Chapter 304: Arcade Industry Worries
Du Wenqiang was full of interest when he walked into Li Xuan's office, but he was depressed when he went out. The other people in the office area outside also obviously noticed that the situation was wrong, and the originally relaxed and warm atmosphere suddenly became a little more dignified.
It's been a long time since Li Xuan has used such a harsh tone to several executives. But as the so-called embankment collapsed in the anthill, he also found that the company had some bad signs recently, so he simply took this opportunity to establish his authority. Du Wenqiang is the old courtier who has followed Li Xuan for the longest time, even he was reprimanded, why do others think that they can sit back and relax.
Taking advantage of this opportunity, Li Xuan was ready to rectify the company's atmosphere. Although he strongly hopes to provide employees with a relaxed and comfortable working environment, they must wear formal clothes to work, and there is no need to distinguish between superiors and subordinates, but the premise of this qiē is based on the condition that work efficiency is not reduced.
Of course, Li Xuan unceremoniously beat Du Wenqiang just now, and he was also a little angry and helpless. As the so-called being prepared for danger in times of peace, as the company's senior management, we should always keep a cool head, and should not be blinded by some illusions in our judgment of the future.
Li Xuan has emphasized several times a long time ago that the boom in the arcade industry is not sustainable, but is just a flash in the pan, and Oriental Games needs to find new profit points.
In the past 1982 and the first quarter of this year, Oriental Games' arcade sales continued to maintain rapid growth, and the profit contribution accounted for half of the total profit of the entire game company. With such proud results, the leadership of Oriental Game Company, including Du Wenqiang, obviously warned Li Xuan repeatedly before. It's all in the ears!
At the beginning of this year, Li Xuan asked Oriental Commercial Company to do a detailed research on the arcade market in the United States. The report was sent to the desks of a group of executives at Oriental Games as early as last month. But they still didn't pay attention.
According to the analysis of this survey report, the total sales of arcade machines in the U.S. market last year were compared to the previous year. The growth rate is less than 10%. The arcade industry has only been developing for five years since it was officially detonated by Taito's "Space Invaders" in 1978.
Because of Apple computers, the arcade industry entered the personal computer market at about the same time as the rapid growth of the PC market, and last year's sales growth rate exceeded 60%. A sunrise industry like the computer market should be, and the arcade industry has only been experiencing sluggish growth after only five or six years.
According to the analysis of Oriental Shoji, an important reason for this situation is not because the arcade is not popular, but because the owners who operate the arcade are going bankrupt in large numbers. The U.S. economy experienced a severe recession last year, and the hardest hit was undoubtedly the small businessmen with small capital and low profit margins. And the grocery store owners and laundry owners who run the arcade machine. Most of them belong to this ranks.
They actually run arcade machines for profit, but arcade machines are just a little supplement to their main business. Once the main business that really determines their fate suffers a huge loss, even if the arcade can earn back some of the money, it is only a drop in the bucket, and it is still inevitable to close the door.
Some people say that since you can make money by running an arcade, why not open some special arcade halls. This has to do with the national conditions of the United States, which is sparsely populated and scattered, and the main consumer group of arcade machines is teenagers in the community. They can't drive dozens of kilometers just to play games for a few minutes.
Japan also experienced a recession last year, but the Japanese arcade sales industry, which relies on professional arcade game halls as its main market. But it has achieved rapid growth. Because of Japan's high population density, it is enough to support game hall owners in cities and villages to obtain a large number of customers. Relying on the arcade model, Japan's arcade industry has survived until the 21st century.
But the United States is different. Last year's recession has shown the strength of large companies in terms of cost control. The markets that were vacated after the closure of many neighborhood grocery stores were quickly taken over by large supermarket chains such as Wal-Mart.
The proliferation of large shopping supermarkets across the United States has further overstocked the living space of small stores such as grocery stores. So although the U.S. economy has been coming out of recession since the end of last year. However, the overall sales of the arcade industry still did not improve much.
The reason why Oriental Games Company has been able to achieve outstanding results is because of the excellent quality of its own games. As a result, it is competing with other arcade companies, rather than relying on the growth brought about by the expansion of the entire market. Therefore. The arcade industry in the United States may still have three to five years to go, but it will inevitably decline eventually.
And once the most important market in North America is lost, arcades can only be regarded as a piece of chicken ribs for Oriental Game Company. Although the size of the Japanese market is not small, it is still far inferior to the U.S. market. What's more, the Japanese market is far more xenophobic than the United States, and Japan itself is one of the main exporters of arcade machines, and the competition here is also the fiercest.
Arcade machines now account for half of the total profits of Oriental Games. Once this backyard is lost, the development of the Oriental Company will undoubtedly suffer a huge blow. The problem facing the management of Oriental Game Company is that it must find a new profit growth point before the arcade industry declines.
Oriental Game Company has almost achieved a comprehensive monopoly in the field of home game consoles and handheld game consoles. The profits of these two areas of Oriental Games will grow simultaneously with the expansion of the market, but they will not bring breakthrough changes to the entire company.
The only ones that can really take on this task are computer games that are just beginning to get started, and they still seem to be synonymous with crude and rudimentary. In later generations, computer games are the largest and most important component of the entire video game industry, with a global output of more than $100 billion.
The reason for the backwardness of the computer game industry is not only limited by computer performance, but also inseparable from the low capital investment. For example, the Oriental Games Company produces arcade games, and has a special set of customized computer development equipment, and the investment in this part alone is as high as tens of millions of dollars.
And "Genesis", which has left a glorious mark in the entire history of computer games, was originally made using Apple's Apple computer. With tens of millions of dollars on one side and Apple computers priced at less than $2,000 on the other, it's no wonder how different the effects of the games they make.
What's more, like the computer motherboards of arcade machines, are specially developed for game production, in order to stuff enough game content and achieve fast storage, dozens of memory chips are densely welded on the motherboard. In the early days of computer games, however, slow tapes and floppy disks were used to exchange data with computer CPUs, and the performance gap between the two was clear at a glance.
This is also an important reason why computer games are not taken seriously by mainstream game manufacturers, but Li Xuan is ready to change this status quo......!