Android's Golden Milestone
Tzar reported that as of yesterday's closing price, Android's stock stood at $89.80. With one billion shares outstanding, that put the company's total market capitalization at $89.8 billion. The presidents reacted as though they were hearing the number for the first time. Some were genuinely too busy with their own divisions to have checked the price, while others had known but chose to play along with the surprise. Yoo Jae-won did not bother to sort out who was who. Android's explosive stock performance was good news for him as well.
Android had debuted on Nasdaq at $25 per share, a $25 billion market cap. After listing it climbed steadily, nearly touching $60 billion before the IT bubble burst pushed it back down into the mid-$30 billion range. Unlike many other IT firms, however, Android proved it carried no bubble. PC shipments had softened, yet sales of the Android operating system continued to rise, and the company maintained overwhelming dominance in the server market. Traditional powerhouses such as IBM and Microsystems struggled to keep pace with cloud servers. Industry analysts were already saying that Android Enterprise had conquered the server market as well.
Linux's rapid advance had also hurt the big players. Its complexity and the need for manual configuration were drawbacks, but its power and, above all, its price—free—made it irresistible to small businesses and individuals. In theory, Linux's growth could have hurt Android, yet the most popular Linux distribution turned out to be Mint Choco, a subsidiary of Android itself. Mint Choco offered a graphical interface rivaling Android's own, flawless font support, and an easy packaging system for installing and removing applications, all while retaining Linux's legendary customizability. For small internet businesses that found Android Enterprise too expensive, it was the perfect solution.
Android's professional software suites had also grown strong enough to threaten long-established market leaders. When first released they had offered only basic functions, but successive version upgrades had brought them to parity with programs costing hundreds of thousands or even millions of dollars. All of these factors had combined to build the golden tower of $89.80 per share.
Market observers believed that, barring any major surprises in 1999, Android would become the first IT company to surpass a $100 billion market cap. Yoo Jae-won, however, allowed no complacency. While the market assumed continued smooth sailing, he and Android were fully committed to the next version of the operating system.
"Preparations for the tentatively named Android 2000 are complete," Kevin Johnson, President of Android, reported. He used the word "tentative" because the final name had not yet been decided. The previous version had been 98, so 2000 seemed natural, yet too ordinary. The next Android would incorporate technologies on an entirely different level from 98. Security, usability, and interface would all be transformed for the twenty-first century, but the true trump cards were enhanced 3D capabilities and full support for the HD era.
Many beta testers had raised eyebrows when they first heard the 3D concept. After all, 3D was already considered a mature technology. Yoo Jae-won knew better. Current 3D was still in its infancy. Android's GlideX library already contained shader technology from the future, but no VGA cards yet supported it properly. GPUs were required, and they would take time. Video-card manufacturers were preparing products to match the next Android, and Yoo Jae-won had ensured the software side would fully exploit those GPUs. When everything worked as designed, dynamic lighting and shadows, reflections on glass and water, and a host of deformation effects would become possible, delivering far more realistic imagery. The next Android would also add a 3D sound library, automatically calculating tunnel echoes and terrain-based reverberation to heighten immersion. Even older sound cards would be able to experience 3D audio, though cards with dedicated 3D acceleration would reduce CPU load and improve quality.
The second trump card, HD, was a keyword that encompassed games, video, and the desktop environment alike. Because of this, many had suggested naming the version 2000, NT, XP, or New Millennium. There was still plenty of time to decide.
"How are preparations for the HD era progressing?" Yoo Jae-won asked.
"Monitor manufacturers remain the bottleneck, but every other sector is on track," Kevin Johnson replied.
"Of course. Re-tooling production lines cannot happen overnight. The critical piece is games. How is the industry reacting?"
"I can answer that," said Stephan Barber, President of ID Entertainment, raising his hand. Games fell squarely under his purview.
"All development studios under ID Entertainment are preparing HD-resolution support. However, partner companies and other developers are moving slowly. They cite the fact that monitors supporting 16:9 HD resolution have less than a three-percent market share."
Stephan Barber reported the facts without exaggeration. Yoo Jae-won showed no change in expression. He understood the other developers' position. Supporting HD was not simply a matter of adding one resolution option. Textures had to be upgraded, more objects had to appear on screen than in 4:3, and optimization levels had to rise accordingly. All of that increased development costs. Still, the future belonged to HD; that fact was undeniable.
The True Cinema Display unveiled the previous year had sent shockwaves through the market. At any awards ceremony related to displays, it would have swept every category. A 16:9 full-HD LCD monitor was in a completely different league from the old bulky CRTs. When paired with Timeflix, the true value of full-HD movies became unmistakable. The word "cinema" in the name was no exaggeration. The only disappointment was games. Few titles supported full HD, and current VGA technology could not fully accelerate it. The only solution was an expensive graphics card with SLI, meaning thousands of dollars just to play one game. That was why Yoo Jae-won had chosen standard HD—720p—rather than full HD as the baseline for the next Android. The latest GPUs expected at the end of 1999 or early 2000 could handle that resolution comfortably.
HD monitor penetration was still low, but Yoo Jae-won expected the transition to happen rapidly. HD broadcasting was already in preparation, and Korea was planning a pilot broadcast in the Seoul metropolitan area timed with the 2002 World Cup. Naturally, HD televisions and monitors would be required, and every appliance manufacturer was rushing to meet the demand. Today only a handful of expensive HD monitors existed, but within a single year high-quality, affordable models would flood the market.
"If the reaction is lukewarm, there is nothing we can do about it. ID Entertainment, however, must give its absolute best."
"Of course," Stephan Barber answered firmly.
Although the conversation had drifted toward games at the end, the applause for Android's performance was still louder than anything ID Investment had received. Kevin Johnson's previously tense face finally relaxed into a smile as Yoo Jae-won and the other presidents clapped.
"It is lunchtime. I have reserved a restaurant. Let us go eat."
At Yoo Jae-won's words everyone rose. Naturally, he was treating the entire group. Not a single president considered declining.
The 1998 settlement meeting continued after lunch. The first presenter in the afternoon was Stephan Barber of ID Entertainment. The positive atmosphere from the morning carried over. Games were a recession-resistant sector; even though the IT bubble collapse had contracted the overall market, package sales had not dropped significantly. Moreover, the expansion into China through Tencent had exceeded expectations.
"Sales of the Warcraft compilation and StarCraft surpassed projections. It seems that for a market like China, CD-key authenticated multiplayer is the correct approach," Stephan Barber assessed. Yoo Jae-won agreed. Counterfeiters in China copied even the packaging itself. After the introduction of hologram technology, every genuine ID Group software disc carried a hologram for easy verification, but before that the fakes had been indistinguishable. Therefore, when Tencent proposed official distribution, expectations had been mixed with concern. The results, however, had been better than hoped. The Warcraft 1 and 2 compilation had already sold over three million units. StarCraft had sold one million, pushing Battle.net servers to the breaking point. Hosting authentication servers in Korea so that multiplayer required a legitimate key had proven highly effective. Localizing into both Mandarin and Cantonese had also boosted sales.
Stephan Barber's analysis was sharp, yet he had overlooked one factor: PC bangs. The PC-rental business that had begun in America as net cafés had exploded in Korea. Many people who lost their jobs during the IMF crisis had used their severance to start small businesses, and a large number chose PC bangs. Unlike restaurants, which required constant management, a PC bang was relatively easy to run once the equipment was in place. With internet multiplayer becoming mainstream and games properly supporting team matches, the synergy was enormous. StarCraft had been the flagship product that popularized PC bangs in Korea. The Starleague had established e-sports as a structured industry, and PC bangs had expanded its base. The arrival of full-scale MMORPGs had drawn even more people. The trend was now so strong that people were already saying too many PC bangs were opening. That same phenomenon was now reaching China. At least two-thirds of the games sold this time had likely been purchased by PC bangs. Given China's vast land and population, the scale of Chinese PC bangs was enormous. Tencent's ambitious claim of ten million units sold might well be achievable within one or two years.
"What is the status of online-game development?" Yoo Jae-won asked.
The massive project to bring the world of Warcraft online had brought Blizzard and Origin Systems together, and even that had not been enough; other studios under ID Entertainment were now assisting as well.
"We are past the fifty-percent mark. The continent of Kalimdor is complete, and work on the Eastern Kingdoms has begun. We have been told that a launch is possible as early as early 2000, or at the latest 2001."
Early 2000? Yoo Jae-won did not believe Stephan Barber's confident prediction. Blizzard Entertainment treated development delays and postponed launches as routine. The game would certainly launch faster than in his previous life, but a 2000 release was unrealistic.
"And ID Software?"
"Doom 3 development is proceeding smoothly. We have already warned that it will be a very high-spec game. The goal is to create a title of ultimate polish that drives adoption of the next-generation platform."
After the release of Quake, ID Software had paused to catch its breath, but the team had not been idle. The ID Tech Engine, refined from Doom through Quake, had become the de facto standard for 3D game development alongside GlideX. Although Unreal Engine from Epic was closing the gap aggressively, ID Tech Engine still held overwhelming market share. As a result, ID Software had generated substantial revenue even without a new title since the year before last. Yet John and Romero never forgot that they were game developers. The project chosen as their next title was the latest installment of Doom, the franchise that had put ID Software on the map. This time it would be a standalone game. The two pillars of ID Software had agreed to pour every ounce of accumulated know-how into Doom 3. Yoo Jae-won could not predict how overwhelmingly impressive the result would be, and his expectations were correspondingly high.
Stephan Barber's presentation continued. It covered film investments, the acquisition of the Ssangbangwool professional baseball team, the establishment of an e-sports team, the creation of the entertainment agency Dream Entertainment, reports on film and drama adaptations of Million Dollar Challenge-winning works, and even the theme park and resort being built on Jeju Island—all businesses under ID Entertainment's umbrella. Yoo Jae-won had funneled every content-related project to ID Entertainment. Fortunately, Stephan Barber possessed a genuine understanding of cultural content and could demonstrate expertise beyond games and films.
After ID Entertainment, performance reports continued until evening. ID High Tech Research Institute and the ID Foundation also presented. The final flourish was delivered by Time Warner Nextcom. Yoo Jae-won listened to the presidents' reports, took notes, and asked questions. At the same time, in one corner of his mind he was naturally evaluating the value of each affiliate. Listed companies were assessed by market capitalization; unlisted ones by assets and revenue. The figures combined effortlessly in his head, allowing him to gauge the overall scale of ID Group.
"Wow."
The exclamation escaped Yoo Jae-won's lips of its own accord. The sheer size of the number that had appeared in his mind was staggering.