Chapter 115: WET’s Overseas Expansion

In this era, downloading a client that was around 20–30 megabytes was already fairly burdensome, and online payments were not yet familiar, so to solve these issues, online games often used a distribution method where they sold physical packages that included usage rights inside.

This practice only existed briefly in East Asia during the early days, but in the West, it continued for quite a long time. Even World of Warcraft, a game from the 2000s, sold packages that way.

Of course, by 2025, even ordinary single-player games had become digitalized, so physical packages only remained as limited-edition collector items for certain fans and disappeared from standard distribution methods.

From Parallel Soft’s perspective, selling packages was actually profitable.

Even considering distribution costs, these early packages were priced much higher than subscription fees, usually at around the same price as a single-player game.

In the case of World of Warcraft, millions of these packages were sold, generating enormous profits. On top of that, they reduced server download traffic, lowering server resource consumption. For an internet company like Parallel Soft, server resources were practically the same thing as money.

However, Insu was currently preparing WPAY, and although it was still difficult for now, he also planned to develop an ESD platform like Steam in the near future, so he was slightly troubled because it felt inconsistent.

“Well, thinking about that ESD thing, it probably would be good to ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠let gamers get used to the experience of downloading and playing games.”

At first, Seongcheol spoke as though he sympathized with Insu’s concerns.

“But we aren’t the only ones in the world anyway. Even if we alone insist on downloads, public perception won’t suddenly change overnight.”

“That’s true.”

“So wouldn’t it be fine to sell packages in the beginning, then gradually transition to digital distribution?”

The more he listened, the more it made sense. And when he thought about it, they were not forcing package ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠purchases anyway. Since they already planned to support downloads simultaneously, they simply needed to guide users toward digital distribution at the appropriate time.

“But when we sign with Velocity, I think we should clearly specify this point in the contract. And set a time period too.”

“Of course. Otherwise they could come after us for damages.”

From their perspective, this was part of a broader strategy, but from Velocity’s side, such a transition would naturally interfere with the package sales they handled. If it was not clearly written into the contract beforehand, problems were inevitable.

Insu also considered using his returner knowledge to issue things like prepaid gift certificates. If this had been Korea, it probably would have been a decent method.

“But offline distribution costs more than you think.”

The problem was that this was America, a country with enormous territory and low population density. In truth, Seongcheol and Hyein had already considered handling distribution for Parallel Soft’s games themselves long ago. After all, the money taken by distributors felt wasteful.

But they eventually realized the costs were far higher than expected and gave up.

On top of that, they had already heard about Insu’s vision of ESD. Spending at least two million dollars in initial costs and enormous effort for a distribution network that would not even last ten years felt too wasteful.

And even if the money paid to distributors instead went directly to the developer, that did not mean it would all become profit. Operating costs were enormous, and taxes would take a huge bite out of the increased revenue.

“Besides, gift certificates mainly target children who can’t easily use credit cards, right? Then we’d need to be even closer to consumers directly, and that would increase costs further.”

Perhaps if they expanded the scale later by creating more uses for it, things might be different, but issuing them solely for a monthly subscription was not financially worthwhile.

“We’ll have to put it on hold for now.”

After payment methods, they also discussed distribution methods.

Internet downloads were obvious, and they also planned to distribute packages, but considering the internet environment of this era, the more methods they had, the better.

“Dad, what about including it as a magazine bonus CD?”

“Ah. That’s a good idea.”

At the time, American computer and gaming magazines were already using CDs as promotional ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠bonus items.

These CDs contained demo versions of games, shareware, various utilities, videos, trailers, and similar content.

An online game client would probably make for decent bonus material as well.

Magazine companies were always looking for things to fill their bonus CDs with, so they would likely include it even without payment. And even if they demanded some advertising fees, it would not really be a loss. It would expand their distribution reach while reducing server strain.

They also discussed overseas expansion, but since it was difficult to say the domestic market had been fully validated yet, they decided to revisit the discussion after observing reactions following the official launch.

In this way, management was just as busy preparing for launch as the development team.

At present, TLF Online’s official service was the most closely watched project, but that did not mean Parallel Soft’s other businesses were sitting idle.

WET currently held a 62% market share within America, effectively dominating the American market.

Of course, they continued investing aggressively by adding services like WTALK and increasing server capacity to solidify that position, but at the same time, they were also looking for other markets.

“First, Japan.”

“Right.”

Seongcheol immediately agreed with Hyein’s words.

It was an obvious choice. Japan was practically the only country besides America with strong economic power and similarly well-developed data communication infrastructure.

“Japan also has pretty high ISDN penetration, right?”

Seongcheol spoke while recalling how excited he had been when ISDN first began spreading two years earlier, only to find adoption progressing far slower than he had expected.

“Well, the government is supporting it heavily. But overall internet penetration is still a bit lower than here.”

Having infrastructure did not necessarily mean high internet adoption. Japan mainly used ISDN to expand PC communication services. Internet penetration remained around 3–5%. However, having infrastructure in place also meant the environment was prepared, so once momentum started, adoption could spread quickly.

Countries like Germany or the United Kingdom, which were lower priorities, had comparable economic strength but relatively weak internet infrastructure.

Japan also had a comparatively lower language barrier. Of course, Japanese and English were completely different languages, but the two countries were economically close enough that companies from each country frequently expanded into the other.

Even with such favorable conditions, however, there were still problems.

In fact, they had been aiming to enter Japan since 1995.

But when they attempted to establish a Japanese corporation, approval never came.

The reason was Japan’s information industry protection policy. At the time, Japan was actively supporting its information industry. It was the same reason ISDN spread quickly there.

As a result, Japan was extremely wary of foreign companies in the information industry—especially companies from technologically superior countries like America—entering and dominating its domestic market.

Still, Japan was not some dictatorship or closed-off nation, so they could not completely block foreign companies from entering.

“TohokuNet rejected us too. They said they’d discuss it internally some more, but MiraiTel and Shin Nihon Fiber said similar things and just kept stringing us along.”

After listening to a long phone call, Seongcheol hung up and grumbled toward Hyein. He had not personally spoken with Japan; rather, he was receiving reports from the employee handling negotiations.

After their application to establish a corporation was rejected, they investigated further and discovered that creating a joint venture company was possible. So they began trying to contact local Japanese internet and communications companies, but things had not gone smoothly.

“So basically, they see no reason to split the profits with a foreign company.”

Since it was not a particularly difficult issue to understand, Hyein quickly guessed the reason. The concept of a portal site itself was not complicated, so perhaps those companies already planned to create their own, or perhaps they believed their existing primitive portal sites were already sufficient.

But from the perspective of Seongcheol and Hyein, who had launched and operated WET in America and watched it grow, the outcome was obvious. If WET landed in Japan, it would devour the Japanese market in no time.

After all, America already had sites like those. More precisely, they could be seen as evolved forms of PC communication services. They were essentially closed subscriber-based communities updated with graphical UIs and content suited for the current era.

“Trying to work with communications companies was our mistake.”

Seongcheol spoke with a bitter smile. He had chosen them because they understood internet services and possessed the technical foundation, but from their perspective, it probably looked like an invasive species barging into their territory.

In any case, now that they understood the problem, they simply needed to approach things from a better angle.

Seongcheol began looking for companies that lacked communications expertise or were only just beginning to enter the field.

He also contacted TechnoShoku, with whom they already had a relationship. While it was not exactly their specialty, they were still part of the computer industry and should have at least some understanding of the internet. More importantly, they possessed substantial capital and scale.

‘We apologize. At present, we have no plans to expand into that business area.’

But they were rejected.

The exact reasons were unclear. They simply discovered information online showing that TechnoShoku had released quite a few internally developed games, so they vaguely guessed the company had no room left to focus on anything else.

“What about Vyrex or Newbo?”

Once Insu learned they were searching for Japanese companies, he quietly offered his opinion. The two companies were similar to Sony and Sega from his previous life, and he wanted to establish relationships with them later for TLF Online’s Japanese market expansion and future console game collaborations.

“Yeah. Those could work too.”

After thinking briefly, Seongcheol nodded. Both were IT-related companies with considerable scale, making them suitable partners for a joint venture. Moreover, neither had fully entered the internet sector yet.

So they attempted contact.

Even now, both companies were enormous. Vyrex in particular had annual sales reaching tens of trillions ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠of won.

‘Ah! Parallel Soft? The company running WET, right?’

Although Vyrex was a giant corporation, Parallel Soft’s name value was no longer inferior. Of course, in terms of actual revenue, the gap was still incomparable, but Parallel Soft was receiving expectations so high that people were already calling it the future center of the internet ecosystem.

Thus, contrary to Hyein and Seongcheol’s concerns, Vyrex welcomed the contact rather warmly instead of reacting coldly.

However, despite that, the response to the joint venture proposal itself was not especially positive.

‘We apologize. We’ll consider it seriously, but we’re also considering developing our own independent platform.’

Newbo’s response was much the same.

Before making contact, they had already heard analyses suggesting both companies preferred building independent ecosystems over partnerships, but they had not expected such a clean rejection.

“I don’t think this route is going to work.”

“Yes. Nothing we can do.”

Though disappointed, Insu merely nodded. It was not something he was directly handling, nor was there much he could personally do about it, so he simply left the office.

Then again, considering Sony from his previous life, perhaps this outcome had been inevitable.

Starting with Betamax, then Memory Stick, UMD, MiniDisc, ATRAC, and countless others, Sony had repeatedly failed while stubbornly pushing closed, proprietary standards, eventually collapsing in nearly every hardware market outside gaming consoles.

(Translator’s Note: Memory Stick — Sony’s proprietary flash memory card format introduced in 1998.)

(Translator’s Note: UMD (Universal Media Disc) — Sony’s proprietary optical disc format used primarily for the PlayStation Portable (PSP))

(Translator’s Note: MiniDisc — Sony’s magneto-optical disc storage format introduced in the 1990s for audio recording and playback.)

(Translator’s Note: ATRAC — Sony’s proprietary audio compression technology used in products such as MiniDisc players.)