"Initially, we'll keep them operating as an independent brand," Takuya Nakayama announced. "Sotsu has built its reputation in the anime industry over many years. Their network of relationships with TV stations and sponsors is a core asset. If we change the brand, we'd have to rebuild those connections from scratch. Let Sotsu continue operating under its own name, while Sega Galaxy coordinates the resource allocation and strategic direction from behind the scenes. Once the integration period is over, we can gradually move toward deeper consolidation."
Pragmatic.
The directors present voiced no objections to this arrangement.
Takuya Nakayama closed the folder in front of him.
"The Sotsu acquisition won't conflict with our operations in Southeast Asia. The funding sources are different, and the execution teams are separate. Director Hattori will lead the initial contact and business evaluation for the Sotsu acquisition. The Investment Department will support them by providing funding plans and valuation models. The Legal Department will simultaneously launch an antitrust pre-review."
He swept his gaze around the room.
"Any other questions?"
No one raised their hand.
"Then we'll start the preliminary preparations for this agenda item. We'll vote on it at the next Board meeting once the full acquisition proposal is ready."
The secretary made the final note in the meeting minutes.
After the meeting adjourned, the directors filed out in small groups. Faintly audible private conversations drifted through the hallway.
"With Sotsu in our grasp, Bandai will be a trapped rat in a jar."
"If Makoto Yamashina hears about this, he won't get a wink of sleep tonight."
Director Hattori was the last to leave, exiting the conference room side-by-side with Takuya Nakayama.
The old man offered no pleasantries. He simply removed his reading glasses, tucked them into his breast pocket, nodded to Takuya, and turned toward the elevators.
Takuya Nakayama stood in the hallway, watching Hattori's figure disappear around the corner.
With the Sotsu move on the board, Bandai's room for maneuver was almost gone.
Makoto Yamashina would either have to sign the merger agreement or watch Bandai's licensing business slip through his fingers, bit by bit.
There was no need to rush them.
Time would finish what Sega had started.
Monday, July 29th.
The morning mist had yet to lift from the West Coast of North America.
Inside the Monitoring Center on the third floor of Silicon Valley Online's headquarters building in Redwood City, the sound of keyboards clattering filled the air.
Frank Marshall stood before the main screen, a cup of black coffee in hand.
The line graph on the screen was climbing sharply at a sixty-degree angle.
"Concurrent connections have broken twenty thousand," the Technical Director announced, his eyes glued to the monitor.
The server cluster was humming steadily, the roar of cooling fans filling the entire server room.
Today was the official release date of Dungeons & Dragons Online.
The first batch of 100,000 physical discs, manufactured by Sega of North America, had already been distributed to major electronics retailers across the country last Friday.
On the shelves of Best Buy and Walmart, the packaging boxes adorned with the Red Dragon logo occupied the most prominent positions.
The sell-through data from retail channels was starkly clear.
Seventy percent of the 100,000 copies in stock had been sold over the weekend.
"How's the pressure on the Passport registration interface?" Frank took a sip of his coffee.
"Bandwidth's tight, but we're holding up." The Technical Director switched to a backend dashboard. "The activation rate for the seven-day free trial is insane. Players who bought the optical disc don't want to wait even a single second."
Try before you buy.
This marketing strategy of offering an immersive, upfront experience directly dismantled the consumer resistance typical of traditional buy-to-play models.
For a monthly fee of less than ten dollars, or by purchasing a point card, anyone could form a party and conquer dungeons in the Forgotten Realms. The math was a no-brainer.
Downtown San Francisco.
Cyberspace Internet Cafe.
Reno, the manager, stood behind the counter, surveying the crowded room.
All twenty Pentium computers were occupied, with another group of people standing behind them, waiting for a station.
Every screen displayed the same scene: the dungeons of D&D.
"Priest! Heal!"
"I'm out of spell slots! Warrior, tank it!"
Chaotic shouts echoed through the cafe.
Reno reviewed the sales logs. This crowd had stormed in the moment they opened in the morning and booked every single machine. They were paying hourly, and they'd even eaten lunch right at their keyboards.
The isolated islands of the LAN era were finally connected, and the social topology of PC gaming underwent its first major restructuring here.
The perspective shifted back to Frank.
The phone on his desk rang. It was Michael Moritz from Sequoia Capital.
"Frank, Wall Street is very interested in your first-day data," Moritz said, his voice tinged with amusement. "A few analysts at Goldman Sachs reviewed your dual-track model of monthly subscriptions and time cards. They're highly impressed. A sustainable cash flow—that's a much more compelling story than selling single-player cartridges."
Frank leaned back in his chair. "This is just the beginning. Wait until the seven-day free trial ends and the real conversion rate comes in. You can pop the champagne then."
In Silicon Valley Online's current equity structure, Sega of America held the largest stake, while Sequoia and KPCB held key follow-on investment shares.
Capital always has a keen sense of smell.
The target they were betting on had long since transcended a single entertainment product; it was the underlying account matrix known as the "Passport."
"The essence of online games is the management of digital assets," Frank added to the person on the other end of the line. "Single-player games sell an experience, but online games sell social relationships and the accumulation of assets. The more time players invest in the continent of Faerûn, the higher their sunk costs, and the harder it becomes for them to leave. This is what the people at Goldman Sachs truly understand."
The boom in the PC gaming market wasn't just driven by DND alone.
Throughout the summer, the North American computer hardware market experienced a massive upgrade wave.
The catalyst was Quake, released by id Software last month.
Its full 3D polygonal rendering, combined with the synergistic control of a mouse and keyboard, opened the eyes of players who were used to gamepads.
To achieve higher frame rates, players were more than willing to empty their wallets to buy faster Pentium processors.
The newly released Voodoo graphics accelerator card from 3dfx was sold out in all major computer stores because it could perfectly run Quake's GLQuake patch.
"Quake has raised the hardware bar for PCs," Frank said, flipping through the industry reports on his desk. "But it has also whetted the players' appetites. Traditional 2D side-scrollers are losing their appeal on PC. The impact of Moore's Law on the entertainment sector is beginning to manifest. The spiral iteration of software and hardware is building a new commercial flywheel within the PC ecosystem, one distinct from the royalty-based model of game consoles."
The technical dividend was paying off.
At the Goldman Sachs headquarters in New York's Wall Street, the air conditioning hummed steadily, and the conference room smelled faintly of bitter coffee.
Several printed industry analysis reports lay scattered across the long oval table.
Investment bank analysts were re-evaluating the growth model of the North American electronic entertainment industry.
A senior partner pushed Silicon Valley Online's financial briefing to the center of the table.
It clearly detailed the first-week launch figures for Dungeons & Dragons Online: the number of active users, the rate of point card consumption, and the monthly subscription conversion rate.