"The cash flow is extremely healthy," the senior partner said, tapping the paper. "This is far more sustainable than the one-time purchase model of single-player games."
"Silicon Valley Online has built a platform where players have established social ties," he continued. "The cost of leaving has become much higher."
The technology analyst sitting opposite him opened another report.
"It's not just online games," the analyst said, pointing to the sales data for Pentium processors and 3dfx graphics accelerator cards. "The hardware side is also gaining momentum. Less than two months after the release of Quake, sales of high-end PC components in North American retail channels have doubled. Consumers are willing to pay for smoother 3D graphics. Moore's Law has formed a complete commercial closed loop in the personal computer entertainment sector."
The discussion in the conference room shifted to the year-end product line.
Capital's keen sense had captured the massive scale of the emerging PC gaming market.
They were no longer just focused on the console sales of Sony and Nintendo, but were turning their attention to the software developers who could drive the iteration of PC hardware.
Redwood City, Silicon Valley Online Headquarters.
Frank Marshall hung up the phone with Michael Moritz.
Sequoia Capital was very satisfied with the current revenue figures and had even proposed starting the next round of financing early to reserve funds for subsequent network infrastructure expansion.
Frank stood up and walked to the whiteboard in his office.
On it was a development schedule for several major competitors.
At the top was Westwood Studios' Command & Conquer: Red Alert, marked for late October.
Below it was Blizzard Entertainment's Diablo, marked for the end of the year.
Frank picked up a marker and drew a heavy circle next to Blizzard's name.
"Battle.net," he muttered.
Dungeons & Dragons Online had proven the feasibility of turn-based gameplay over dial-up networks, but Blizzard was challenging real-time action feedback.
If the Battle.net system could launch smoothly by the end of the year and, in conjunction with Diablo, solve the latency issues of wide-area network multiplayer, the social model of PC gaming would be completely rewritten.
The market capacity was far from bottoming out.
The dividends brought by the leap in hardware performance were enough to accommodate several giants staking out their territory simultaneously.
San Francisco, California.
In the editorial office of Computer Gaming World, David was proofreading the layout for the September issue.
The cover story's headline was set as "A New Era of PC Entertainment."
Paul walked over with a stack of reader letters and placed them on David's desk.
"They're all asking for the exact release date of Command & Conquer: Red Alert," Paul said, pulling out a chair and sitting down. "Westwood's live gameplay demo at E3 has whetted everyone's appetite. With land, sea, and air forces coordinating, plus LAN battles for up to eight players, gamers are itching to crush their opponents with the Soviet armored divisions."
David flipped through the opened letters.
"Quake taught players how to use a mouse and keyboard to navigate 3D space. Dungeons & Dragons Online taught them how to pay for online services," David noted, jotting down a few points on a sticky note. "What Westwood and Blizzard are doing is integrating these habits and pushing them into the mass market."
Paul agreed.
"Blizzard is keeping things under wraps," Paul said, flipping through the materials in his hand. "All we know is that Diablo has abandoned turn-based combat in favor of completely real-time action. The Battle.net test nodes have already been deployed in several major cities across the US. They're planning to complete all network stress tests before the Christmas holidays."
The media's hype had plunged the entire North American gaming community into a long, agonizing wait.
Computer hardware retailers were also gearing up.
To prepare for the release of these two major titles at the end of the year, major computer malls began promoting pre-built systems equipped with high-capacity RAM and the latest graphics accelerator cards. Dial-up modems had become a standard feature in these builds.
In Tokyo, at the Sega Headquarters Building.
Inside the intelligence summary room on the executive floor, the rhythmic clatter of keyboards echoed.
Takuya Nakayama flipped through a market research report sent by the North American branch. It detailed the revenue figures for Dungeons & Dragons Online and recent fluctuations in hardware sales within the North American PC market.
Oguchi Hisao sat beside him, holding a translated Goldman Sachs analysis brief.
"The winds in the North American market have shifted," Oguchi said, pointing to the data in the brief. "PC gaming is no longer a niche toy for geeks. The improvement in hardware performance, combined with the spread of network infrastructure, has given the PC platform the potential to challenge home consoles."
Takuya Nakayama set down the report.
"This isn't surprising," he said, taking a sip of tea. "The open nature of the PC architecture ensures it iterates faster than closed consoles. Sega's Jupiter may hold the advantage in raw power, but we cannot ignore the online social ecosystem forming on the PC side."
Oguchi Hisao nodded.
"The success of Silicon Valley Online has validated our judgment," Oguchi Hisao said. "Players are willing to pay for high-quality online services. We need to bring this model back to the console platform. Department Manager Sato's hardware team has already reserved a dedicated network module in the architecture of our next-generation console."
"Hardware alone isn't enough," Takuya Nakayama reminded him. "Content is the core. The titles Westwood and Blizzard are releasing at the end of the year will raise the bar for PC games to a new level. Sega's first-party software development department must accelerate its research into online gameplay. We cannot afford to fall behind in this field."
Takuya Nakayama paused, then added, "Compile a report on our online game operations and core technical issues and send it over to Mercury Technology. Their second game should be nearly finished. Let's see if they have any ideas regarding online gaming."
"I recall the console game rental shops under Nine-Tattooed Dragon's distribution channel are doing quite well. Send them the data on internet cafes in the United States as well, and see if they're interested."
The prosperity of the North American PC gaming market sounded an alarm for Sega, while simultaneously pointing the way forward.
Throughout the autumn of 1996, a sense of anxious anticipation enveloped the North American electronic entertainment market.
Every issue of gaming magazines devoted extensive coverage to tracking the development of Command & Conquer: Red Alert and Diablo.
On BBS forums, players debated the optimal harvesting rates for Tiberium and argued whether the Battle.net system could resolve the lag caused by high ping.
Meanwhile, the capital markets kept a close eye on the pre-order data for these two titles, attempting to gauge the true valuation of the PC gaming industry.
As hardware manufacturers, software developers, media outlets, and investors converged, PC gaming ceased to be a mere appendage to console gaming and established its own independent commercial logic.
This trend swept across the United States, spreading from development studios in Silicon Valley to trading desks on Wall Street, eventually engulfing tens of millions of personal computer terminals nationwide.
With the year-end release season approaching, the era of PC gaming was officially declared to have arrived.