Chapter 47

"Got it!" Cousins quickly figured out the reason, "Shall we sign the contract now?"

Since he had made up his mind, Cousins wanted to sign the contract as soon as possible to avoid any unforeseen circumstances, especially with David Rosen, that snake, still lurking in the shadows.

"Of course, I think Mr. Davis and the others will be greatly surprised later!" Li Xuan's face was full of a playful smile.

The exhibition organizer had specially set up a negotiation area for the exhibitors, and Oriental Electronics had rented a large meeting room. Before even reaching the door, Li Xuan heard the heated arguments inside.

"Haha, as long as we refuse, no matter how fun your game console is, it will only end up as a pile of scrap metal in the warehouse! My patience is limited, where is Li? You're not qualified, I want to talk to him personally!"

Li Xuan pushed open the door and first heard a brazen voice.

"Mr. Davis, please wait a few minutes. I'll sign the contract with Tony first, and then we'll discuss with you!"

The person who had been roaring loudly was the big-bellied Davis that Cousins mentioned. He was very fat, with a large, round belly.

Cousins followed Li Xuan into the meeting room, and immediately, all the other distributors' eyes focused on him. Their gazes were filled with confusion and more shock. Weren't they supposed to stand together?

Li Xuan whispered a few words in Liang Ning's ear, and Liang Ning quickly got up to bring two copies of the agreement, filling in the relevant terms according to the conditions previously agreed upon by Li Xuan and Cousins.

Li Xuan signed his name first, then passed the agreement to Cousins. After a quick review, he found no issues and signed his name as well. This was just a preliminary agency agreement; the formal contract would be signed the next day after both parties brought their lawyers to carefully review the terms and ensure there were no hidden traps.

"Shit, you Idaho bug!" The hot-tempered Davis, seeing that Cousins had betrayed their previous agreement, immediately pointed at him and shouted loudly before he could leave the meeting room.

"You fat pig!" Cousins replied with disdain.

"Alright, everyone! Mr. Cousins has made a wise choice first." Li Xuan clapped his hands and said, "Last night, the president of Sega, Nakayama, came to me to discuss the exclusive agency for two games. The conditions he offered were more favorable than those of everyone here.

But compared to Sega, I prefer to cooperate with all of you because I believe we have more common interests! I hope you will reconsider and make the right choice like Mr. Cousins!"

Li Xuan had never intended to cooperate with Sega because Sega would be the biggest obstacle for Oriental Electronics entering the American market. The birth of a new strong player was destined to step on the corpses of other competitors.

If Li Xuan wanted to expand into the arcade market, he would inevitably take away part of the market share that originally belonged to Sega. The two sides had irreconcilable conflicts. Previously, Li Xuan had rather convinced the printer manufacturer Epson to cooperate in producing the arcade version than to find Sega's factory for subcontracting, to avoid alarming the snake in the grass.

This sudden appearance of Oriental Electronics caught Sega off guard. But the old fox David Rosen still managed to easily incite the major North American distributors to join forces and pressure Oriental Electronics within a day.

He himself, however, secretly had Nakayama visit last night to offer Oriental Electronics better agency conditions, aiming to secure the North American agency rights for the two arcade games in one fell swoop.

Unfortunately, the methods David Rosen hastily arranged were not perfect. The well-established distribution channels of major game companies like Sega and Taito in the North American market could easily bypass primary distributors like Cousins and directly contact the secondary distributors, thus avoiding the dilution of profits by an additional middleman.

Therefore, there was a sharp conflict of interest between Sega and major arcade distributors like Cousins. Once Li Xuan revealed that Sega was preparing to compete for the agency rights, distributors like Cousins, who were already on edge, quickly submitted, indirectly accelerating the negotiation process for Li Xuan.

Upon hearing that Sega was also preparing to compete for the agency rights, the other major distributors immediately became restless. None of them were fools; they quickly understood David Rosen's scheme. While inciting them to pressure Oriental Electronics, he was secretly making his move, which infuriated them.

With Cousins as an example, the others soon followed suit. Using the agreement Li Xuan had just signed with Cousins as a template, the factory price for Oriental Electronics' arcade machines entering the North American market was set at $1,800 per unit for "Tank Battle" and $1,200 per unit for "Hong Kong Block."

The reason "Hong Kong Block" was priced lower than "Tank Battle" was not because the game was inferior. It was because its game pace was slower, and the coin consumption rate was far lower than that of "Tank Battle," which had a two-player mode. A slower coin consumption rate meant less profit for arcade owners, so the price was naturally lower.

Davis, like Cousins, had his own arcade assembly factory. Instead of signing a whole-machine procurement agreement with Li Xuan, he planned to purchase the arcade boards and assemble them himself. The motherboard for "Tank Battle" was $1,500 per unit, and for "Hong Kong Block," it was $1,000.

In fact, the price of Oriental Electronics' arcade boards was relatively high compared to the whole machines. After Davis purchased the boards, including the costs of the cabinet, display, and labor, the actual factory cost was not much cheaper than directly purchasing from Oriental Electronics.

However, Oriental Electronics' arcade production capacity was limited. According to Li Xuan's previous estimates, the factory could produce about 4,000 arcade machines per month. Although recruitment had started in Hong Kong, it would take several months for the production capacity to surge.

In the two hours after signing the contract with Cousins, Li Xuan had already signed agreements with other distributors, totaling over 30,000 units. Seeing this situation, Davis decisively chose to purchase the arcade boards and produce them himself.

This also showed from another angle how excellent "Hong Kong Block" and "Tank Battle" were. These game distributors and retailers handled dozens to hundreds of new games each year, and none of them lacked a keen eye.

They dared to place large orders because they saw the promising prospects of these two games. A sales volume of 10,000 units for an arcade game was already considered good, and breaking 50,000 units was considered a hit. The initial orders for "Tank Battle" and "Hong Kong Block" were 20,000 and 10,000 units, respectively.

These were the distributors' own judgments before the games had been tested by the market. Once the first batch of game machines hit the market and sparked a player frenzy, subsequent orders would flood Oriental Electronics like snowflakes.

PS: During the holiday, updates may be unstable. Ski's hometown has no internet, and after not returning home for over half a year, there will be many family visits and gatherings. If I can't guarantee two updates a day, please bear with me. I will catch up after the holiday! Please give me recommendations and collections! =￣ω￣=

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