Experience Failure
While Ryu Geun-tae was carrying out his second meeting with Yamauchi, the president of Nintendo, under Yoon-gi’s instructions, Yoon-gi himself was meeting with Hayao Nakayama, the president of Sega, not Nintendo. Because the surveillance was relatively focused on Ryu Geun-tae, Yoon-gi was able to slip out of the mansion quietly at dawn and secretly move his lodging to a hotel in Tokyo. He had asked Guster to arrange a meeting with Hayao Nakayama through a Japanese financier, and thus, he was now having a secret conference with Nakayama in a hotel room.
“It’s a pleasure to meet you. I am Choi Yoon-gi, the actual owner of YK Department Store in Korea and the eldest grandson of the Samwoo Group. Abroad, I am usually called Yoon, so please feel free to call me that.”
At Yoon-gi’s polite greeting, Hayao Nakayama was momentarily flustered, but he shook his hand nonetheless. “I am the president of Sega, Hayao Nakayama.”
With his hair thinning, styled in a rigid side-part with pomade, thin-rimmed glasses, sharp eyes, and a slightly large nose, Nakayama had an impression of being quite strong-willed. Indeed, he frowned the moment he saw Yoon-gi.
‘Even if it was a favor, to think I have to meet with a middle schooler like this…’
Although he was unhappy about having to hold a secret meeting with such a young child, the chairman of a fairly large company like Sega sat down out of consideration for the acquaintance who had asked him for the favor.
“I hear that Nintendo’s Famicom is doing very well these days.”
For a moment, Nakayama felt his blood boil. ‘Be patient, be patient.’ Even in front of Nakayama, whose head seemed to be steaming, Yoon-gi did not stop praising Nintendo. “I actually played the game, and it was truly fun. From sports that everyone, young and old, loves, to the intuitive game screen. It felt strange that it wouldn’t be a success.”
Yoon-gi continued speaking while watching Nakayama’s fists tremble. “On the other hand, didn’t Sega release a game console on the same day as the Famicom’s launch? It was called the ‘SG-1000’, right?”
At Yoon-gi’s verifying question, Nakayama nodded with a face that had turned beet red. “That… is correct.”
“I heard that President Nakayama is a person of great insight, so what do you think about the battle between the Famicom and the SG-1000? Do you think the SG-1000 has a chance of winning?”
“Did you arrange this meeting to insult me?!” Nakayama finally jumped up from his seat and shouted again. “I came here because of a friend’s request, but I cannot stay here any longer due to your rudeness! I shall take my leave now!!”
“20 billion yen.”
At Yoon-gi’s words, Hayao Nakayama’s movements stopped. Although he had a fiery temper, Nakayama was also a cool-headed businessman.
“I am currently looking for a place to invest about 20 billion yen. It was originally investment money to build a department store, but since that was resolved more cheaply, the funds are just sitting there.”
Gulp! Nakayama swallowed his saliva without realizing it. The initial sales performance of the SG-1000 was a total failure. Sega was a much larger company than Nintendo at the time, and because of this, they had produced the SG-1000 with an incredibly arrogant mindset—the thought that, ‘How dare people not buy something we make?’ Naturally, the sales of the SG-1000 were so sluggish that comparing them to the Famicom was an insult to the Famicom, and because of this, Sega’s stock was plummeting.
In the midst of that, an investment of 20 billion yen. This was by no means a small amount. In 2018, Sega’s operating profit was 11.9 billion yen. Considering the inflation of the era, Yoon-gi was offering to invest an amount that far exceeded the future operating profit of Sega.
“Hmm…!” Eventually, Nakayama suppressed his anger and sat back down.
“I truly had no intention of making you angry, President. I apologize. I just judged that it was necessary to look back at Sega’s current situation.”
“Ugh…” Nakayama groaned and looked at Yoon-gi. It was a look that seemed to say, ‘What are you going to say next?’ but Yoon-gi did not lose his smile and opened his mouth again.
“First, let’s finalize this. I want to invest 20 billion yen in Sega. The method is through the purchase of stock. Of course, I intend to add a premium to the stock. Are you interested?”
“It depends on the conditions, but it seems there is room for consideration.” At Nakayama’s words as a manager, Yoon-gi continued.
“The conditions are not particularly large. YK Department Store will purchase Sega’s stock, and our YK Department Store will just receive dividends from Sega.”
Yoon-gi signaled to Cha Pil-gyu, who brought several documents and placed them on the table.
“This is the approximate situation of YK Department Store and the current status of the Samwoo Group to which I belong. Of course, these are only the publicly disclosed figures, so there may be some detailed differences, but it will be enough for you to gauge the scale.”
Nakayama suppressed his fiery temper with his businessman’s blood and began to read the documents Yoon-gi had provided. ‘My god, the daily average sales of a department store that has just launched exceed 100 million yen? If you add the sales of the mini-department stores under it, this is an absurd amount! And the scale of this Samwoo Group is not inferior to any major Japanese company.’
Nakayama swallowed his saliva without realizing it as he looked at Yoon-gi. The sound of him gulping echoed in the room, but Yoon-gi did not show that he had heard it and spoke up.
“How is it? Has it reached the point where you can at least feel that my proposal is not a lie?”
Nakayama let out a low sigh and nodded. In fact, Sega was in a situation where they had to do something to stop their falling stock. Of course, it had only been two months since the launch, so the stock market hadn’t been cut in half yet, but it was a clear fact that this downward trend would continue. In particular, Nakayama, who had excellent insight, knew this better than anyone, and he was in desperate need of external good news to reverse it.
“Do you only want dividends?”
“There may be times when I sell the stock later. However, when I do sell that stock, I don’t mind including a clause that gives the management priority rights.”
“Then that means you have other conditions…” As Nakayama trailed off, Yoon-gi smiled.
“Then, let’s speak more clearly. Did the SG-1000 succeed or fail?”
Finally, instead of getting angry, Nakayama sighed and nodded. “It failed. It is a total, utter failure.”
“Then we can move faster. I have only three conditions.”
“I’m listening.”
“First, recall all SG-1000 units and completely withdraw from the business plan.”
“No, that’s…”
“Is there any reason to hold onto a business that doesn’t make money? President Nakayama, you were rumored to be a person of insight who knows how to make money, but I didn’t know you were someone who didn’t know when to let go.”
Yoon-gi’s remark was possible because he had investigated Nakayama’s background. Before Nakayama was scouted by Sega, he had been involved in the replication and sale of American game consoles. He had originally distributed used game consoles before moving on to illegal pirated ones, and when Sega tried to sanction him, they were so impressed by his unique insight that they recruited him instead. As such, Nakayama agreed that there was no future for the SG-1000, but he decided to hear the second condition first.
“First, what is the second condition?”
“I want you to appoint me as an advisor for the development of the next-generation game console. Furthermore, this is not just a simple advisory role, but a level where I have clear voting rights—that is, the ability to confirm yes or no.”
“Isn’t this interfering with management rights?”
Yoon-gi shook his head. “No. I have no interest in management rights. I will only interfere with the project. Instead, my opinion must have strong power when it comes to the concept of home game consoles. I have no interest in the arcade side that goes into arcades, so you can rest assured about that.”
“Home game consoles…”
“Computers are also excluded. Only home game consoles. My input must be involved in selling this as a catchphrase. With the amount I’ve proposed, I should have enough say for that, right? I’m giving up on management rights and only asking for that much power; are you saying you can’t even do that?”
As Yoon-gi growled in a somewhat threatening tone, Nakayama groaned and nodded without realizing it. That was how reasonable Yoon-gi’s conditions were.
“I will consider it positively. Then, what is the third condition?”
“This deal must be kept secret for at least three months. The validity itself will be triggered the moment the contract is written and sealed, but it means that it should only be disclosed to the public after three months. In the meantime, whether you stop sales of the SG-1000 or do whatever, I will not interfere.”
“Is there a reason?”
Yoon-gi smiled and nodded. “There is a Korean company trying to invest in Nintendo.”
* * *
A few days after the first meeting, Yoon-gi and Nakayama met again at the hotel.
“I heard that the president of YK Department Store visited Nintendo headquarters several times; what does this mean? Isn’t it that YK Department Store turned its eyes to us after failing to invest in Nintendo?”
It was a deduction with clear reasons and grounds. However, Yoon-gi shook his head.
“That was just an act. I can’t tell you the details, but if I really wanted to buy Nintendo stock, I would have arranged a meeting like this with Yamauchi, the president of Nintendo, right?”
“Hmm…” Since this was also a plausible answer, Nakayama fell into thought.
“If you want, you can include a clause in the contract that says, ‘If a deal with Nintendo is discovered, the contract will be terminated at the 100 percent responsibility of YK Department Store.’”
Yoon-gi’s expression was full of conviction. He had even offered the extraordinary condition of adding a special clause to the contract, so Nakayama, having no reason not to believe him, nodded.
“I understand. If that’s the case…”
“What about the other conditions?”
“After talking with my close aides, we have decided to accept.”
“Good. Then, there is one more condition I would like you to grant. This is optional.”
After hearing Yoon-gi’s proposal, Nakayama showed a perplexed expression but reacted as if it were plausible, and time flew by in a blur.
* * *
Three months passed very quickly. The secret agreement between Yoon-gi and Sega was carried out quietly, and in the meantime, Sega internally decided to completely withdraw the project for the SG-1000 and implemented the preparations for it. On the other hand, Nintendo sent an initial volume of 50,000 units to Korea through an agreement signed with the Daehan Group, and Jung Tae-ryong, who was nominally a managing director of Daehan Chemical, began working behind the scenes to sell the volume in Korea.
And finally, December. Aiming for the Christmas season, Jung Tae-ryong was smiling as he inspected the home appliance stores operated by the Daehan Group.
‘Is it about fifteen days left? The deadline for YK Department Store. To think there’s still no movement. They must think that if they beg JSD, they can extend the deadline.’
If JSD were to try to vaguely extend the deadline, this time, pressure mobilized not only by the Daehan Group but also by other groups would begin. In that case, the pressure YK would receive would be at an absurd level compared to before. If things went wrong, they could be subjected to high-intensity tax audits by the National Tax Service and even be framed for crimes they didn’t commit. Or, they could pressure the Samwoo Group to spit out the shares of YK Department Store to a total stranger. That ‘total stranger’ would surely be himself.
Jung Tae-ryong’s mouth kept curling into a smile at the situation, which was enjoyable just to imagine, and in the midst of that, a mother in her mid-30s entered the store with a boy who looked about ten years old. And the moment the boy entered the store, what he saw was a color television showing an exciting screen with flashy game sounds.
[Home Game Console, Super Sale Event]
The child, looking at the placard hanging above the color television, pulled on his mother’s skirt and shouted.
“Mom! Buy me that!”