Nobuyuki Idei's office layout was completely different from Norio Ohga's.
There were no pretentious antique ornaments here, nor any leather sofas for idle chatter.
The entire space was filled with cold, metallic lines, and the large desk was piled high with various financial reports.
When he knocked and entered, Idei was staring at a financial restructuring plan for the North American branch.
Not long ago, this newly appointed president had just kicked Ohga's right-hand man, Schulhof, to the curb and taken full control of the North American operations.
"General Manager Kutaragi," Idei said without looking up, his fountain pen scratching against the paper, "isn't the evaluation meeting for the new console architecture scheduled for tomorrow afternoon? What brings you here?"
"The meeting has been postponed. There's an unexpected situation I need to report to you." Ken Kutaragi walked over to the desk and handed him the North American market weekly report.
Idei took the report, his eyes quickly scanning the sales figures.
"Capcom?" Idei had some recollection of the name. "A zombie-themed game that sold 100,000 copies in three days; these are impressive numbers. And then?"
Ken Kutaragi cleared his throat.
He had already rehearsed what to say next in his mind several times.
He absolutely could not use the same rhetoric with Nobuyuki Idei that he used with Norio Ohga.
Ohga valued the expansion of Sony's entertainment empire, whereas Idei valued the group's overall financial health and the efficiency of resource integration.
"Capcom's subsequent rush order of 300,000 units went to Sega's Tijuana factory," Ken Kutaragi got straight to the point. "Our DADC factory was fully booked and couldn't take on this order."
Nobuyuki Idei stopped his fountain pen and looked up at him.
"I've heard of that contract manufacturing plant Sega set up on the North American border. They earned the manufacturing fees, which is indeed a pity. But that isn't worth you making a special trip here."
"The manufacturing fees are just a small part of it," Ken Kutaragi pulled out a chair and sat down. "The key lies in the market potential shown by Resident Evil. This kind of survival horror game is extremely popular in the European and American markets. If Capcom leans entirely toward Sega, PlayStation's install base in North America will be severely impacted. I intend to go to Osaka personally and convince Kenzo Tsujimoto to port the game to PlayStation as soon as possible."
Nobuyuki Idei had some impression of that name. "A zombie-themed game that sold 100,000 copies in three days; that data is quite impressive.
And then?"
Ken Kutaragi cleared his throat.
Nobuyuki Idei folded his hands on the desk, scrutinizing the technical executive before him.
"What conditions do you plan to offer?"
Idei asked the core question.
Nobuyuki Idei sat with his hands crossed on the desktop, scrutinizing the technical director before him.
"What conditions are you proposing?" Idei asked, getting straight to the core of the matter.
"A tiered reduction in royalties and maximum discounts on disc manufacturing costs." Ken Kutaragi played the trump card he had just secured from Ohga, but immediately pivoted to add a chip tailor-made for Idei. "Furthermore, I want to mobilize the group's distribution channels in Europe and open them up fully to Capcom."
Idei narrowed his eyes.
"European channels?"
"Yes," Kutaragi explained. "Capcom's distribution network in Europe is very weak. If we can shore up this shortcoming for them, they will have no reason to refuse. From the group's perspective, Columbia Pictures' offline audiovisual stores and promotional networks in Europe are currently semi-idle. Getting PlayStation games into them won't just spread out the stores' operating costs; it will also drive sales of DVD players through the games. This is a low-cost way to revitalize cross-departmental resources."
These words struck a chord with Idei.
Since taking office, he had been committed to breaking down the silos that kept Sony's various departments operating in isolation, pushing for a multimedia strategy.
This kind of cross-departmental collaboration proposed by Ken Kutaragi was exactly the kind of achievement he most wanted to see.
"Have you reported this to Chairman Ohga?" Idei suddenly asked.
Kutaragi felt a jolt inside, though he kept his expression calm.
"I went to the top floor just before coming here," Kutaragi did not hide it; such things couldn't be kept secret anyway. "The Chairman has agreed to make concessions on royalties."
Idei smiled.
The laughter was short and sharp.
"He only cares about giving orders, not about the financial bottom line," Idei said, taking an internal memo pad and scribbling a few lines. "Royalties can be lowered, and manufacturing costs can be reduced. But the promotional expenses in Europe cannot be fully covered by the Electronic Entertainment Division. Make Capcom bear half of it. The group's distribution channels are not for charity."
He handed the memo to Kutaragi.
"Take this to the Finance Department. As for the connection with European channels, I will have the person in charge at Columbia Pictures assist you," Idei said, dismissing him. "Go to Osaka and negotiate well. Don't let Sega take all the advantages."
"Understood." Ken Kutaragi took the note, stood up, and took his leave.
Walking out of the president's office, Kutaragi tucked the note into his pocket, his back already dampened with a thin layer of sweat.
Having to say the same thing in a different way, all while carefully balancing the demands of two big bosses.
Ohga wanted face and strategy; Idei wanted substance and control.
Being caught in the middle was far more agonizing than pulling an all-nighter debugging code.
He walked to the elevator and pressed the down button.
The stainless steel elevator doors reflected his somewhat weary face.
Back when he was in R&D, his greatest enemies were merely technical problems.
Now, his greatest enemies had become interpersonal relationships and factional struggles.
A tech-savvy engineer like him had been forced to become a diplomat, maneuvering between various power brokers.
The elevator chimed, and the doors slid open.
Kutaragi stepped inside.
Complaints aside, the work had to go on.
As long as he could push PlayStation to the pinnacle of the industry, as long as he could suppress Sega, he would hold his nose and endure all this messy office politics. After all, PlayStation was his child.
The Shinkansen "Nozomi" pulled out of Tokyo Station.
The carriage was very quiet.
Ken Kutaragi sat by the window, watching the buildings receding rapidly outside.
The edges of the note in his pocket felt sharp against his skin.
That was the bottom line written in Nobuyuki Idei's own hand.
He had prepared three different strategies for his meeting with Kenzo Tsujimoto in Osaka.
Capcom was not Enix.
Enix followed an asset-light model, relying on external outsourcing.
Capcom had its own complete industrial system, its own optical disc pressing plant, and a massive development team.
The approach of throwing money around and using turnkey outsourcing contracts would not work here.
Two hours later, the train pulled into Shin-Osaka Station.
Capcom's headquarters was located in the Chuo Ward.
It was an office building with a conventional exterior.
Walking into the lobby, employees hurried back and forth.
The phones at the reception desk rang incessantly.
Kutaragi's assistant announced their names.
The receptionist led him to the president's office on the top floor.
The door opened.
Kenzo Tsujimoto was sitting behind a large desk.
Several stacks of sales reports from North America were piled on the table.
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