Chapter 133: Expansion

However, TLF Online contained quite a few experimental elements. Insu was not trying to directly follow the MMORPG market from his previous life. His target destination itself was different. That was why he attempted these challenges, but naturally, he could not help feeling anxious.

Honestly, in the early period after launch, Insu had already achieved results comparable to ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠Ultima Online at its peak. Even so, he constantly imagined negative scenarios where the game’s popularity would gradually fade and eventually fail.

But contrary to those worries, it drew ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠an even steeper growth curve than expected and, within three months, approached the first target point of one hundred thousand.

This upward trend erased Insu’s anxiety, and at the same time, outside evaluations shifted similarly.

“Ninety thousand?”

Randy Foster, president of EA, widened his eyes after seeing the number printed in the report.

“It’s an impressive result in its own way, but it still doesn’t seem to have escaped the limitations of a niche genre.”

Unlike Randy, Jordan Reyes, the head of the Strategic Planning Team who had come to deliver the report, did not seem to evaluate it particularly highly.

“No. This is absolutely not a small number.”

“Yes. Of course, if we count the number of paid registrants, which can be considered the actual purchasers, it would probably be about double that, and two hundred thousand certainly isn’t a small figure. But compared to Parallel Soft’s previous works, we have no choice but to see this as a decline.”

In truth, it was not a particularly incorrect analysis. Moreover, EA was a major corporation that had already released multiple games with sales in the tens or hundreds of millions. Even FIFA 96, which they had released recently, sold more than five hundred thousand copies in just three months.

Of course, MMORPGs accumulated revenue continuously through subscription fees, but even then, the monthly fee was only around ten dollars. Players would need to continue for five months just to equal the price of a game package.

“Furthermore, we estimate they invested at minimum five million dollars into servicing this. That’s pure infrastructure investment cost alone, excluding development expenses.”

The report estimated that Parallel Soft had probably still not passed the break-even point.

And at this point, when MMORPGs had only just appeared, computers were still advancing rapidly, meaning game quality would continue rising as well. So no matter how well-made or well-managed a game was, they believed its lifespan would inevitably have limits.

“At best, the service will probably last around three years, and by the latter half, users will steadily decline.”

Taking into account expected total profits, risk costs, and investment costs, Jordan concluded that it was not a particularly efficient business. He believed they would see much better returns on investment by using that money to develop multiple packaged games instead.

“I think so too, but the fact remains that it showed potential, doesn’t it? And if it keeps going like this, it’ll definitely become profitable.”

“That’s true, but…”

Randy focused on the fact that MMORPGs had very little competition since the genre had only just appeared, while also generating stable monthly profits.

“And maybe there’s a possibility it could last even longer.”

Although Randy did not yet understand the concept of sunk-cost effects, he could at least guess that online games might extend their lifespans by continuously adding content.

After further deliberation, Randy decided to send additional support funds to Marvin, who was developing Eden Online.

This perspective from EA was actually among the more restrained ones. People who held limitless optimism toward the possibilities of the internet and computers became excited after seeing TLF Online’s concurrent users increase, talking as if a virtual reality world would soon unfold.

And at this time, America had only just entered the beginning of the dot-com bubble.

It was still some distance from its peak, but this was already an era where anything merely related to the internet or computers received evaluations far exceeding its actual revenue.

But TLF Online was already generating considerable revenue in reality, and it was being serviced by the company that had developed WET, one of the greatest pillars of the internet market, so it received even higher evaluations.

[Bloomberg evaluated Parallel Soft’s Game Business Division at a minimum of 400 million dollars and a maximum of 800 million dollars.]

These were the kinds of articles appearing in magazines and across the internet. In truth, considering the scale of its revenue, this was excessively overvalued. Its projected annual revenue was around thirty million dollars, meaning its EV/Revenue ratio sat between 13.3 and 26.6. Considering that traditional businesses generally ranged from 1–3 and high-growth industries ranged from 5–10, people were viewing Parallel Soft’s future with extremely rosy expectations.

(Translator’s Notes: EV/Revenue — Enterprise Value to Revenue ratio. A financial valuation metric comparing a company’s total valuation to its revenue.)

This might have demonstrated that the American market had already entered the IT bubble.

But regardless, what mattered was that the world viewed it that way.

Of course, unless a real crisis occurred, Insu had no intention of pursuing an IPO. In truth, if he thought only about profits, he could make gains far exceeding ordinary profit distributions by following the era’s trend of inflated corporate valuations, selling at high prices, then later buying back in.

However, Insu intended to continue experimental businesses in the future, and there were many ventures that needed to remain secret, so going public was not a particularly good choice if he wanted to operate the company comfortably and freely.

Still, this public interest and high evaluation acted as powerful publicity. Even during the mobile game era in his previous life, many people became interested in games after seeing their revenue rankings, so there was nothing strange about people becoming interested after seeing corporate valuation assessments.

After all, receiving high evaluations meant many people were enjoying it, and that it had been verified to some extent.

And this intense interest in MMORPGs greatly benefited not only Parallel Soft but also development companies in Korea across the sea.

“The servers crashed again!!!”

It was the development office of Elec Cloud in Pyongyang. Seong Chansu shouted with something closer to a scream than joy.

Certainly, it was welcome that so many people showed interest and participated in the open beta, but the problem was that Elec Cloud lacked the capacity to handle them.

Even though a month had already passed since the open beta began, the server problems were still unresolved. Which made sense, considering they had expected close to one thousand users but instead attracted tens of thousands.

As a result, even after launch, the development team spent each day with their nerves stretched thin while repeatedly managing servers, limiting connection times, limiting user counts, introducing distributed server structures, optimizing clients, and patching the game.

And recently, somehow, representative Ahn Seongho had secured access to the lines and infrastructure usage rights of iNet, one of Korea’s top three ISPs. There were also rumors that they had even borrowed government servers through iNet, though this had not been confirmed.

In any case, thanks to that, although the servers constantly exploded, the game somehow continued operating.

“Even if our stomach bursts, we have to swallow it first!”

Ahn Seongho practically barked at the wailing Seong Chansu. Seong Chansu also knew that the users they secured early on would directly translate into revenue, so rather than getting emotionally hurt, he simply searched for solutions together with the team members.

In truth, their game, Kingdom of the Winds, was an extremely simple game compared to TLF Online. Because of that, there were quite a few disappointed reactions within communities.

But it was still undeniably an MMORPG, so there was no problem enjoying a virtual world realized online.

And above all, Korea still did not have TLF Online.

As a result, the attention gathered around MMORPGs due to TLF Online’s success—especially the intense interest in Parallel Soft within Korea—greatly benefited Kingdom of the Winds.

But Elec Cloud had no room to feel grateful for it. No, even after escaping this current chaos, rather than feeling grateful, they would likely feel a sense of crisis toward TLF Online, which would someday enter this land, and desperately run in order to escape it.

Recently, Parallel Soft had created the ESD Business Team. At this point, hiring developers in LA for projects of this level and scale was no longer particularly difficult.

Although some time still remained before the full-fledged internet era arrived, the fact that it was coming had become obvious. So people with even a slight ability to look ahead, along with those possessing ambition, had begun pouring out after finishing their preparations.

And since ESD was something Insu had prepared for a long time, its planning and design were meticulous, so there was no problem in proceeding with the project itself.

However, through this opportunity, something they had continuously worried about finally crossed the critical point.

“I think we need to build a headquarters building after all.”

Jung Hyein, Insu’s mother and the CEO of Parallel Soft, spoke seriously while looking at her son and husband.

The building rented out by Velocity had been sufficiently large, but that was only by the standards of a small-to-medium packaged game developer.

Once WET had somewhat stabilized and TLF Online’s development entered full swing, the building had become saturated.

However, there were several reasons why they could not immediately build a headquarters at the time.

“First of all, we didn’t have the money.”

Hyein spoke with a bitter smile.

Both WET and TLF Online were expected to require enormous investments, and revenue from existing games had been declining while no new revenue was yet appearing, so it was difficult to take the risk of constructing a large-scale headquarters in LA, where both land prices and construction costs were high.

Moreover, LA had a highly developed rental business environment, so there was no need to specifically buy a headquarters building. It was easy to rent offices and expand as needed.

“And because you kept launching all kinds of businesses, Insu, while WET and TLF Online expanded explosively, it was difficult to predict how large things would ultimately become.”

“Ah. That makes sense.”

In truth, things were still growing rapidly enough that even Insu himself could not estimate how large Parallel Soft would become.

‘We already had around eight hundred employees by now, right?’

Someone might wonder why they were suddenly talking about headquarters construction when things had functioned without major problems until now.

It was not for appearances, nor because they begrudged rent expenses. The primary reason was that, because they had hurriedly acquired office spaces here and there while expanding, the business divisions had become scattered all over the place, making management and cooperation difficult.

“WTALK kept things functioning somehow, but even so, we can’t completely ignore physical distance.”

“That’s true.”

Even if they exchanged real-time messages through WTALK, unless they were inside the same building and connected through the same LAN network, exchanging images in this era was still difficult. It was technically possible, but extremely slow. Moreover, preview functions did not exist yet, so after receiving files, people had to separately open them through viewer programs, making messenger usage fairly frustrating.

Implementing such features in code was not actually that difficult, but considering network speed and memory limitations, it was still impossible for now.

And because digital approval systems did not yet exist in this era, they had to exchange paper documents directly, which also suffered heavily from physical limitations.

Honestly, to future-born Insu, it looked like a waste of paper, but digital approval systems would not appear until the late 1990s, so there was nothing they could do.

Of course, developing one internally was not impossible, but they already had too many ongoing projects, and they lacked the time and energy to spend on projects with low profitability. Besides, under current network conditions, it would probably struggle to function properly anyway.

“According to the calculations from the planning team employees, no matter how conservatively ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠we estimate, the company will exceed two thousand employees within ten years. So if we build according to that scale, it’ll cost at least fifty million dollars ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠and possibly up to one hundred twenty million.”

“One hundred million dollars?!”