Chapter 169 - Prohibition of Sales
Atari-2600 is now the undisputed hegemon of the North American home console market, with sales in the U.S. exceeding 3 million units last year. Of course, his supremacy has not been without challenges, such as Philips' Osced 2 console that entered the US market, and Matttel's IntelliVision console.
In particular, the latter's hardware performance is higher than 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 game consoles swept the newspapers and television in the United States, 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 was put on the shelves, the technical department of Atari got back several prototypes for complete disassembly. The results were frustrating, and although the FC was an 8-bit machine, the performance was very good, much better than Atari's staple Atari-2600.
When the head of Atari's technical department reports to CEO Ray Casal. There was a look of frustration on his face: "This group of Hong Kong people is incredible, how can they have the cost so low? Just a piece of PPU (image control device) on a game console costs 10 dollars." And they only have $100 for outgoing shipments, which is almost unprofitable!"
Good gaming performance is backed by better hardware. 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 in line with Atari's, which is $199. Although the IntelliVision console launched by Mattel has good hardware performance, it is priced at a whopping $299, which is not very competitive.
However, the FC machine of Oriental Games Company is different, not only is it priced the same as the ATARI-2600, but the games released at the same time are the last popular arcade games of the moment, which makes Ray Casal instantly receive a huge threat. In fact, Casal didn't even need to report with his technical director, he tried it out himself on an FC console for a few minutes. It was immediately known that the mortal enemy of Atari had appeared.
"We have to develop a new game console that can match 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, as president of Atari, had to fight for the precious three months for the R&D department. Otherwise, before the new game console of the relay is launched, the ATARI-2600 is likely to be defeated by the FC game 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 to all dealers who distributed Atari consoles, and the Atari-2600 and FC consoles could only be chosen, and anyone who distributed FC consoles would be blacklisted by Atari.
On one side is a new console that is just getting ready to hit the market. On the other hand, there are best-selling star products that can sell millions of consoles and tens of millions of game cartridges every year, and most dealers do not hesitate to choose Atari. As a result, distributors who also distributed Atari game consoles, after Atari issued a ban on FC game consoles, called Oriental Games to terminate the previously signed supply agreement.
A conference room for Oriental Games in Hong Kong. More and more information has been sent back from the United States, and it has been determined that Atari is behind the collective termination of the sales contract between the distributors and Oriental Games. Distributors who opted out accounted for 70% of all distributors. If Oriental Games does not take immediate remedial action, FC consoles may not be on the shelves in most of North America.
"Xiao Li Sheng. I feel that the reason why the distributor chose Atari over us is other than the reason why the Atari-2600 is selling well right now. The lower profit margin on the sale of 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 process, agents at all levels make at least 10 US dollars more from selling Atari's game machines than from selling our FC machines!"
"What you said is all minutiae, the key now is how to solve the current problem!" Li Xuan said with a stern face, "Brother Peng, when 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 77 employees in the U.S. and six offices in the U.S. East and West!"
All the employees immediately gathered at the headquarters in Los Angeles. Another 30 people will be sent from Hong Kong to support!" Li Xuan immediately decided, the U.S. headquarters of Oriental Commercial is located in Los Angeles. "According to our database, we immediately sent people in small groups to visit the terminal retail stores throughout California 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, we may wish to open more generous conditions, so that they can sell without payment first, and then settle the payment in the normal way after believing that our FC machine 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 soon as someone can't help but cooperate with us, like dominoes, Atari's ban on us will quickly collapse! After all, if they really ban the 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 that is advertised on TV?" A blond boy with a young face, accompanied by his father, walks into a toy store. Can't wait to ask the big-bellied boss.
"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 console. Atari's flagship product, there are a lot of games to choose from, there are more than a hundred!" the fat boss pointed to the various game cards hanging densely on the wall behind him. Said proudly.
The boy shook his head in frustration as he went to his grandmother's house with his parents for Christmas last year. I followed the two cousins to a grocery store on the corner and played Tank Wars on an arcade machine for the first time with a 25-cent coin. But the boy's father was a well-paid surgeon. His family lives in an affluent, middle-class neighborhood in the eastern suburbs of Los Angeles, and the lack of grocery stores and arcades around gives him a chance 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 been to several game stores, but they have not been able to buy the FC console that is being advertised so much.
"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 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 game controller, 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, pointing 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......)