Super Synergy Effect
Beyond the super synergy effect, Electronic Arts brought options that Yoo Jae-won had never imagined. If Electronic Arts’ logo appeared at the start of the game, five thousand dollars. If it came before ID Technology’s, an additional three thousand dollars. Of course, Yoo Jae-won accepted having Electronic Arts’ logo appear first. Gamers were in the habit of skipping past logos the moment they launched a game anyway.
Still, there were plenty of other ways to promote the ID Technology name besides the logo screen. They could place a large advertisement in the lobby that players had to see before a network game began, or display it on in-game billboards. Electronic Arts also offered options beyond gameplay elements.
“The European computer game market is quite developed. Electronic Arts entered early and has achieved strong results there. If you grant us the publishing rights for all of Europe as well, we will pay an additional forty thousand dollars. The revenue split remains sixty-forty, and we will handle the translation into Latin script.”
Europe? That region had never even crossed his mind. Yet if Electronic Arts handled the Latin-script translation, he would receive another forty thousand dollars simply for granting permission. Yoo Jae-won, who had been focused on the speakerphone, turned his gaze toward Choi Kang-wook and Robert Halley. He muted the line so their discussion would not carry over, and they held a brief conference. The conclusion came quickly.
“We will accept on the condition that the contract lists the specific countries rather than using the broad term ‘Europe.’”
“As straightforward as ever!”
Straightforward? He was simply grateful. Europe had always been outside Yoo Jae-won’s reach. There was no reason to refuse when someone else offered to conquer it for him. Still, he did not accept every option Electronic Arts proposed. They had also reached for publishing and film rights. He could not imagine what a software distributor intended to do with those, and since legitimate publishers were already in contact, he rejected the clause outright.
Finally, having offered so many attractive options, Electronic Arts added a penalty clause should they fail to fulfill them: twice the advance would have to be repaid. If the money was unavailable, they would accept equity in ID Technology instead. For a moment Yoo Jae-won wondered whether Electronic Arts was being overly generous. Clearly the “DNA of greed” remark had not been made lightly. Even so, he felt no displeasure. Electronic Arts’ current reputation was better than it would become in the twenty-first century. President Hawkins’ specialty was acquiring or supporting promising software companies and turning them into creators of innovative, entertaining games. Titles that transcended their era—Papyrus, Wasteland, Bard’s Tale—had all emerged thanks to Electronic Arts. These options were being offered because of their high regard for ID Technology, yet Yoo Jae-won was not an easy mark. ID Technology’s soundness exceeded what President Hawkins imagined, and completing the game before December 10 was no difficult task for him. The penalty would never be triggered.
“Is it our turn now?”
After all, Electronic Arts was not the only party who could propose options.
“From what I can see, Electronic Arts appears to be projecting sales of Keyboard Warrior between two hundred fifty and three hundred thousand units.”
President Hawkins, listening intently via speakerphone in California, flinched.
“That is correct.”
Having already secured the important clauses among the options they had brought, President Hawkins had begun to relax—only to feel tension surge back as Yoo Jae-won accurately named their projected sales figures. He worried what the other man might say next. The two-hundred-fifty-to-three-hundred-thousand-unit range had been derived from extensive statistical analysis. Yet the other side had pinpointed it in a single stroke. The man represented a small software company in a minor country called Korea; it was impossible to imagine that company’s information-gathering capability rivaling Electronic Arts’ nationwide distribution network. That meant there had to be something special at work, though Hawkins could not begin to guess what it was. In a negotiation, nothing created more tension than one side knowing what the other did not.
Yoo Jae-won, however, possessed no special information channel. He had simply inferred the numbers from his past-life experience. The hint lay in the advance and options Electronic Arts had offered. Adding up every option presented so far brought Keyboard Warrior’s price tag close to one hundred sixty thousand dollars. That was apparently the maximum bet Electronic Arts had prepared. If so, one only had to calculate how many thirty-dollar packages they would need to sell in order to pay Yoo Jae-won one hundred sixty thousand dollars and still turn a profit.
“What I wish to point out is that predicting Keyboard Warrior will sell only around three hundred thousand copies is not merely conservative—it is stingy.”
Everyone in the Seoul office and the Remington team in California inwardly clicked their tongues. Three hundred thousand units was an enormous number even by American standards, let alone Korean ones. Yet Yoo Jae-won called it too low, and they were all astonished. President Hawkins of Electronic Arts was no exception; he shook his head in disbelief. Still, the figure fell far short of what Yoo Jae-won knew to be possible. Nintendo’s video-game consoles sold millions of units during the Christmas season in this country. Super Mario alone had already sold millions. The number of 286-class computers and higher already exceeded several million. There was no reason Keyboard Warrior could not become the next Super Mario.
President Hawkins hurried to object. Game consoles and computers were fundamentally different products. Computers were general-purpose machines; consoles existed solely for games. The price gap was also vast. Applying Nintendo’s case to Keyboard Warrior was an overreach, the words already rising in his throat. But Yoo Jae-won spoke first.
“The three-hundred-thousand figure clearly factors in losses from piracy, does it not?”
President Hawkins, now able to offer a measured reply, began his explanation.
“Exactly! Copying cartridges requires specialized equipment available only to certain operators, and the raw cost of semiconductor ROMs is so high that even decent sales yield little profit. Computer programs, on the other hand, use inexpensive diskettes and are trivially easy to duplicate. The moment an AAA title like Keyboard Warrior hits the market, pirated copies flood in. Electronic Arts can overcome that obstacle through our dense distribution network and aggressive advertising and still sell three hundred thousand units.”
As President Hawkins said, America was not free of piracy. The better the computing environment, the more opportunities for illegal copying. Yet because the United States was so large and affluent, enough people still bought legitimate copies for the software industry to post strong annual growth. Even if they chose another distributor such as Activision or ByteBix instead of Electronic Arts, sales around two hundred fifty thousand units were still achievable.
Yoo Jae-won had no intention of letting this opportunity end as a merely decent result. If Electronic Arts’ limit was three hundred thousand, he would push the number higher himself.
“What if—purely hypothetically—we could apply the latest protection technology to Keyboard Warrior and successfully block piracy for more than a year? What then?”
“Pardon? What do you mean?”
The copy-protection program had originally been slated for release in the early nineties as a secret weapon. Yet the opportunity that had unexpectedly appeared was far larger than anticipated. There was no longer any reason to hoard it simply to stick to an old timetable.
“I have developed copy-protection technology of my own. Once applied, I am confident it will remain unbroken for at least a year—possibly several.”
“Are you certain it is reliable?”
“ID Technology never lies about its technology. You will be able to verify that for yourselves on December 10 anyway. Ah, I have an even better idea. Let us make a wager. If Electronic Arts’ technical team succeeds in cracking the protection, I will pay you ten thousand dollars. If they fail, you raise the revenue split to fifty-fifty and apply ID Technology’s protection to every game Electronic Arts releases. Since this is a partnership, we will charge only ten percent per package—an act of goodwill.”
Electronic Arts’ revenue last year had been sixteen million dollars, or so he had heard. The conscientious Yoo Jae-won was willing to accept a mere ten percent of sales as the protection-service fee. President Hawkins would doubtless call him a highway robber, yet he would never refuse. The revenue lost to piracy was enormous. Eliminating piracy would increase sales, and the gain would far exceed the cost of the protection service. A greedy man like President Hawkins would never turn down such a deal—provided, of course, that the protection technology proved genuinely reliable. For Yoo Jae-won, that reliability had already been proven.
“Call?”
At Yoo Jae-won’s question, President Hawkins fell silent for a moment. Just as the silence began to stretch, his greed stirred. If the technical team cracked the protection, they would receive a ten-thousand-dollar bonus. If they succeeded in protecting the game? There was nothing better for a software company. A sliver of doubt lingered—could such technology truly exist?—but either outcome was advantageous.
“Call!”
President Hawkins’ single short word had never sounded so welcome. Yoo Jae-won, along with Choi Kang-wook and Robert Halley who sat with him, clenched their fists in triumph.
The contract signed with Electronic Arts that day entitled ID Technology to an advance of one hundred seventy-five thousand dollars, options included. How much they would receive at the first settlement in March of the following year was impossible to predict, yet one thing was certain: the sum would easily surpass every amount they had ever extracted from Korea’s chaebols. Even so, the thirst remained unquenched. In business, Yoo Jae-won was always thirsty.