Chapter 44
Chapter 44
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Translator: Silver Dragon
Chapter: 44
Chapter Title: Mergers and Acquisitions
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‘Two years. I still have obligations to the disciples I must teach at university and reviewing the theses for the undergrads in my lab—those are duties I can’t just abandon.’
Those were the words Professor Jonathan had left me with as we parted.
I had no intention of going back on our bet since we’d made a promise, but when he asked for time to wrap up his current responsibilities, I gladly accepted.
‘Even if he came right now, there wouldn’t be any real way to utilize his skills anyway.’
Professor Jonathan’s true expertise lay in AI deep learning, and I’d planned to put him in charge of that field from the start of our wager.
But since we hadn’t even laid the groundwork yet, it wouldn’t make sense to leave him high and dry on his own. His request for two years was actually perfect timing.
We needed that time to build a foundation where he could truly shine over the next two years.
“Since the expo, we’ve had 142 companies inquiring about licensing our physics engine.”
“That’s fewer than I expected.”
“It’s just the U.S. for now. And as you know, only companies of a certain size can really make proper use of a physics engine yet.”
142 companies.
It seemed like a big number at first glance, but once the true value of the physics engine became clear, it wouldn’t be long before two more zeros were tacked on.
“We’ll probably need a dedicated department to manage this physics engine soon, too.”
Scarlett said it with an incredulous tone, but she couldn’t hide her smile—her lips were curved up wide.
‘That’s what they’re calling the devil’s smile these days, huh?’
Scarlett’s default expression was usually blank, but she never hid her grin when it came to money—or more precisely, the company’s growth.
A few days ago, I’d heard from Senior Jane that employees who saw that smile were genuinely terrified, dubbing it the ‘devil’s smile.’
‘Oh! She flashes that same smile not just for good company news, but whenever she gets a chance to roast Team Leader Jason.’
Whether it was Scarlett who was odd or Jason who was odd, I couldn’t say.
“You’re getting ready for it, right?”
“Of course.”
What Scarlett showed me now was a hefty planning document.
[Proposal for Savior Group Separation and Mergers & Acquisitions]
“We’ll need to set up a president’s office soon. It’s too open here—even for important talks, we have to wait until everyone’s gone home.”
“I’ll consider it. Though honestly, this setup is more convenient for development.”
The planning document Scarlett handed me was so critical that we could only review it after all the employees had clocked out.
It was still too early to let word spread among the staff, so we had no choice but to meet one-on-one after hours.
“Savior has grown too big now.”
From the very first page of the proposal, Scarlett laid out the problems with Savior’s current structure.
“Byte Office alone raked in a staggering $300 million in revenue over the past year.”
An astonishing figure.
Even if you added up all the revenue from the games Savior had sold so far, it wouldn’t come close to half that amount.
‘This really drives home why it’s so hard to become a global conglomerate just by selling games.’
Byte Office had sold 4 million copies in its first year, boosted by a pile of lucky breaks right after launch.
“If we hadn’t split profits with Microsoft, it would’ve been close to $500 million. But the key point is, we’re already a solid mid-tier company with just Byte Office.”
Of course, Savior didn’t have its own factories or distribution network yet, so we needed partners to sell.
And that partner was none other than Microsoft.
—If you give us exclusive distribution rights for Byte Office, we’ll give you 3 million shares of Microsoft stock in return.
Exclusive rights obtained in exchange for 3 million shares of Microsoft—the most valuable IT company in America at the time.
It was essentially a proposal for strategic collaboration between Savior and them.
Just as we’d dominated the office suite market thanks to government policies, Microsoft had conquered the OS market. They knew the synergy of combining forces would be massive.
‘They probably planned to monopolize it themselves originally.’
But it was good for us, so we’d agreed without objection.
“On top of that, the physics engine we just announced—and the graphics engine we’re about to unveil—will eventually generate revenue that rivals Byte Office.”
“Whew... Hearing it laid out like this really makes it sink in.”
Byte Office.
Game engines.
We’d created programs that could each form the backbone of massive corporations over time—and Savior, a game developer that had only just reached mid-tier status, held them all. It was nothing short of a miracle.
“Now it’s time to bulk up by hunting other companies.”
“Did you look into the ones on that list I gave you before?”
“Of course. They’re attached to the report.”
At Scarlett’s words, I flipped through the proposal in my hands to find the relevant section.
『Estimated acquisition cost for NexGen: $100-150 million. 3Dfx demanding $250 million.
NexGen is developing high-performance x86-compatible CPU designs and has achieved some success. 3Dfx dominates the existing 2D graphics chipset market but is struggling against Nvidia in the emerging 3D graphics chipset space.』
“Acquiring both would mean shelling out at least $400 million total.”
“Honestly, even with 3Dfx’s recent slump, they still own the 2D graphics chipset market and generate steady revenue. I’d support acquiring them.”
“What about NexGen?”
“Intel’s wall is too high. $150 million is no joke just betting on future potential.”
Scarlett’s assessment was brutally realistic for the current moment.
‘If we had cash to burn, we’d buy Intel outright.’
And Nvidia, which was in the same top-tier league as Intel among available targets, wasn’t even publicly traded yet.
Sure, we could invest in a private company ahead of time, so I’d gone straight to Nvidia’s HQ to propose investment—and even hinted at acquisition.
‘Nvidia has no intention of being acquired by another company. As for investment, we already have backers, so we’re not short on capital. We must politely decline.’
Even knowing the future, if the seller says no, there’s nothing you can do.
So, we’d settled on pheasant substitutes: NexGen and 3Dfx.
Both would eventually be acquired by AMD and Nvidia, respectively.
‘Back then, no one knew those deals would elevate them to global giants. Especially not that Nvidia would become the world’s most valuable company.’
Those acquisitions were hailed as some of the greatest in history, so we had to snap them up now that the chance was here.
“Okay, got it. I’ve never lost money following your lead, Scarlett, so we’ll start negotiations with both soon.”
“Thanks, Scarlett.”
“But even if we snag them safely, we don’t have anywhere to manufacture, right?”
“That’s why we’re acquiring UMC too.”
Scarlett smacked her forehead in disbelief at my words.
UMC was a major Taiwanese foundry, second to TSMC but still sizable.
“Huck, do you know UMC’s valuation? Even conservatively, as a Taiwanese firm, it’s $1 billion! We’d empty our coffers and still fall short.”
“Not right now, of course. We’ll go fabless—handle design ourselves and partner with UMC for foundry services and contract manufacturing.”
“I definitely think that’s the way to go. Doing everything in-house like Intel, from design to fab, is inefficient.”
Fabless.
Companies that handled design and R&D but outsourced 100% of manufacturing to foundries.
This fabless model, which would become standard in the future, wasn’t widespread in the ‘90s yet.
A prime example of not going fabless was Intel, which insisted on controlling design, manufacturing, and foundry all itself.
And that was a big reason why Intel tumbled from its monopoly in the future.
Foundries required massive periodic investments in production equipment, and the costs were enormous.
Intel’s integrated approach made it hard to adapt, clinging to old setups past their prime, eventually dropping from industry leader to number two.
“We’ll need to ramp up hiring way beyond what we’ve done before. Total headcount will easily top 1,000—are you sure about this?”
“We have to. Though if we add another zero after that, the company finances might be at risk.”
Scarlett replied as if she’d already steeled herself for it.
“Then we’ll proceed with splitting Savior into five subsidiaries as outlined: Savior Games, Savior Engines, Savior Office, Savior Tech, and so on.”
“Guess it’s time to say goodbye to this building.”
“Yeah. I’ve only been here a little over two years, but I’m already attached. Still, it’s way too small now.”
This building—where I’d burst out of college to start my first company.
Three years wasn’t long, but it wasn’t short either, and somehow, it had grown on me.
‘For Jason, it’s basically home.’
Jason was making good money now and could easily afford a place nearby, but he still lived and slept at the office.
“There’s a large office building nearby up for auction. Expected price is $70 million. I recommend buying it.”
“I’ll trust your judgment on that, Scarlett.”
The fact that Savior—once just me and Jackson bickering over game development—had outgrown everything but a massive office tower stirred some strange emotions.
“Next year, we launch new games and list on the New York Stock Exchange, Scarlett.”
“I haven’t forgotten. That’s why we’re building out finance and legal teams right now.”
“I know it’s tight, but it’s something we have to do. Please make it happen.”
New York Stock Exchange.
The world’s top financial market, the dream listing destination for every company.
Savior had to complete its NYSE listing by 1997.
“We’re Savior—we could take our time, and companies would still beg us to list later. Why the rush?”
I’d already told Scarlett about the listing plans since she handled finances, but not the reason, so she still seemed puzzled.
And she was right—Savior’s position meant we could list anytime without issue.
Except...
‘Savior’s fine. But with the event hitting in ‘97, we’ll need that listing capital.’
I couldn’t tell Scarlett yet, so I just smiled it off. But post-listing, Savior would get even busier than expected.
IMF.
Soon, I’d have to head to Korea, where the 20th century’s worst crisis was about to explode.