Chapter 100: Fierce Competition

A super order exceeding two hundred million dollars once again stirred a sensation across America. Even a fool could tell this was a lucrative deal now—how could those politicians possibly keep their composure? This was only the first order; ongoing demand was expected, and if the market responded well, explosive growth would follow.

A game console, after all—could there truly be such staggering demand? This was the question posed by Wall Street and by American society at large. Their doubts were swiftly answered, as clients from Europe and Japan also expressed their needs—the quantities they wanted were certainly not less than those of the Americans.

Regarding the order price and payment terms, the Japanese showed no hesitation whatsoever, signing the agreement with remarkable straightforwardness. Obtaining production authorization, however, was no easy feat; a 10% sales royalty was high, but not excessive, though the additional conditions were rather tough. William White’s demand was that, during the period of cooperation, no similar machines could be produced, and after the partnership ended, R&D could only begin eighteen months later.

William White had long anticipated that the Japanese would eventually set up their own operations. His aim was simply to delay their progress, to stave off brutal competition for as long as possible.

The three companies were indeed in a tight spot. Give up? What a joke! These orders were only the beginning; this was a billion-dollar business annually. If any missed out this time, the gap between them would only widen. Develop their own product? Without at least two years, it was pointless to even attempt; by the time their game was ready, the others would likely have already launched an upgrade.

The final agreement settled on twelve months, as neither side wished to delay further. With money waiting on the streets, not rushing to seize it would be the height of foolishness.

Some questioned the decision to involve three companies—wouldn’t that drive the price down? Not at all. Including William White, everyone was tacitly agreed on the final retail price, with a fluctuation range of no more than 5%. Call it monopoly, call it price-fixing—well, perhaps it is, but where’s your evidence? Toyota and Honda wage fierce battles, but is there much difference in their prices?

The Japanese are cunning—it's an unspoken understanding among their industry associations. No company would dare disrupt the equilibrium; the aim is profit, not price wars. Associations in other countries don’t concern themselves with such matters, their main function being to organize trips. Except for Japan, price wars elsewhere are absurd—a television’s profit might be only thirty dollars, which would never happen in Japan. They would rather shut down than ruin the market.

The troubled Japanese departed, needing to quickly develop their products and build their own sales channels. The world of Legend expanded rapidly, several headhunting firms casting wide nets and infuriating Atari to the point of near collapse. Generous benefits, high salaries, and stock options—such companies couldn’t be found elsewhere in America.

Other politicians grumbled, but California’s government showed indifference. William White’s companies were hiring plenty, which greatly benefited the local economy. They dared not offend this young master; if things soured, he could simply relocate to Texas—did anyone think he couldn’t set up shop in Houston?

A dazzling array of maneuvers left Wall Street thoroughly bewildered, desperate to ask one thing: Brother, where did all this money come from?

Indeed—where did the money come from? The answer soon became clear: William White mortgaged three games, and Sumitomo Bank immediately granted a sixty-million-dollar line of credit. Rumor had it they were prepared to lend a hundred million from the start, but William White declined.

By their calculations, even a hundred million wouldn't suffice. With so many orders, many of them rentals, how would he resolve these funding issues? Soon, they had their answer.

Production authorization once again—it was sheer profligacy! What was he thinking? Reckless? Maybe. This way, sixty million was more than enough, with plenty left over.

Such a sumptuous feast, yet Wall Street couldn't claim a single grain—they were understandably frustrated. They had been certain William White would seek financing, whether through equity or collateral, and were eager to get involved. He possessed so many valuable assets; any bite would be a windfall. Now, everything was lost.

William White would have to be mad to seek Wall Street financing. With current interest rates close to 20%, how could he possibly repay such loans?

Launching an A-round of funding wouldn’t be easy either; knowing he was cash-strapped, they would devour his shares entirely, leaving him perhaps fifteen percent if they were generous.

Most listed companies played this game; by the time the stock officially went public, the founder might retain less than ten percent.

Americans simply have no concept of a private company; to them, a company is never yours, but everyone’s. If you maintain decent returns, you can remain the boss; if not, they can easily oust the founder. That’s the Wall Street norm.

Ten percent royalty? Good heavens—have the Japanese lost their minds? Well, the profits were indeed astonishing.

What shocked them most was William White’s decisiveness. This was clearly a meticulously planned strategy; he’d never intended to manufacture himself. Like his software company, it was more a research institution. He didn’t even want to build a sales system—if you want to buy, fine; if not, get lost.

Always viewing things from their own perspective, they saw it as unwise. But looking from William White’s position led to a different conclusion.

If William White were left with only fifteen percent equity, his interests would pale in comparison. Even worse, he might lose managerial control at any time. How could that be acceptable? William White wasn’t an idiot; without a solution, fine, but with options, why risk it?

Another cash-printing machine? William White’s companies were all extraordinary, their most prominent feature being vast cash flow. Over time, this trait would only become more pronounced.

Anyone could see these were premium assets—even Wall Street’s scoundrels knew it. Who would willingly hand over such treasures? Did William White really seem that foolish?

Foolish or not, they weren’t sure, but his second film’s box office had broken another hundred million, global takings exceeding 150 million. Clearly, he was chasing his own records. Not long ago, so-called veterans insisted it was a fluke, asserting he would never replicate his success, citing several flop comedies as examples.

How much time had passed? Their words were promptly slapped down.

For those self-important elders, William White could only shrug, claiming his own experience was shallow and all achievements mere luck, hoping his good fortune lasted a while—after all, his expenses were considerable, and he’d just bought a plane. Without enough dollars, even fueling it would be a problem.

As for those illustrious old-timers, William White admitted his ignorance, confessing he hadn’t heard of them and would need to look them up at home.