The 49% Stake
Royal Road
“Does the joint venture really have to be exactly 49 percent? Is there no other way?” Ken Kutaragi asked, his eyes filled with unease.
Yoo Jae-won nodded. A soft sigh escaped Kutaragi’s lips, yet Jae-won did not miss the faint trace of relief that flickered across his face. That relief came from confirming that ID Group had no immediate intention of entering the game console business itself—its priority lay in acquiring equity rather than direct competition. Jae-won had already read the man completely.
In truth, ever since arriving at the mansion the previous evening, Kutaragi had been playing right into Jae-won’s hands. Jae-won had shown him every groundbreaking technology without reservation and even handed over the Shell Book for him to test overnight. Jae-won had been prepared to let Kutaragi disassemble the device if he wished, but the engineer had not gone that far. Naturally, every gesture had been calculated to win Kutaragi’s favor.
“Yes. I believe 49 percent is a fair price,” Jae-won replied, nodding firmly. His tone left no room for negotiation on that figure.
“W-what happens if SCE cannot meet the equity requirement?”
“Then we will have no choice but to enter the market ourselves, even if it proves burdensome.”
Kutaragi had just heard the answer he least wanted. Yet the claim that it would be “burdensome” puzzled him. How could a company overflowing with both technology and capital find anything burdensome? Still, it was the unvarnished truth. The burden lay not in launching a game console, but in starting any new venture at all. In just a few days, Remington’s maternity and childcare leave would begin. The man who had handled nearly everything in Jae-won’s stead at ID Technology would be absent. Allen was set to serve as acting president, but he already carried a mountain of responsibilities. Hiring a vice president would be simple in theory, yet finding an executive one could truly trust was proving difficult. Candidates were still under review. Someone who acted obsequious in front of Jae-won but tyrannized subordinates would quickly erode organizational cohesion. In the twenty-first century, flexible corporate culture and internal reporting mechanisms made such problems easier to detect, but this was 1992—even in America, such systems could not be relied upon. Choosing the right person from the start was therefore critical.
Everything looked successful on the surface, yet the real challenges lay ahead. There had been several candidates, but none had passed the vetting process. In fact, two executives had already been dismissed during verification—one for sexual harassment, another for abusive power plays. Finding someone both competent and principled was proving far harder than expected.
That was not the only reason. ID Group was currently consolidating its organizational strength to the utmost. The acquisition of Comcast was imminent. With over ten thousand employees and sales offices across North America, Comcast was a massive enterprise. Jae-won could have left its management untouched after acquiring the shares, but its bloated and inefficient operations had become a byword in American business. Leaving that culture intact went against his nature. To integrate Comcast into ID Group’s culture and maximize synergy, the entire organization needed to stand united. Under these circumstances, entering the new game console market had to take a backseat.
That was why Jae-won’s roadmap called for securing 49 percent of SCE first. Should Sony’s management situation deteriorate, he would quietly acquire just over 1 percent more and seize control. Kutaragi, now visibly anxious, spoke up.
“Um, may I use the telephone? I would like to contact the company again.”
He had resolved to persuade Sony’s executives one more time. Jae-won glanced at his watch.
“Right now? It must be early morning in Japan.”
Kutaragi froze. It was already 1:50 p.m. in San Francisco. With a sixteen-hour time difference, Tokyo was at 5:50 a.m.
“There is no rush,” Jae-won said calmly. “I still have several days before orientation. Take your time.”
He radiated composure. This was not the twenty-first century, where every hour felt urgent. In 1992, life moved at a leisurely pace. Smartphones did not exist, and mobile phones were rare. News came only from television and newspapers. Jae-won himself had no pressing schedule—only the freshman orientation in three days. Unlike Korean orientations, Stanford’s would not revolve around drinking. It was a practical session focused on understanding the academic system, course registration, and meeting professors. Jae-won planned to attend; he needed to consult his academic advisor and the professors of his required major courses.
“Ah, of course,” Kutaragi murmured, rising halfway before sinking back into his seat with a defeated expression.
“Until your colleagues start their workday, why don’t we continue discussing the PlayStation? I would like to hear your vision, Ken.”
Jae-won already knew the success story of the PlayStation, but hearing it directly from its creator was a first. Intimidated by ID Group’s technological prowess and troubled by how to change his headquarters’ stance, Kutaragi began haltingly. Yet as time passed, his voice grew steadier and his passion surfaced. This was a project he had started out of genuine love, and speaking his long-held vision aloud for the first time brought it vividly to life. Jae-won proved an excellent listener, offering encouragement and thoughtful comments that fueled Kutaragi’s enthusiasm further.
Several hours slipped by. Their conversation moved from drinks in the car to a full meal, and eventually to alcohol. Jae-won sipped a non-alcoholic beer while Kutaragi and Kensuke drank real beer. Though no one would have stopped him from drinking, Jae-won had promised himself he would not touch alcohol until he came of age. Abstinence had become second nature; even watching fresh draft beer poured right in front of him left him unmoved. The memory of his regression, when he had grumbled about receiving only soda while others got fine champagne at the Blue House, now felt distant.
With alcohol loosening the atmosphere, Jae-won spoke his mind freely.
“I envy you.”
“Pardon?”
“From the moment I first met you, I felt a strong affinity. Now that I have heard your vision, I am certain you are the right person to lead the game console business. That makes me covet you.”
The direct statement left Kutaragi speechless. He had always taken pride in his abilities, yet standing inside ID Group’s mansion had shaken his confidence. He had worried about returning empty-handed after boasting to his company. Hearing Jae-won acknowledge his talent left him utterly disoriented.
“W-what do you mean?”
Jae-won explained patiently. “You agree that the technology we intend to provide Sony is worth more than a 49 percent stake in SCE, correct?”
“Of course.”
“Nevertheless, I chose to pursue a joint venture because ID Group currently lacks the capacity to launch a new business. We are still stabilizing our organization, and while we have the money and technology, we are short on people.”
To Kutaragi, it sounded enviable. Sony’s situation was the opposite—lacking both funds and technology, though it had personnel.
“That is why I decided on a partnership. But if Sony’s management fails to appreciate the value, we will have no choice but to move independently, even at some cost.”
Kutaragi nodded. As a Sony employee, he should have mounted the strongest possible defense of his company’s position, yet he was completely convinced—both technically and logically. Even Kensuke, the interpreter, found himself in the same state.
“If we must proceed independently, I would like to appoint you, Ken Kutaragi, as head of our game console division.”
“I… I…”
The unexpected offer left Kutaragi at a loss for words. Jae-won waited patiently. Gradually, Kutaragi collected his thoughts.
“I admire America, but I have never considered living here. Besides, if I suddenly left, I would feel ashamed before my colleagues.”
His refusal was clear. After all, Kutaragi had joined Sony as a rank-and-file employee and worked there for over a decade. He now led the entire PlayStation project. It would be unreasonable for him to abandon everything after meeting Jae-won for only two days. Yet Jae-won merely smiled. The refusal was expected, but there was ample room to maneuver.
“I understand. However, you need not worry about relocation. We can establish the game console division in Tokyo without issue.”
ID Group already operated largely online. Executives communicated through ID Talk, and nearly all internal processes had been digitized. Geographic constraints mattered little. ID Technology was already spread across Silicon Valley in San Francisco, Redmond in Seattle, and Gangnam in Seoul. ID High Tech maintained operations in Redmond and Moscow. ID Investment followed a similar pattern. Adding a new entity in Tokyo would pose no significant difficulty.
“Moreover, it is ID Group’s policy to grant division heads full authority over their organizations.”
In other words, Kutaragi would not have to worry about his current team members. Jae-won stood to gain as well—poaching talent from a competitor delivered double the damage. Of course, with great authority came great responsibility.
“Well, the negotiations with SCE may succeed. Even if they fail, we will license the 3D acceleration chip, Glide X2 library, and VCD to you at a low price. Since ID Group has no immediate plans to enter the console market, take your time to consider.”
Kutaragi felt the crushing pressure lift. The assurance that he could still obtain the 3D chip and Glide X2 even if the equity deal collapsed brought color back to his face. With those two technologies alone, the PlayStation could be completed. He still coveted the live force-feedback technology and analog stick, but those would require alternative solutions. Then a sobering thought struck him. Accepting the 3D chip and Glide X2 without an equity stake would mean technological dependence on ID Group—a dependence that could prove decisive if ID Group later entered the console market. From a developer’s perspective, porting games built on those technologies to ID Group’s console would be trivial. Furthermore, ID Group’s future console would incorporate advanced features such as live force feedback and VCD playback, all backed by enormous capital that would allow aggressive pricing. Competing against that would be daunting.
The best outcome remained a 49 percent equity partnership, yet Sony’s executives would never accept it. The path to failure was painfully obvious, but even explaining the risks would not sway them—they would cling to their own plan. Kutaragi’s expression darkened once more.
The next day, Kutaragi and Kensuke left the ID Group mansion with faces full of regret. As both had anticipated, the equity negotiations collapsed. In their place, licenses for the 3D acceleration chip and Glide X2 library were granted for twenty million yen—roughly 130 million Korean won, a bargain price. The VCD license was provided free of charge. Jae-won reasoned that image formats and video codecs could generate profit later, once they became industry standards. In computer technology, the winner took all; securing the largest possible user base was paramount. The deal was undeniably cheap, though Sony would receive no technical support and would have to tune the Glide X2 library for the Android operating system themselves.
“Safe travels,” Jae-won said, extending his hand beside the Rolls-Royce that would take them to the airport.
“Thank you for everything,” Kutaragi replied, shaking hands with visible reluctance. He did not forget to shake hands with Kensuke as well.
Even after they departed, Jae-won felt no disappointment. Having witnessed ID Group’s extraordinary technology, Kutaragi would never be satisfied with the PlayStation project alone. His ambition to add more features would inevitably clash with Sony’s management, and with each clash, thoughts of Jae-won and ID Group would grow stronger. The fish was already hooked; now it was only a matter of waiting for the right moment.
A few days later, Remington visited Jae-won’s residence. His maternity and childcare leave began the following day, and he had come to say goodbye. Since he would remain at home rather than travel far, Jae-won could visit anytime. Consequently, the conversation focused less on Remington or the coming child and more on Jae-won—tomorrow marked his university orientation.
“It feels strange to think of the boss going to college,” Remington remarked.
Jae-won agreed. He had already spent nearly four years running a company. Normally, people finished university before entering society, yet Jae-won had built a major corporation first and was only now enrolling. By age, he was still a high school student. The situation felt surreal to Remington—like turning away for a moment only to find his once-youngest sibling suddenly heading off to university. Jae-won’s path was indeed unusual. Most founders who later pursued higher education followed a linear route, and child prodigies typically accelerated through early admission. Jae-won was traversing both paths simultaneously, which made him appear peculiar.
“There is nothing I can teach someone as capable as you about university life,” Remington continued. “But there is one thing I worry about.”
Jae-won prepared to listen. Though Remington had graduated from UCLA some time ago, his advice would be valuable.
“You only need to be careful about one thing, boss.”
“What is it?”
“Women.”
Women? Jae-won blinked.
“You may not realize it, but you are essentially a walking lottery ticket. You probably think you can simply exercise self-control, right?”
“Wouldn’t that be enough?”
“Not at all. No matter how defensively you drive, plenty of cars will swerve into your lane without signaling. Likewise, the slightest opening will invite trouble. I had a friend who was a football scholarship student—a quarterback. He was exceptionally talented and destined for a first-round draft pick. Then he got caught in a scandal. He was innocent, of course, but it took six years to prove it.”
Jae-won could recall many similar cases from his Memory Palace—promising athletes falsely accused in hopes of settlement money. He could probably locate the article about Remington’s friend if he searched.
“I know you will handle it well, but as I get older, I find myself worrying more.”
“Understood.”
Jae-won nodded. He appreciated the concern. Thanks to his previous life, his ability to judge people was already well developed. He could easily discern whether young college students approached him sincerely or with ulterior motives. Ironically, Remington’s warning only heightened Jae-won’s anticipation for a different kind of campus life this time around. In his previous life, he had enrolled too late to truly enjoy university. This time, he would exercise caution where necessary and savor what he could.
That resolve lasted less than twenty-four hours.
When Jae-won arrived at the Electrical Engineering orientation filled with excitement, his expectations shattered instantly. Not a single woman was in sight. Instead, the classroom was packed with the sort of studious, eccentric, bookish types one might expect in any engineering department—except every single one of them was staring at him with intense, burning eyes.
Only then did reality sink in. The department he had chosen—Electrical Engineering—along with Mechanical Engineering, traditionally boasted the highest male-to-female ratios. Jae-won had known this fact, yet he had assumed Stanford would differ from Korea. Remington’s words the previous day had also raised his hopes. Reality, however, proved mercilessly consistent.