The Upper Hand
Super synergy effects in negotiation power might seem like a complex interplay of many factors at first glance. The scale of the business, the financial resources one can mobilize, the skill of the negotiator, and so on. That was precisely why governments and corporations facing major negotiations stayed up all night, agonizing over strategies and crafting their approaches. Yet there was also a simple way to calculate negotiation power. It came down to determining who at the table wanted the deal the most. Whether it was money or goods, the side that desired what the other possessed would inevitably find itself being led around. That was why the foundation of any negotiation strategy began with concealing one's own desperation. Having alternatives made things easy. If the other party pushed too hard, one could simply walk away and pursue the substitute instead.
In that regard, Electronic Arts had no choice but to enter the negotiation room already at a disadvantage to ID Technology. Moreover, that fact was already known to the key figures involved—Yoo Jae-won, Choi Kang-wook, and Remington Sting. After all, Keyboard Warrior had become a megaton hit, influential enough to affect voter turnout in the U.S. presidential election. Of course, only Yoo Jae-won knew about the voter turnout angle, but other metrics had already made ID Technology's superior position clear. The CompuServe download board was posting unprecedented numbers, and the weekly best-seller ranking had been secured at number one early on. Not content with that, Remington Sting had personally visited computer labs at prestigious universities in California to confirm the game's popularity. He had even taken photographs, just in case they proved useful during negotiations. That was why the ID Technology representatives entered the meeting room with bright expressions.
The composition of the negotiating teams was interesting. Physically, they faced each other in the conference room of Ellen Schmitt's law office in California. Remington Sting, who had brought Ellen Schmitt into ID Technology's orbit, was naturally present as well. That made two ID Technology employees sitting across from Electronic Arts. On the EA side, President Trip Hawkins had arrived with three staff members. Originally, the vice president was supposed to attend, but the somewhat impatient Hawkins had decided to lead the team himself so he could respond immediately to whatever came up during the talks. At 2:4, it looked as though ID Technology was outnumbered, but that was not the case. A speakerphone connected them to the Seoul office, where Yoo Jae-won, Choi Kang-wook, and Robert Halley were waiting. By simple count, ID Technology now held the numerical edge. Electronic Arts was already aware of this arrangement; the fact that Keyboard Warrior's developer was based in Korea and that they were dealing with a representative had been disclosed from the beginning.
“I didn't expect President Hawkins to come in person.”
Remington Sting spoke first, demonstrating that ID Technology held the initiative at the table.
“Haha, if other companies had also become candidates, it would have been the same. Of course, Electronic Arts has no intention of yielding this seat to them.”
President Hawkins made his ambition clear: he intended to close the deal today. Remington welcomed that ambition. The more eager EA was, the more generously they would open their wallets, which naturally meant larger shares for himself and his friend.
“Haaam.”
Yoo Jae-won, waiting for the negotiation to begin, could not suppress a yawn. It was unavoidable; conversations with the United States required enduring the time difference. The meeting with Electronic Arts had been set for 3 p.m. Friday California time, which meant 8 a.m. Saturday in Korea. But because a preliminary coordination call with Remington's team had been necessary beforehand, the actual start time had been pushed back to around 6 a.m. Waking up early was difficult at his age, especially since it meant skipping school. At least it was fortunate that only morning classes were scheduled on Saturdays.
Choi Kang-wook and Robert Halley had also come into the office at dawn and were sitting with tense expressions. Today's meeting was a high-stakes negotiation involving tens or even hundreds of millions of won, so they could not make decisions alone and had brought the legal team along. Fortunately, once Remington's team connected, the tension eased as they exchanged various remarks. The terms Electronic Arts had offered to become the primary distributor were exceptionally favorable. There were a few clauses that needed to be rejected, but the rest were the kind that would pour money into ID Technology.
“Do you really understand everything Americans say in English?”
“Of course. We already confirmed it earlier. Mr. Robert even vouched for it.”
“Hamo, I checked it thoroughly myself! Our young president is a foreign-language genius, after all!”
Choi Kang-wook and international lawyer Robert Halley sat across from Yoo Jae-won. Robert Halley was exactly as he had been in his previous life. His trademark heavy Gyeongsang dialect was nearly at Busan-native level. The only difference from memory was that the Robert Halley who appeared on television had been a somewhat scatterbrained middle-aged man, whereas this younger version was strikingly handsome. A small commotion had arisen when Yoo Jae-won's English proficiency came to light. During conversations with Choi Kang-wook and Robert Halley, Korean alone had sufficed. But during the preliminary meeting with Remington's team, his fluent English had been revealed. The sight of him conversing adeptly with Remington Sting and Ellen Schmitt using specialized business terminology had been beyond what Choi Kang-wook or Robert Halley had imagined. Choi had assumed Robert would handle interpretation. Yoo Jae-won offered no elaborate excuses. Instead, he delivered an even greater shock by demonstrating the other foreign languages he had mastered in his previous life—Japanese, Chinese, French, and more. Rather than accumulating lies through excuses, he had chosen to present himself as a prodigy who excelled at both computers and languages. The strategy worked perfectly. The successive shocks led Choi Kang-wook to simply accept it, and Robert Halley readily acknowledged Yoo Jae-won as a genius.
Soon it was 8 a.m. Seoul time, 2 p.m. in California.
“It’s time. Let’s begin.”
The negotiation started.
“Shall we review Electronic Arts’ terms first?”
At Yoo Jae-won’s words through the speaker, Remington Sting moved straight to the main topic. President Hawkins signaled his staff member seated beside him with a glance. The EA employee retrieved a document and began reading the key points.
“This is Electronic Arts’ proposal. Of course, this is only the basic offer. We have brought many additional incentives, so please listen to the end.”
An upfront payment of $100,000. The retail price of the package was set high at $29.99, with a 60:40 revenue split favoring ID Technology at 40 percent. Settlements would be deposited at the end of each quarter. All costs related to distribution would be borne by Electronic Arts, as would advertising. With each basic condition read aloud, cheers erupted in the Seoul office. The current exchange rate was 700 won to the dollar and still falling; economic reports frequently warned that it would soon enter the 690-won range. Even with the declining rate, $100,000 translated to a substantial 70 million won. Moreover, the 60:40 split meant ID Technology would receive a full $12 per package. The 21st-century standard was 70:30, with the content creator receiving 70 percent. By comparison, 40 percent seemed low, but that 70:30 ratio had only become standard once internet distribution dominated. In the late 1980s, the very concept of internet distribution did not exist. The internet was still primarily for academic use at universities and research institutes; for ordinary people, PC communication services were far more accessible. Even then, PC communication users represented only a fraction of all computer owners. To reach offline users as well, physical packages had to be produced and distributed to retailers across the entire United States. The costs of manufacturing, distributing, and marketing those packages were all borne by Electronic Arts. After subtracting those operating expenses, their net profit from the 60 percent share would clearly be less than what Yoo Jae-won received. In contrast, ID Technology would receive $100,000 upfront simply for delivering the original, plus quarterly settlements thereafter. Among all distributors, this was the most powerful contract available. They could have accepted it immediately, but President Hawkins’ skill did not end there. There were options.
“Even if you reject all the options we’ve brought, we will be fine. However, we would appreciate it if you considered them seriously for the mutual benefit of both parties.”
If the complete version was finished and delivered before December 10, an additional $5,000 would be added to the upfront payment. The reason was that December 10 was the deadline needed to meet Christmas, America’s biggest holiday and shopping event. If the December 10 completion also included the network features mentioned in the preview version, another $5,000 would be added. The tradition Electronic Arts would later pioneer with The Sims—monetizing DLC—had evidently not fallen from the sky. Fortunately, ID Technology stood to benefit from these options as the stronger party. The complete version, which would include additional stages and network modes, was already nearly finished. When creating the American version of Keyboard Warrior, Yoo Jae-won had modularized various functions with future expansion in mind. The most critical element—text and dialogue attached to the zombies—had been separated into a single text file. Once Korea’s computing environment improved, translating only that file would allow an immediate Korean release. He had also created as many shared resources as possible. Adding only the unique graphics and sound resources needed for each stage’s performance would allow entirely new stages to be built by simply adjusting the script. Half of the resource creation work was already complete. Yoo Jae-won’s work speed was unmatched.
“Call! No problem.”
With a single simple answer, he secured an additional $10,000. Yoo Jae-won could only feel grateful to President Hawkins for offering options that played to his strengths.