Just when the Oriental Research Institute set off a frenzy in the Hong Kong capital market, the listing journey of Oriental Games Company on the New York Stock Exchange also caused a huge sensation.

As for the overall valuation of Oriental Game Company, the final negotiated price between Li Xuan and Goldman Sachs is $27.5 billion, which is slightly lower than that of Oriental Research Institute. Judging from the pre-tax annual profit of the two companies alone, the Oriental Research Institute is as high as 3.27 billion US dollars, which is 1.4 billion US dollars higher than the 1.865 billion US dollars of Oriental Games.

However, the company's valuation is affected by many other aspects in addition to the impact of revenue levels, profitability and other data. For example, the valuation level of the Oriental Research Institute is obviously low, which is limited by the overall size of the Hong Kong securities market on the one hand, and on the other hand, it is also due to the will of Li Xuan, the absolute controlling shareholder.

You must know that even so, the market value of a company in the Oriental Research Institute has accounted for one-fifth of the total market value of all listed companies on the Stock Exchange. If the proportion of the Oriental Research Institute continues to increase, the Hang Seng stock index, which reflects the rise and fall of the Hong Kong stock market, does not need to continue to be counted, just look at the market of a stock of the Oriental Research Institute.

The reason why most newly listed companies want the higher the initial valuation is better, is because they hope to raise enough for the company to develop so far at one time through listing and financing. The Oriental Research Institute itself is not short of money, and the high valuation will only bring higher pressure on business performance, but the gains outweigh the losses!

After all, after the Oriental Research Institute was listed, it changed from a private enterprise decided by Li Xuan to a public company. Although Li Xuan is still the majority shareholder with an absolute controlling position in the company, he cannot completely ignore the voices of other minority shareholders.

The situation of Oriental Game Company is different from that of Oriental Research Institute. Although the company itself is also not short of money, Li Xuan, the major shareholder, is very short of money. He had previously acquired Hilson-Lehman from Amex, but he was saddled with a huge debt of up to $8 billion, and this time he wanted to use the IPO of Oriental Games to cash out part of the equity to pay off the debt.

In fact, it can also be seen from this point that the status of the Oriental Research Institute and the Oriental Game Company in Li Xuan's heart is still different. Even if Li Xuan is short of money, he is unwilling to raise funds by reducing his shareholding in the Oriental Research Institute.

Oriental Games is different, and its biggest mission was to serve as a cash cow to provide sufficient funds for the rapid expansion of the Oriental Group. After more than ten years of development, Oriental Group has passed the initial period of thirst for funds, and there is no need for Oriental Games to continue to provide huge cash flow.

But the role of Dongfang Game Company in Li Xuan's eyes has not changed, and it is still responsible for providing him with funds. It's just that this time it's no longer through business operations, but through equity flows.

Therefore, Li Xuan naturally wants to do his best to blow up the valuation of Oriental Game Company, so as to exchange the least amount of equity for enough funds. In fact, if you look at the profitability of Oriental Games alone, it is not very reluctant to support a valuation of $27.5 billion. But the weakness of Oriental Games is that it is a typical asset-light enterprise, and its core asset is the copyright of the best-selling games.

But the gaming market is actually a very competitive industry, and no one can be sure that the next game they develop will be sought after by players. If Oriental Games loses several of its main products in a row, its current position as the world's largest game maker will be shaken immediately.

In contrast, the Oriental Research Institute, which is also an asset-light company, has far fewer challenges to face. Its core business, the ERM processor, has actually completely monopolized the entire personal processor market, and it is impossible for any competitor to pose a threat to it in the short term.

Other fields such as liquid crystal technology and mobile communication technology also have high capital and technical thresholds, coupled with the pioneer of the Oriental Research Institute, which continues to use technology patents to set up more and more barriers, so that the difficulty of other competitors to follow up is also expanding.

But the gaming industry is a creative industry, and it's not impossible for a garage business with a few employees to develop a game that sells millions of copies with a good idea.

Therefore, if Oriental Games wants to improve its overall valuation, the most important job is to eliminate investors' worries about the uncertainty of the company's future development!

Throughout the 80s, the three main businesses of Oriental Games were arcades, handheld game consoles, and home TV game consoles.

Among them, the arcade business was the most important source of profit for Oriental Games in the early days, but with the change of retail methods in the United States, the largest export market, a large number of community laundries and grocery stores that can provide terminal business premises for arcades have disappeared, and the annual sales of arcades in the United States have shrunk seriously.

Although Oriental Games is also actively exploring new terminal sales venues such as movie theaters and supermarkets in the United States, as well as entering emerging markets such as South America, Asia, Africa and Eastern Europe, the annual revenue of its arcade business is still a quarter lower than the peak in the mid-80s, and the pre-tax profit is even less than a third.

The rapid growth of revenue and profits of Oriental Games in recent years is actually mainly due to the rapid growth of Game-Boy series handheld game consoles and FC series home TV game consoles around the world.

However, whether it is in the field of home consoles or handheld consoles, after nearly ten years of expansion, Oriental Game Company has not only occupied a dominant position in the global market, but also established a complete game access and distribution system, which is difficult to bring investors a breakthrough sense of surprise! Therefore, Oriental Game Company needs to enter a new blue ocean - the computer game market, in order to provide investors with sufficient imagination space for the future.

After nearly 15 years of rapid development, the global computer industry has provided sufficient support for the rise of computer games, both in terms of performance and overall ownership. As early as five years ago, the Oriental Game Company used a sensational "Lord of the Rings 1" to establish its position as a high-end manufacturer in the computer game market in one fell swoop.

What Oriental Games is best at is to promote a game on all platforms to maximize profits. For example, the early "Pokemon" was originally a handheld game, but it also achieved good sales in the home console and computer software markets.

The Lord of the Rings series is no exception, and a year after the release of the PC version of The Lord of the Rings 1, the Lord of the Rings series has also begun to enter the home TV game market with the overall improvement of the configuration level of the new generation of FC home game consoles.

Therefore, Oriental Games wants investors to fully realize that the computer game market is a new market segment full of potential, and it also needs a new game that can fully demonstrate the differences of the computer platform!

Just three months before the IPO of Oriental Game Company, a new series of games quickly swept the American game market, which not only announced the arrival of a new era of computer games, but also set off a new wave of American network technology!