straight to the hotel.
Compared to making appearances at the exhibition venue, he was more accustomed to overseeing the big picture from this behind-the-scenes command center.
Hisao Oguchi walked up, habitually bowing his head slightly in greeting.
"Managing Director, today's summary is almost finished. Nintendo is making big moves; the N64's pricing is being positioned directly against our Jupiter. And Sony—their press conference this afternoon completely avoided discussions on hardware performance, focusing instead on casual gaming. I've had the intelligence group prioritize organizing the hands-on feedback for Super Mario 64, and—"
Takuya Nakayama raised his hand, gently pressing it downward to interrupt Oguchi's rapid-fire report.
"Mr. Koguchi, let's pause for a moment." Takuya Nakayama turned around and set the iced water in his hand on the windowsill. "Everyone has been on edge since nine this morning; if the strings in their minds are pulled too tight, they'll snap. Let the intelligence group sort through what they have and let's eat first."
Hisao Oguchi was taken aback. He glanced at his watch—it was indeed well past mealtime. But by the conventions of Japanese corporate culture, during major exhibitions like this, working overtime and non-stop shifts were the norm, and meals were usually just something you grabbed while holding meetings.
"But Managing Director, the updates on Sony and Nintendo—"
"It can wait half an hour." Takuya Nakayama pulled over two chairs and gestured for Hisao Oguchi to sit. "Listen to me. In the future, the game development department, and even the entire software ecosystem, will be in your hands. We make video games, not cars or steel. The thing that people who work in tech and creative fields fear most is bureaucracy."
Takuya Nakayama looked at the young faces not far away, eyes fixed on their screens as they typed, and lowered his voice.
"Don't make them repeat the same thing too many times, and don't use high pressure to force them to produce. Coordinate things properly and accommodate the rhythm of your subordinates. If your subordinates are united in purpose, the creativity they unleash will be far greater than what you'd get from cracking a whip.
You have to let them know that Sega is not a cold machine, but a platform where they can feel at ease to showcase their talents."
Please Support me by becoming my Patreon member and get 30+ chapters.
[email protected]/Ajal69
change @ with a
Thank You to Those who joined my Patreon