"Namco has always wanted to develop its own home console. They tried back in the PC-E era, but were constrained by funding and the state of semiconductor technology, and never managed to make it happen. Without a voice in hardware development, Namco will forever be at the mercy of others—especially that old man in Kyoto."
Hearing "that old man in Kyoto," Masaya Nakamura's expression darkened.
During the Famicom era, Namco had been one of the earliest six licensed developers. Later, however, they were ruthlessly suppressed by Yamauchi Hiroshi, who limited the number of cartridges they could publish. Nakamura had been nursing this grudge for nearly a decade.
"How do you propose we collaborate?" Nakamura asked.
Ken Kutaragi stood up, walked to the whiteboard, and began drawing diagrams with a marker.
"We need to establish a common architecture. Sony will develop a home console based on this architecture, while Namco will develop a new arcade motherboard. This way, games developed for the arcade motherboard can be ported to Sony's home console more easily and smoothly, significantly reducing the cost, risk, and ensuring the quality of the ports."
Kutaragi drew a circle and drew arrows pointing in two directions.
"Think about it, President Nakamura. You develop a game, earn coins in the arcades, then with minimal modifications, seamlessly port it to the PlayStation and sell it to home users. One R&D investment, double the revenue.
Moreover, Sony will shoulder the majority of the hardware development costs. All you need to contribute is your expertise and manpower."
Masaya Nakamura stared at the rough sketches on the whiteboard, his fingers gently tapping the table.
This was Namco's current pain point.
Arcade boards were becoming increasingly expensive, and the development risks were growing.
If someone could share the hardware costs and open up the home console market—
"It sounds appealing," Masaya Nakamura said, but he didn't commit immediately. "However, we need to assess the technical feasibility."
"Of course. I'm confident that the Namco team that developed the System 21 board will recognize the value in this proposal."
Masaya Nakamura set down the paper, his gaze sharpening. "That does pique my interest."
Nobuyuki Idei added the finishing touch: "Furthermore, Sony has pledged that Namco will receive the most favorable royalty terms on the PlayStation platform. We're not Nintendo, imposing unfair clauses. We want the platform to thrive, so we're willing to let you keep the lion's share of the profits."
Those words completely shattered Masaya Nakamura's defenses.
The enemy of my enemy is my friend.
The chance to stick it to Nintendo and make money at the same time? Why wouldn't he take it?
"Sony has the money, Namco has the technology." Nakamura stood up and walked to the window, gazing at Tokyo Tower in the distance. "Since you're not afraid of losing money, what reason do I have to refuse? But—"
He turned around, his gaze sharp and intense. "I want to see real results. Presentations alone won't cut it. Next month, bring me detailed technical plans. I want my team to assess them personally."
"No problem," Ken Kutaragi replied with a confident grin.
Nobuyuki Idei secretly breathed a sigh of relief.
With Namco on board, negotiating with other third-party vendors would be much smoother.
Two weeks passed quickly.
What Kutaragi brought wasn't just some blueprints; he brought the full weight of Sony's decades of semiconductor expertise.
Namco's engineers initially approached the plans with skepticism, wondering what a bunch of electronics guys knew about game console architecture. But as they delved deeper, cold sweat replaced their doubts, and they ended up completely awed.
This architecture was simply too far ahead of its time.
If cost were no object, this machine's 3D processing power could blow current arcade systems out of the water.
Of course, many directions and details still needed refinement, but given Sony's deep technical reserves, these were no longer insurmountable technical challenges. What they lacked was experience.
This was precisely the value Namco brought to the table.
In the top-floor conference room of the Iron Plate Formation Building, the atmosphere was far more harmonious than it had been two weeks prior.
Masaya Nakamura glanced at the final draft of the agreement in his hands, his finger lingering for a long moment on the line that read "30% royalty discount."
This wasn't just about money; it was about prestige—the special privilege Sony was granting Namco.
After ten years of subservience to Nintendo, Namco was finally being treated as a distinguished guest by Sony.
Moreover, this partnership would enhance the appeal of the arcade platform to third-party developers.
"Developing a next-generation arcade platform based on PlayStation architecture—we've internally dubbed it System 11," Ken Kutaragi said, pointing to the relevant clause, his voice brimming with pride. "With this, games developed for arcades by Namco can be seamlessly ported to home consoles without any translation barriers or loss of visual quality."
Masaya Nakamura closed the file, picked up his fountain pen, and pressed the tip firmly onto the paper.
"Deal."
As Oga Norio and Masaya Nakamura shook hands, an alliance based on Sony's new console was officially formed.
With the business concluded, Oga Norio didn't rush to leave. He picked up his teacup and casually mentioned, "President Nakamura, now that the hardware architecture is settled, I have a small request."
"Please go ahead, President Oga."
"About DDR." Oga Norio leaned forward slightly. "The first-generation machine was developed by Sega, as we needed to leverage their distribution channels and hardware expertise at the time. But now that we're going it alone and have the more powerful System 11 motherboard, I'd like to entrust the development of the second-generation DDR to Namco."
Masaya Nakamura was somewhat surprised.
DDR was now a cash cow.
While the gaming industry might see it as just a dance machine, on the balance sheets, it was practically a money-printing machine.
"The first-generation Sega hardware was already outdated, with its lighting and low-resolution screens ill-suited for promoting Sony Music's high-quality recordings," Oga Norio said, shaking his head with disdain. "We needed more dazzling lights, smoother motion detection, and 3D backgrounds that only System 11 could deliver."
Nobuyuki Idei chimed in, "This isn't just a game project. President Nakamura might not know this, but within Sony, this is our trump card against the conservative board members."
Sony was a massive corporation, and the elderly directors on the board had long been skeptical about entering the gaming industry, finding every excuse to block Sony's entry into the electronic game market.
Even Akio Morita, the chairman who was no longer actively involved in management, though supportive, couldn't withstand the relentless onslaught from the opposition during financial report meetings.
That's when the Video Game Division would slam the DDR revenue reports onto the table.
The impressive profit margins, combined with the hefty music licensing fees paid annually to Sony Music, served as a resounding slap in the face, leaving the opponents speechless.
Combining cutting-edge technology with cold, hard cash—this was the safeguard that allowed Sony's gaming faction to invest so heavily in the new console project.
"You're entrusting such a crucial project to us?" Masaya Nakamura narrowed his eyes.
"Because we believe in Namco's technical expertise and game development heritage," Oga Norio replied with a shrewd businessman's smile. "Moreover, only if Namco perfects the arcade version can our future PlayStation version of DDR truly go viral, wouldn't you agree?"
It was an offer they couldn't refuse.
Taking on this project would not only earn Namco a development fee, but also a share of arcade sales revenue.
More importantly, this was Sony's pledge of trust: "We're entrusting even our most profitable IP to you. Now it's time to show us what you're made of!"
Masaya Nakamura burst into laughter. "President Oga, it seems we're not just allies, but grasshoppers on the same boat. Namco accepts this project."
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