At the Capcom booth, the clatter of coins was constant. The appeal of Marvel heroes had been perfectly validated on North American soil. The atmosphere of the arcade—the frantic joystick movements, the cheering crowds—had been transported intact to the exhibition floor.
David and Paul, cameras slung over their shoulders, struggled to navigate the dense crowd.
"This place is going to burst at the seams," Paul said, shielding his lens as he dodged an excited, charging man. "Media Day is an absolute paradise."
"Let's check out the South Wing," David said, pointing into the distance. "I want to see what's changed there after yesterday's report went live."
The two squeezed out of the Central Hall and made their way to the small and mid-sized developer area in the South Wing Pavilion.
The scene they found there was unexpected.
The corner that had been relatively quiet yesterday was now even more crowded than the main stage. However, the people gathered around the simple folding tables were no longer suits-and-ties investors, but a sea of geeks and programmers in plaid shirts and backpacks.
A few network engineers who had traveled all the way from Silicon Valley were gathered around the booth of a math dropout making a simulation game.
They were locked in a heated debate over optimizing the inflation rate algorithm in the game's economic model.
Another booth, showcasing a text adventure game, was occupied by several self-proclaimed washed-up Hollywood screenwriters. They were trying to persuade the young developer to reshape the script's narrative structure to better fit the pacing of a commercial blockbuster.
"This isn't a game show," Paul said, watching the crowd gesticulate wildly. "It's a Silicon Valley startup incubator."
David raised his camera and captured the chaotic yet vibrant scene.
"Carmack threw down the spark, and capital added fuel to the fire," David noted in his notebook. "Now, all the brightest minds in America are jumping into this pit."
A curly-haired young man squeezed in beside David, clutching a stack of papers.
It was Eric, who had just arrived.
"Excuse me," Eric said, his eyes on the press pass on David's chest. "Do you know where Ubisoft's investment manager is? I have an idea here that will absolutely change the history of RPGs."
David and Paul exchanged a glance.
"Try your luck over there," David said, pointing toward a few empty booths at the far end of the exhibition hall that still had their signs hanging. "But you'd better hurry. There are far more people here with ideas than there are with money."
Eric thanked him and plunged into the crowd.
By the third day of E3, the game demos had taken a back seat.
The venue had transformed into a massive marketplace, trading in ideas, code, art assets, and raw ambition for the future of the gaming industry.
The emergence of open-source engines had completely shattered the traditional moats of game development. Software teams that had once operated on the fringes of the industry were now storming in, bringing with them technical expertise and experience forged in other fields.
The Los Angeles sun streamed through the glass dome of the convention center, illuminating the bustling South Wing Pavilion.
In this hall, thick with the smell of sweat and cheap coffee, a new chapter of video game history was quietly being written.
David closed his laptop.
Next year's E3 would be ten times more brutal.
Some of the young people pitching sketches today would stand on the main stage in suits and ties next year. The rest would be devoured by this carnival of capital and technology, leaving not even a bone behind.
This was 1996.
Everyone was sprinting, terrified of missing the train to the next generation.
The bustle of Los Angeles still hung in the sweltering air of the E3 exhibition hall, where major game companies were shutting their doors to review their gains and losses, fighting tooth and nail for the upcoming release windows.
Takuya Nakayama, however, had already slipped away. He left the game-related work to Hisao Oguchi and boarded an early flight to San Francisco.
Redwood City, Silicon Valley Online Headquarters.
The air conditioning in Frank's president's office was running full blast.
Several thick actuarial reports were piled on the desk, their edges frayed from repeated handling.
Takuya Nakayama took off his suit jacket, hung it on the back of a chair, and pulled out a seat.
Tom Kalinske sat on the sofa beside him, holding a freshly brewed cup of black coffee.
"The full stress test finished running at midnight yesterday." Frank pushed the top report to the center of the table, tapping the cover twice with his fingers. "The cost model for the free email service is also finalized. Based on current server storage quotes, we've set the initial capacity for each user at 2MB. This figure puts us right on the safe side of the break-even point."
2MB.
In the future, it wouldn't even fit a single high-resolution photo. But in 1996, the era when plain-text emails were the absolute mainstream, this was enough for an average user to store over half a year's worth of daily communication logs.
"The price of storage hardware is dropping every few months," Frank added. "Once the costs come down later, we can offer capacity upgrades as a benefit, giving free upgrades to our most active users. This is much more cost-effective than spending money on GG ads."
Takuya Nakayama flipped open the report, his eyes quickly scanning the charts.
"The business logic is sound." He closed the file. "But we're not just building a standalone email product. Silicon Valley Online isn't going to make money by stuffing Viagra GG ads at the bottom of emails."
It was only a matter of time before the yet-to-be-born Hotmail took that old path of monetizing through GG ads, but Silicon Valley Online had much grander ambitions.
BBS, blogs, ICQ, and game lobbies—this established matrix of services was their true moat.
"Is the Passport system ready?" Takuya Nakayama asked, looking up.
"The core code is encapsulated," Frank said, pulling a floppy disk from his drawer. "One set of credentials, unlocking all our services. With SSL 3.0 encryption, cross-platform calls are secure. We've also developed a one-click plugin specifically for Netscape and IE. Once a user logs into ICQ or the BBS on their computer, the system will automatically recognize them and prompt for one-click authorization when they open other linked applications, including those running on the Silicon Valley Online browser, sparing them the hassle of repeated logins."
In the current internet environment, this was an incredibly forward-thinking design.
"It's risky," Tom interjected, taking a sip of his coffee. "The internet isn't a clean place these days. Malicious code and hacker attacks are becoming more frequent. Putting all our eggs in one basket means if the Passport is breached, our users' underwear will be exposed."
"That's why the Legal Department updated the user agreement last month," Frank replied, smiling like a seasoned politician. "Thirty pages of disclaimer clauses. Ordinary people won't even read it; they'll just click 'Agree.' We've limited most of our liability for damages caused by third-party attacks. Besides—"
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