Don't Be Evil
“Hello! There are many familiar faces here again today.” Yoo Jae-won greeted the crowd cheerfully as he stepped onto the stage. In fact, many attendees had purchased three-day passes and visited without missing a single day. Thanks to Yoo Jae-won and his executives exceeding expectations by 120 percent, the atmosphere was excellent. From Android ME to the two new services Nextcom had just unveiled under President Henry, the event was filled with remarkable innovations that most companies could never achieve. As a result, the main stage audience welcomed Yoo Jae-won with great enthusiasm, even as they were surprised by his appearance. This reaction would not have occurred if the prepared products and services had been poorly received.
“Some of you with sharp instincts seem to have already guessed why I’ve come up here,” Yoo Jae-won continued, leading the stage with a smile. “That’s right. I’m here to unveil a surprise gift that will thrill gamers around the world.” With that, he held up a box he had brought onstage. It was marked with a large X on the top.
“X is an unknown quantity. It can contain anything and offers excellent expandability. If I had to name something that best represents such an X, I would say the PC.”
Question marks appeared in the audience, which had been expecting a game console. Yoo Jae-won’s sudden mention of PCs was difficult to understand. Though the crowd grew somewhat confused, he paid it no mind and continued.
“The PC is the most powerful and expandable tool humans have ever created. That’s why it receives so much attention from engineers like me. And no one can deny that gaming accounts for a significant portion of the PC’s primary functions.”
The mention of games drew a loud cheer from the audience. Backstage, President Henry, who had been watching Yoo Jae-won’s presentation, gave a wry smile. He and the Nextcom staff had poured nearly three months of effort into the IDDC 99 announcements. While an eight-hour workday was standard, they had been willing to borrow time from the future when necessary. Thanks to that, today’s response had been excellent, and once IDDC 99 ended, he and many employees planned to take vacations. The presentations had been highly satisfying. Yet seeing the response Yoo Jae-won generated left him feeling a slight twinge of envy. The difference in cheers was so vast it was almost embarrassing to compare.
Was it simply because of the items being presented? He could confidently say no. Even if Yoo Jae-won had announced Nextcom’s mobile apps and Answer! Maps instead of a game console, the reaction would have been just as enthusiastic. There was something special about Yoo Jae-won that drew people in. President Henry’s mind wandered briefly, but he soon found himself completely absorbed in the presentation once more.
“However, purchasing a PC just to play games is a considerable burden. While technological advances and mass production have lowered PC prices significantly, they still cost thousands of dollars.” It was an odd statement coming from Yoo Jae-won, whose company ID Technology specialized in high-end PCs. Yet he spoke with confidence. After all, the PCs released by ID Technology never compromised on specifications or design.
“I faced the same dilemma. And I made a decision. I decided to enter the game console market.”
“Wooaaah!” The moment Yoo Jae-won finished speaking, the main stage of the convention center erupted in cheers. It was only natural. ID Group had never once disappointed consumers with its products. Every new product announced at IDDC 99 had received rave reviews, and the same held true for all previously released products and services. Even joint ventures were no exception. The VOD service Timeflix had become so familiar that watching missed programs over the weekend was now commonplace. While competing cable companies were in crisis due to Timeflix’s impact, regular broadcasters with media libraries were rapidly signing content supply contracts with Time Warner Nextcom. Timeflix’s main screen was now stacked with an enormous amount of content, and the speed at which new titles were added was nothing short of terrifying. Moreover, all of it could be watched unlimited for the low price of nine dollars. North Americans had only ever suffered under cable companies that resembled black corporations; they had never experienced such customer-friendly service before. As a result, Time Warner Nextcom’s subscriber numbers were growing rapidly every week.
Interestingly, while competing cable companies were the ones with fires under their feet, video rental stores were also taking a direct hit. The cost of renting three videotapes was enough to subscribe to Timeflix for a month. Furthermore, Timeflix’s digital streaming offered far superior picture and sound quality compared to VHS tapes. Even the latest movies could be viewed in HD. While fully appreciating the quality required special equipment like a Tour Cinema Display rather than a CRT TV, the image was still incomparable to VHS even on a regular computer monitor.
The audience present today was well aware of ID Group’s story. They knew Sony, which had achieved massive success with the PlayStation 1, had cut ties with ID Group during PlayStation 2 development. They also knew this had been a major factor in Yoo Jae-won’s decision to enter the game console business. Naturally, there was great interest in how powerfully Yoo Jae-won would retaliate against Sony’s betrayal.
Yoo Jae-won met those expectations 100 percent.
“The exact form of the console hasn’t been finalized yet. Just like this Xbox I’m holding.” The box marked with an X that he had carried onstage turned out to be an empty cardboard box. Still, it wasn’t meaningless. It was a powerful hint about the console’s name. Xbox. It was the same name as the console once released by Microsoft. The meaning was good, and given the historical context of ID Group acquiring Microsoft, Yoo Jae-won had no hesitation in naming his own console Xbox.
“Instead, I’d like to make a few promises to you all, and I intend to keep them.” As Yoo Jae-won spoke, an image appeared on the main screen. “First, I promise that the Xbox’s price will not exceed 300 dollars at most.” Cheers erupted from the audience once again. The virtue of a game console, as Yoo Jae-won had said, was an affordable price. Yet 300 dollars was far below what gamers had considered reasonable. In truth, the PlayStation 2’s launch price was 299 dollars, and Yoo Jae-won had beaten them to the punch. Naturally, the production cost was much higher—between 400 and 500 dollars—but the company was willing to take a loss to distribute the hardware widely. Sony had made a big show of this price, but Yoo Jae-won had preempted the word “affordable” a full year before the PlayStation 2’s announcement by guaranteeing the price would stay under 300 dollars—with a console that didn’t even exist yet.
“Some of you might worry that such a low price means the specifications will be downgraded. If anyone thinks that, let me state clearly here that you’ve misunderstood me.” Soon after, the Xbox’s targets were listed on the main screen. “The Xbox’s architecture will naturally be very similar to a PC, and it will run a customized version of the Android operating system designed specifically for gaming. Most importantly, I promise it will have the highest performance among next-generation consoles.”
Yoo Jae-won knew the PlayStation 2’s specifications well. There had been much fanfare about adopting a CPU capable of conveying emotion, but in reality it was a custom model of MIPS Technologies’ R5900. Its clock speed was 294 MHz, though thanks to faster semiconductor development, the R5900’s speed had risen to 400 MHz. The version to be installed in the PlayStation might be another 10 percent faster. Yoo Jae-won planned to equip the Xbox with a custom version of AMD’s Athlon X2. Of course, budget constraints meant he couldn’t use the highest-end model as-is. He would have to use the cheapest dual-core model and customize it for gaming. There was a very high chance that defective chips rejected during Athlon X2 production would be recycled. Here, “defective potatoes” referred to chips that failed to meet design specifications due to lithography or other process errors during CPU manufacturing. These were chips with lower clock speeds, insufficient cache, or partially non-functional computation circuits. Such defective chips were usually thought to be discarded, but that rarely happened. They were salvaged through methods like cutting or sealing off the defective portions. Even though the semiconductor business was often compared to shoveling dirt, the operating costs of production facilities were extremely high, so maximizing margins required minimizing wasted chips.
Unfortunately, the Athlon X2 had very low yields. Being a dual-core chip, its die area was significantly larger, which increased the defect rate. While AMD was excited about surpassing Intel in performance, they were struggling with how to handle the increased defects. They had no choice but to revive defective chips for entry-level models when Yoo Jae-won appeared. He selected the Athlon X2 as the Xbox’s CPU and promised to purchase defective chips in bulk—at least ten million units. This number signaled that he envisioned Xbox sales in the tens of millions. AMD had never sold that many units in a single transaction in its history. Naturally, they signed the contract without hesitation. The requirements Yoo Jae-won specified for the custom chip were simple: an 800 MHz dual-core CPU. Since the original Xbox had used Intel’s Pentium 3 733 MHz model, performance would more than double at once. The same applied to the GPU. A custom chip based on NVIDIA’s GeForce 3 would target roughly 40 gigaflops. Through this, Yoo Jae-won aimed for the Xbox to achieve a stable 60 frames per second at HD resolution, with some well-optimized games supporting Full HD as well.
“The media will naturally be DVD. We’ll also include a 10-gigabyte hard disk so save data, bug patches, and service packs run smoothly. Of course, since it comes with a DVD-ROM drive, DVD playback is standard.” Every time Yoo Jae-won spoke, the audience responded with overwhelming enthusiasm. The specifications were clearly impossible to achieve at a 300-dollar budget. It was great news for gamers, so the positive reaction was only natural. Conversely, the faces of competitors who had been glued to the IDDC 99 live stream were turning dark. The problem was that Yoo Jae-won’s speech wasn’t over yet.
“Surely no one thinks this is all? The reason ID Group has reached this point today is because we always prepare one more thing. The Xbox is no different.” As Yoo Jae-won spoke, the word “Live!” appeared on the main screen. “The Xbox will come with a high-performance LAN card as standard.”
“Ooooh!” The audience at IDDC 99 was no ordinary crowd. Many immediately understood what a LAN card implied and cheered. “Past consoles had very weak concepts of multiplayer. It was all about sharing controllers with friends in the same room. Many consoles still haven’t moved beyond that, even though we’re entering the 21st century and the internet is everywhere.”
Multiplayer was the trend. Most games included multiplayer features, and dedicated multiplayer titles were pouring out. From FPS to massive online role-playing games, multiplayer was no longer optional for gamers—it was essential.
“The Xbox, equipped with a LAN card as standard, will support multiplayer from launch.” Since he was directly adapting the Xbox, there was no reason not to inherit the Live multiplayer service. However, Yoo Jae-won had no intention of copying Microsoft’s model exactly. After all, Microsoft had made Xbox multiplayer paid. While running multiplayer servers did cost a significant amount of money, the paid model meant far fewer people enjoyed multiplayer relative to the number of consoles sold. Therefore, Yoo Jae-won chose to split the burden. Every game with multiplayer would offer a three-month free period, after which players who wanted to continue could purchase points. Points would then be deducted based on usage time. There was room for negotiation with game developers or publishers. For games focused on multiplayer, developers or publishers could pay a usage fee on behalf of players, reducing the points deducted by the Live service. There were also achievements. Additionally, Live points purchased by gamers could not only be bought with money but also earned as bonuses by completing in-game missions, which could then be exchanged for Live points.
“Wooaaah!” Even though the only physical item was a single cardboard box marked with an X and everything else had come solely from Yoo Jae-won’s mouth, the reaction was tremendous. Some were even worried there would be nothing left to show at next year’s E3. But of course there would be. By then, actual hardware would be ready, along with games running on the Xbox. In particular, Bungie’s Halo had been earmarked as a simultaneous launch title for the Xbox, and with ID Group’s capital and technical support, it boasted far higher quality than originally planned. Yoo Jae-won’s expectations for the gamers’ enthusiastic response were high. At the same time, today’s announcement was also a powerful pressure on competitors. For example, the Athlon 64 X2 CPU chosen for the Xbox cost well over 350 dollars even for the cheapest model. Even at retail price, the CPU alone exceeded the budget. Adding a next-generation GPU, hard disk, and LAN card would make it an enormous price. Competing with the Xbox on specifications would require massive financial bleeding.
“We’ll show you the actual product at next year’s E3.” With those final words promising to reveal more at E3, Yoo Jae-won concluded the Xbox presentation. The game console segment was over. But IDDC 99 was not yet finished.
—Next, we will present TokTok, the world’s first SNS service. The presenters are Chairman Yoo Jae-won and Gilbert Owen. The finale of IDDC 99 belongs to the still-veiled SNS service, TokTok.