Royal Road: $299.99
Yoo Jae-won’s first impression upon seeing the number was, “Not bad?” At $14.50 for the 3D acceleration chip and Glide X2 license combined, $29.999 seemed like a reasonable price—generous, even. After all, Glide X2 was being distributed free to VGA manufacturers and game developers, and it was also included at no cost as middleware in the Android operating system.
His reaction shifted to “Wait, what?” the moment he realized he had misread the decimal point. It wasn’t $29.999. It was $299.99.
$299.99. That was the launch price of the original PlayStation. The misplaced decimal had been his own oversight, but he still couldn’t understand why anyone would propose such a figure. Fortunately, the number wasn’t presented in isolation; several lines of explanation followed.
- $299.99 is the planned launch price for the console tentatively named PlayStation. Market research showed that any higher price would sharply reduce purchase intent, while any lower price would cause Sony’s losses to balloon. This is the most balanced figure we could determine.
As you can see from the parts list above, the manufacturing cost alone already exceeds $299.99. Adding the licenses for the 3D acceleration chip and Glide X2 only increases Sony’s burden further.
“This guy sure knows how to complain.”
It was less a proposal than a lengthy plea. Just as Ken Kutaragi had said, Sony had always sold the PlayStation hardware at a loss—a tradition that continued with every subsequent generation. Yet the game business not only survived but thrived, becoming the cornerstone of Sony’s entertainment division, because software revenue and profits more than offset the hardware deficits.
The plea continued for a few more lines. Yoo Jae-won grumbled but kept reading.
- Of course, if you prefer, Sony is willing to pay a fair licensing fee. However, I would like to make a proposal that is deeper, more tightly integrated, and mutually beneficial.
Mutually beneficial?
- Once PlayStation is complete, Sony plans to establish a dedicated game subsidiary called Sony Computer Entertainment. If ID Group is willing to participate more actively in PlayStation rather than simply supplying licenses, we are prepared to offer equity in Sony Computer Entertainment. If my explanation is insufficient, please let me know. I will visit your company personally to explain in detail.
- Ken Kutaragi, PlayStation Project General Manager.
That was the end of the document.
Equity in Sony Computer Entertainment. The idea was mildly tempting. The division would become the core business that revived a struggling Sony. The key question was how large a stake could be obtained. Demanding a major shareholder-level share for just the 3D acceleration chip and Glide X2 licenses would be outright robbery, even by his own standards. To increase the equity percentage, he would need to contribute not only the licenses but also new technologies and a substantial amount of capital.
“Well, well. I thought he was just good at talking, but he knows how to negotiate too.”
In his previous life, Ken Kutaragi’s nickname had been “Liar Kutaragi.” The first PlayStation had been relatively restrained, but the hype surrounding the second and third generations had been excessive. The PlayStation 2’s CPU was given the grandiose name “Emotion Engine,” claiming it could process human emotions. The 3D acceleration chip was marketed as a “Graphics Synthesizer” boasting enhanced performance. That talent for exaggeration exploded with the PlayStation 3, which was said to recognize gestures and emotions, deliver a thousand times the performance of the PlayStation 2, and function not merely as a game console but as an all-in-one entertainment device.
At the manager level, his boasting was still moderate, but once he rose higher, the bluster would surely erupt. The signs were already visible. He was trying to trade shares in a company that did not yet exist—Sony Computer Entertainment—for ID Technology’s advanced technology. Yoo Jae-won could accept the offer because he knew SCE would succeed, but to anyone else it would have seemed absurd.
“Hold on. Glide X2 is an Android-based library, isn’t it?”
Yoo Jae-won suddenly recalled an important point Ken Kutaragi had overlooked. Glide X2 was a 3D library built on the Android operating system. In other words, the library could only be used after Android itself was running. Yet the PlayStation would not use an Intel-compatible x86 CPU; it would employ a custom processor with its own instruction set—MIPS. That meant Android, originally designed for x86, would have to be heavily slimmed down and optimized for a dedicated game console.
“Ah, game consoles don’t have hard drives either, do they?”
Hard drives would eventually become standard in game consoles, but that was impossible at present. Everything had to fit into a 1 MB ROM, with only 2 MB of main memory. The system would need to be extremely lightweight for games to run smoothly.
“Sony won’t be able to handle that, so we’ll have to do it. Which means…”
Creating a dedicated game-console operating system was a massive undertaking. In return, ID Technology’s stake in SCE would have to be correspondingly large. Yoo Jae-won reassessed the value of ID Technology’s technical support. No exact figure emerged, but it was significantly higher than his initial estimate.
“At the very least, we should aim for forty percent or more.”
Once they were building a custom operating system anyway, they could add several distinctive features that would further increase PlayStation’s value—such as VCD playback. While developing the second and third patches for Android, Yoo Jae-won had also released image and video codecs far more efficient than older formats like PCX or GIF, yet capable of high-quality, high-resolution playback. Currently used mainly on adult sites, the technology had enormous potential for mainstream applications, including VCD. With Android’s video codec, an entire movie could fit on a single CD with far superior quality to VHS tapes. Adding this capability would turn PlayStation into more than a game console—it could also serve as a video player.
“Oh, and there’s the vibration controller too.”
With 3D acceleration performance surpassing arcade machines, a wave of new peripherals was emerging. Yoo Jae-won had been considering releasing a vibration pad. The Android division in Redmond had inherited Microsoft’s hardware team, so the capability existed. A vibration controller would enhance immersion on both PCs and game consoles, giving players a tangible sense of in-game events. It had not been released yet, but integrating it into PlayStation would give Sony a decisive edge over Nintendo.
Yoo Jae-won still held one more hidden card.
“We could even develop games for PlayStation ourselves.”
Besides the Virtual Boxing title created for Android 1.0’s launch, there were also Doom and Doom 2, which were taking the world by storm.
“Hmm. Forty percent might not be enough. We should probably ask for forty-nine percent.”
It was not greed. Objectively, Yoo Jae-won could launch an independent game-console business if he wished. Agreeing to partner with SCE instead was a level of support worthy of a full joint venture. Therefore, a forty-nine percent stake was only fair.
“I wonder if Ken Kutaragi and Sony’s executives will accept.”
Yoo Jae-won didn’t particularly care. If they accepted, fine. If not, he would simply build his own entertainment division. Manufacturing game consoles did not require overwhelmingly difficult technology. The real challenge was securing enough third-party developers to supply high-quality software—and that was not a problem for him.
“All right. Time to write a reply.”
Having organized his thoughts, Yoo Jae-won began drafting his response. He was not crafting a polished formal document; he simply needed to clearly record his position. Once finished, he would send the file to Allen, whose legal team would review it, format it properly, and return it for final approval before dispatch to Sony.
In the past he had sent messages directly, but as the company grew, additional layers had become necessary. Even so, the process never took more than two days thanks to ID Talk, the best messenger in existence. That was the advantage of ID Group—still agile despite its size.
“Now then, shall we start preparing for departure?”
With his work done, Yoo Jae-won shut down the computer. He had rested sufficiently in Korea. It was time to return to the United States, actively pursue negotiations with Sony, and prepare for university.
“Come to think of it, leaving the country is work too.”
Unlike before, simply flying to America would disappoint too many people. He would need to visit his father’s and mother’s families, pay respects to his teachers and major shareholders, and show his face at the Korean business sites. Last but not least, he could not skip former Prime Minister Jeon Myeong-heon. He owed the man thanks for keeping his promise and should offer some assistance with the upcoming presidential campaign.
At the same moment, in Silicon Valley, the long-standing local powerhouse was HP. HP’s growth, rooted in the valley’s very beginnings, continued. Yet when it came to sheer presence, another company surpassed it: the colossal dinosaur known as Intel.
The IT industry had grown alongside computers. Among all computer components, the CPU was the most critical, and no one could deny that Intel produced the world’s best CPUs. Intel itself continued to push performance higher through steady innovation. By doubling computer performance every eighteen months while keeping prices stable—the embodiment of Moore’s Law—the company’s pride was well earned.
Now Intel’s top executives had gathered in a conference room deep within headquarters. CEO Andy Grove was present, along with the lead engineer who had designed the Pentium CPU. Also in attendance were two programmers who looked uncertain why they had been summoned before such high-ranking figures. Although Intel was a hardware company, it maintained a small development team to create drivers and utilities that allowed its hardware to run across various platforms. The programmers prided themselves on their elite skills when it came to directly handling CPUs—at least until ID Technology had appeared.
“There’s something I need you two to do,” Andy Grove said, calling the programmers who had been standing awkwardly since entering the room.
Two computers sat on the table before the executives. The programmers looked slightly relieved. Both machines were the latest high-performance PCs equipped with Intel’s flagship Pentium CPUs and running Android 1.0.
“A benchmark program is already installed. You’re probably familiar with it.”
At Andy Grove’s words, the programmers glanced at the desktop and chuckled. The benchmark he referred to was one they themselves had created—the Intel Burning Test, designed to evaluate CPU performance and stability. It worked by continuously calculating the value of pi, an irrational number with no end, measuring how many digits could be computed per second. Running the calculation at full load also tested whether the CPU remained stable under maximum stress. Additional tests checked input/output performance. Intel had traditionally outperformed competitors in hard-disk read/write speeds thanks to solid fundamental design and careful driver optimization.
“Run the test simultaneously on both systems and examine the difference in results. We want you to figure out why that difference occurs.”
A more difficult request. Performance differences could stem from many causes. Still, because the order came directly from the CEO, the two programmers immediately set to work. With Andy Grove, Vice President Dave House, and other senior executives including Noyce and Moore all watching, cold sweat ran down their backs. Even so, their hands moved smoothly over the mouse and keyboard; this was routine work.
They did not launch the program recklessly. “We should check the system status first.”
“Go ahead.”
With permission granted, they opened Android’s device manager and viewed system information—the section that listed every device connected to the operating system. Any improper connection would display a large exclamation mark beside the device name. Fortunately, no such marks appeared. Performance was excellent: Intel Pentium 66 MHz CPUs paired with 8 MB of memory. Both computers had identical specifications.
Next they checked the operating-system manager, which displayed installed software and driver status. Here a difference appeared. One machine ran the latest patched Enterprise edition of Android, while the other ran the freshly released 1.0 version. That was the only distinction.
“We’ll run the test now.”
The programmer tilted his head in confusion. He still could not understand why the executives wanted this particular test performed.
After roughly ten minutes, a gap began to emerge between the two machines’ scores. The system running the original Android 1.0 was posting approximately five percent higher performance than the Enterprise edition with the latest patches. The difference grew even larger during the hard-disk read/write portion of the benchmark.
“There’s a difference,” the programmer announced.
Murmurs spread among the executives, though no one seemed greatly surprised. Andy Grove and the other leaders had apparently already anticipated this outcome.
The programmer himself struggled to explain the result. Logically, the Enterprise edition, built to support newer systems, should have performed better—or at least comparably. Yet it was scoring lower than the free advertising-supported version. He immediately launched a monitoring program that displayed real-time input/output status, one of the new management features added in the Enterprise edition. It provided far more detailed information than the benchmark numbers alone.
Through the monitor, the performance gap was undeniable.
“We want to know exactly why this difference exists,” Andy Grove said. “Could it be a problem unique to our Intel CPUs?”
The programmer felt overwhelmed. Answering would require extensive investigation. They had only performed a quick software-level check so far; a proper diagnosis would require opening the cases to verify whether the CPUs were receiving adequate cooling and whether the connectors between the motherboards and hard drives were properly seated. Beyond that, other systems would need testing—comparing results across AMD and Cyrix x86-compatible CPUs with each Android patch version.
“Understood. We’ll give you time. Pause whatever you were working on. We’ll adjust your schedules so you can investigate thoroughly and submit a detailed report. When you run verification tests, be sure to include compatible CPUs from other manufacturers as control groups.”
“Yes, sir.”
The two programmers accepted Andy Grove’s orders. They especially noted his emphasis on testing rival CPUs. Unbeknownst to everyone present, the performance issue that had startled Intel’s CEO and executives was actually the side effect of a stealth patch for a serious bug lurking inside Intel CPUs—the Meltdown vulnerability. Because the patch had been distributed without announcement, Intel’s leadership, unaware of the true cause, began to harbor serious misunderstandings about the situation.