Purple Games, Part 2
Charles was just about to turn him down when the young man added one more thing.
“The $1 million is strictly for acquiring your equity. To keep development moving smoothly, I’ll also provide another $1 million for development costs. If that isn’t enough, I’m considering additional investment as well.”
At that, Charles and Ken’s eyes nearly popped out of their heads.
“R-really?”
The truth was, their lack of manpower had always been the thing holding them back. If they only had enough people, development could move much faster.
“In my opinion, you should scale the project up a bit more. Block Valley is all about strong freedom. Maybe you could even use the various tools inside the game to build other games and play them with your friends. Wouldn’t that let you expand the game world endlessly?”
Charles stared at him in shock.
Build a game inside a game?
It was something he had never even considered.
A sandbox game let you create anything inside it. Terrain, of course, but also NPCs like monsters and characters.
That meant there was no law saying you couldn’t use those tools to make an entirely new game.
A game within a game…
At any rate, at this point, surrendering fifty percent of the game’s equity no longer felt like a waste.
Charles and Ken were both trying hard to hide their excitement when the other man added, “There are two conditions attached to this.”
So there is a catch.
Charles asked, “What are they?”
“First, if you sell any more equity later on, Continue Capital must have the right of first negotiation.”
“And the second?”
“I’d like exclusive publishing rights.”
That left the two of them flustered.
Game companies were broadly divided into developers and publishers.
Developers made the game and finished it, while publishers handled selling that finished game to consumers.
Larger game companies often handled publishing themselves, but smaller studios usually outsourced distribution to a publisher.
Even when a company ran its own service domestically, it was common to entrust overseas expansion to a local publisher because of translation, localization, regulation, and server management issues.
Publishers handled not only sales, but operations, translation, promotion, events, and server management, and they sometimes even provided funding during development.
Advances in digital distribution had opened a path to direct service without going through a publisher, but for a bigger hit, the publisher’s role still mattered.
The same game could generate wildly different results depending on which publisher handled it. Even a great game could fail if it ended up with the wrong one.
Charles asked, “Does Continue Capital even have a company that can publish games?”
“Not right now.”
He exploded in disbelief. “What does that mean? You don’t even have the ability to publish, and you want the rights anyway?”
Han Miru replied calmly, “Take it easy. We don’t have one now, but we will later.”
“What?”
“If, by the time the game is finished, we judge that we haven’t secured a worldwide distribution network, then you’re free to break the publishing contract.”
“You mean that?”
“Yes. If I’m investing $2 million and you can’t publish properly so the game doesn’t sell, then I lose money too.”
Charles and Ken exchanged a glance.
“Could we discuss this privately for a moment?”
“Of course.”
The two of them stepped outside together and called Rufus, who was still back in the studio, to explain the situation. When he heard the story, he got excited and said:
Hearing that, I couldn’t exactly deny that I was getting hungry.
With their colleague’s blessing in hand, Charles returned to his seat and said, “All right. We’ll do it.”
“You’ve made the right decision.”
David pulled out the contract he had prepared in advance.
Charles, acting as representative, carefully reviewed the document, but there didn’t seem to be anything particularly problematic in it. The two of them signed as co-CEOs.
“I’ll transfer the investment funds today.”
“Yes.”
Charles suddenly became curious.
They had spent three years buried in development, and yet nothing about the project was really working properly. So why had this man decided to invest?
“Why did you decide to invest in our game?”
At the question, Han Miru smiled. “Because I think that game is going to be a monster hit.”
If startup investing was a lottery, then indie game investing was practically a minefield.
Out of the flood of indie games, the number that actually succeeded wasn’t one in a hundred, but maybe one in a thousand—one in ten thousand, if that.
And yet every so often, a game would slip through that needle’s eye and explode into a massive hit. My Craft, which had now been acquired by NS, was the prime example.
Right now, My Craft was known as the defining sandbox game, but in a few years that would change.
Block Valley.
Continued from Charles Griffin, Ken Utley, and Rufus Bailey’s development, Wechant invested $2 million in the game and secured fifty percent of the equity along with publishing rights.
Released about a year later, it sold more than twenty million copies in its first year alone, an absurd level of success for an indie game.
Unlike other games with fixed stories, Block Valley let users create games inside the game itself and expand its world without limit.
As time went on, the user base only grew, until it eventually evolved into a single game platform enjoyed by three hundred million people.
After that, Purple Games changed its name to Block Games and went public on Nasdaq, where its market cap exceeded $40 billion on the first day alone.
It was such an outrageous achievement that it was hard to believe one game had done it.
As soon as the game’s outline became visible, probably around the first half of next year, companies from all over would start scrambling to invest.
I had already bought fifty percent of what would become a core game in the future market, and I had secured publishing rights on top of that. It was an enormous win.
But the job still wasn’t done.
I was planning to buy additional equity before the IPO, and I still needed to arrange a publisher.
I had already decided what I was going to buy. I just didn’t have the money yet.
“Where to next?”
“Silicon Valley.”
Silicon Valley.
Everyone knew the name, but there was no actual place in the United States called that.
Usually, it referred collectively to cities south of San Francisco—San Jose, Redwood City, Palo Alto, and the like.
Even the exact boundaries varied a little depending on who was talking.
At any rate, this was the cradle of America’s advanced industries and home to many of the world’s biggest IT companies and startups. Korean companies like Yuseong Electronics and LK Nix even had branches here.
As a result, home prices and rent kept skyrocketing, to the point where earning $100,000 a year got you treated like a charity case.
Even so, the startup-support ecosystem was so well developed and it was so easy to find the talent you needed that founders kept flocking here.
I had considered taking a plane, but in the end we rented a car instead. California’s Highway 1, stretching from LA to San Francisco, was famous as a driving route.
I took the wheel, and David sat beside me.
As I drove, warm sunlight and a clear blue ocean greeted us. The endless water stretching along the roadside was a magnificent sight.
At a time like this, it already felt as if I’d succeeded.
Just as I was basking in that good mood, David asked in a worried tone, “Do you really think this style of investing will work?”
“What style of investing are you talking about?”
“The kind where you invest because the hamburger you ate at a pub was delicious, or because you liked a movie and invested in the film company, or because a game was fun and invested in the game itself.”
“Chairman Aaron Baker said it himself. You should invest aggressively in your own tastes and interests. He liked Coca-Cola all the time, invested in Coca-Cola, and struck it rich.”
“And then he invested in the ketchup company he used to enjoy, and lost $13 billion.”
“Well…”
Even the most exceptional investor alive was bound to fail sometimes.
Still, his concern was understandable.
I knew the future and acted on it, but from his perspective, it probably looked like I was investing on a whim.
“Don’t worry too much. That’s why this time I’m planning to invest in a company everyone knows.”
“Which one?”
“Do you know a company called Cooloud?”
David nodded.
“I do.”
“Of course you do.”
“It’s the most famous company in Silicon Valley right now.”
As the name suggested, it was a cloud company.
People tended to think of cloud services only as a place to store data, but in reality they were used for much more than that.
Searching the internet, shopping online, and playing online games were all, in the end, just ways of connecting to the cloud.
As the number of computer and smartphone users and the amount of time they spent online increased, the cloud market grew explosively year after year.
No wonder Silicon Valley was overflowing with companies in the field.
Wasn’t it one of the top three startup industries?
And the fastest-growing company in that fiercely competitive market right now was Cooloud.
“How much do you think that company is worth?”
“About four months ago, Redstone expressed interest in investing. It’s said they offered $14 billion in exchange for acquiring twenty percent of the equity.”
“Then that puts the company’s value at around $70 billion.”
“But the investment fell apart during negotiations. Word is that Cooloud itself backed out.”
“Why?”
“They said the price was too low. The executives apparently asked for twice that amount. With the growth they’re showing now, that would be entirely possible.”
“I see.”
That was exactly right.
Cooloud would go public early the year after next, and on its first day its valuation would soar to $280 billion. To put that in perspective, if it had listed on the KOSPI, it would have ranked second in market cap right behind Yuseong Electronics.
And even that was still absurdly cheap. If I’d had the money, I would have gladly paid twice that and acquired it myself.
David asked me, “Do you plan to invest in Cooloud?”
“Yes.”
At the moment, I had $107 million.
Even if I poured every cent of that in, I still couldn’t buy even one percent. Though just buying that much would already be a huge win.
He thought for a moment, then said, “It’s a good idea, but it’ll be difficult.”
“Why?”
“One of the co-founders is from the prestigious Preston financial dynasty, and the other is a famous IT magnate.”
“You mean they can raise enough capital on their own?”
“Yes. They’ve turned down investment offers from major investment banks, private equity firms, and IT companies. Even if they do accept outside money, they’ll probably wait until they can drive the valuation up as high as possible first.”
So that was why they’d turned down Redstone’s offer too.
“If investors are already lined up outside the door, then they’re even less likely to accept money from a brand-new investment firm.”
“That’s how it’ll be.”
Well, the companies I thought were good usually turned out to look good to other people too.
“Could you at least set up a meeting, whether it works or not?”
Though he was long bankrupt now, he still had the network and reputation he’d built while working at Victory Investment.
He should be able to arrange a meeting without too much trouble.
David nodded.
“Understood.”