Chapter 169 - Prohibition of Sales

Atari's Atari-2600 console is now the undisputed hegemon of the North American home console market, with sales exceeding 3 million units in the United States last year. Of course, his supremacy has not been without challenges, such as Philips' Osced 2 console that entered the US market, and Mattel's Intellivision console.

In particular, the latter's hardware performance is a cut above that of the Atari-2600, which has caused considerable shakes to Atari's dominance. But Atari grabbed the first release rights for most of the best-selling games on the market, and along with the cheaper consoles, it has been firmly holding the largest market share.

But when Oriental Games' FC consoles swept American newspapers and television, Atari's president, Ray Casal, immediately felt restless. Today's Oriental Games Company is no longer the obscure small company of a year ago, and its feat of sweeping the North American arcade field has made Atari dare not take it lightly in the slightest.

In particular, Atari has asked the other party several times to buy the adaptation rights of several of its best-selling arcade machines, but they have been rejected by Oriental Games, which has made Atari have long been vigilant. Now, what they don't want to see happens, the arcade giant of Oriental Games has begun to invade the territory of home game consoles.

As soon as the FC game console hit the shelves, Atari's technical department got back several prototypes for complete disassembly. The results are frustrating, and although the FC is an 8-bit machine, the performance is excellent. Much better than Atari's staple product, the Atari-2600.

When the head of Atari's technical department reported to CEO Ray Casal, he had a look of frustration on his face: "This group of Hong Kong people is incredible, how can they keep the cost so low? A PPU on a game console alone costs $10." And they only have $100 for outgoing shipments, which is almost unprofitable!"

Good gaming performance is supported by better hardware, and the hardware cost of the FC machine is much higher than that of the Atari-2600, but the retail price set by Oriental Games is the same as that of Atari, which is $199. Although the Intellivision game console launched by Mattel Company has good hardware performance, it is priced at a whopping $299, which is not very competitive at such a high price.

But the FC machine of Oriental Games is different. Not only was it priced the same as the Atari-2600, but the games released at the same time were the last popular arcade games of the moment, which made Ray Casal feel a huge threat in an instant. In fact, Casal didn't even need to report with his technical director. He himself tried it out on an FC console for a few minutes and immediately knew that Atari's deadly enemy had appeared.

"We have to develop a new game console that can compete with it in three months!" was Casal's remark in his president's office, pointing to an FC game console and speaking in a very cold tone to the head of the R&D department.

But even so, Casal served as president of Atari Inc. It is also necessary to win this precious three months for the R&D department. Otherwise, there is no waiting for the relay of new consoles to be launched. The Atari-2600 is likely to have been defeated by the FC console.

At this time, Atari began to reflect its value by relying on the strong distribution system established by the sales of millions of consoles every year. Casal issued a ban on all dealers who distributed Atari consoles, and the Atari-2600 and FC consoles could only choose one or the other, and anyone who distributed FC consoles would be blacklisted by Atari.

With new consoles just ready to hit the market on the one hand, and best-selling star products that sell millions of consoles and tens of millions of game cartridges every year, most dealers have chosen Atari without hesitation. As a result, the distributor who also distributed the Atari game console after Atari issued a ban on the FC game console. They have called Oriental Games Company to ask for the termination of the previously signed supply agreement.

In the conference room of Hong Kong's Oriental Game Company, more and more information came back from the United States. This time, the distributors collectively terminated the sales contract with Oriental Game Company, and it has been determined that Atari is behind it. Distributors who opted out accounted for 70% of all distributors, and if Oriental Games did not take immediate remedial action, FC consoles might not be on the shelves in most of North America.

"Xiao Li Sheng, I think the reason why distributors chose Atari over us is that in addition to the reason why the Atari-2600 is selling well now, the lower profit from selling our FC consoles is also an important reason. Han Peng said with a wry smile, "The shipping price we give to the first-level distributor is 100 US dollars, and the Atari-2600 is only 90 US dollars! That is to say, in the entire distribution link, agents at all levels can make at least 10 US dollars more from selling Atari's game consoles than from selling our FC machines!"

"What you said are all details, and the key for us now is how to solve the current problem!" Li Xuan said with a stern face, "Brother Peng, when the GameBoy was sold before, did we establish a complete database of terminal sellers in North America?"

Li Xuan thought that the marketing system of Oriental Game Company in Japan has penetrated into almost every terminal distribution store, and it can basically put aside the intermediate distribution link and directly deliver goods directly to the owners of toys and game stores from the logistics and distribution center of Oriental Commercial Company.

"Yes, but the land area of the United States is much larger than that of Japan, and the population is relatively scattered. Because the cost is higher than the distribution system.

At present, Oriental Commercial implements a three-level distribution system in the North American market, and we ship goods to large agents at the state level, and then they distribute them to various small regional agents, and finally the small regional agents wholesale to terminal retail stores!" replied Han Peng.

"How many employees does Oriental Commercial have in the United States?" Li Xuan suddenly asked again.

Han Peng glanced to the side, and immediately someone replied respectfully, "Xiao Li Sheng." Mr. Han, we have a total of 77 employees in the United States and have set up six offices in the East and West of the United States!"

All the employees immediately gathered at the headquarters in Los Angeles. Another 30 people will be dispatched from Hong Kong to support!" Li Xuan immediately decided, Oriental Trading's U.S. headquarters is located in Los Angeles, "According to our database, we will immediately send people to visit the terminal retail stores throughout California in small groups one by one!"

Atari can only scare the middle distributors, but as long as there is a market for our consoles, they can't stop the owners of retail stores who want to make money from selling our consoles.

In order to reduce the concerns of retail store owners. Our conditions may as well be more generous, so that they can be sold free of charge, and after believing that our FC function can sell well and continue to earn profits for them. As long as we can conquer a part of the market, the intermediate distributors in that part of the market will definitely not be able to sit still, after all, no one wants to miss the opportunity to make money in vain!

As long as someone can't help but work with us, it's like dominoes. Atari's ban on us would collapse quickly! After all, if they did ban middlemen. It means giving up that part of the market to us!"

Oriental Game Company and Oriental Commercial acted quickly, including Li Xuan, Han Peng, Du Wenqiang and others flew to Los Angeles as soon as possible.

"Hey boss, is there that FC game console with an ad on TV?" A blond boy with a young face, accompanied by his father, walked into a toy store and asked the big-bellied boss impatiently.

"Sorry, kid, I don't have an FC console here, so why don't you give this Atari-2600 a try. It's also a very good gaming console, a staple of the Atari company. There are so many games to choose from, there are more than a hundred!" said the fat boss proudly, pointing to the various game cards hanging densely on the wall behind him.

The boy shook his head in frustration as he went to his grandmother's house with his parents for Christmas last year, followed his two cousins to a corner grocery store, and played Tank Wars on an arcade machine for the first time with a 25-cent coin. But the boy's father, a well-paid surgeon whose family lives in a middle-class affluent neighborhood in the eastern suburbs of Los Angeles, has no grocery stores or arcades around, giving him the opportunity to play that fun Tank Wars game all over again.

Not long ago, the boy finally saw the game "Tank Wars" on TV commercials again, so he begged his father to buy him an FC console as a birthday present. Father and son have run several game stores, but they have not been able to buy this heavily advertised FC console.

"Hey, everyone, are you talking about this game console?" At some point, there was another man in the store, holding a beautiful rectangular box, and the boy's eyes lit up.

"Hi, sir, your son is so cute!" The man greeted the father and son very warmly, "I am an employee of Oriental Game Company, this FC game console is our company's product, I'm very sorry, it has just started to be distributed, so you have been waiting for a long time!"

The man put the game box on the counter and opened the package very quickly, revealing the red and blue fuselage inside.

"This FC game console is divided into three parts: the console, the gamepad, and the number of wires!" the man turned his head and smiled at the game store owner, "Can you turn on the TV for this gentleman to try it out?"

The big-bellied boss didn't react to his self-cooked for a while, and habitually reached out and turned on the TV. The man quickly connected the number of jรน wires to the TV, plugged in the power plug, and then turned on the switch of the game console. The English logo of the oriental game company "EAST" soon appeared on the TV.

"This is the game card slot!" the man pulled out several boxes of game cards from his backpack, and the blonde boy immediately caught the box with the game image of Tank Wars printed on it. The man plugged it into the game console with great eyes, and soon the familiar background music and pictures of "Tank Wars" came from the TV, and he simply taught the father and son how to use the gamepad, and let them try it out by themselves.

"Hello, Mr. Jackson, I'm Josh, the sales representative of Oriental Games, is our company's GameBoy handheld game console selling well with you?" said Josh with a smile as he pointed to a GameBoy console in a prominent position in the glass window of the counter.

The big-bellied boss Jackson listened to his question, and the unhappy expression on his face finally retracted slightly, because the GameBoy console was selling very well.

"I'm sorry, I was a little self-conscious, but I'm sure you don't want to lose such a sincere customer, Boss Jackson!" Josh said softly, pointing at father and son.

"I'm not selling this FC console!" Jackson didn't understand what he meant.

"If you want, you're a distributor of the console now, and you'll be able to sell it in no time!" Josh said with a smile. (To be continued......)