"The wealth creation effect," Takuya Nakayama said, placing his cigar on the table. "Wall Street needs new stories, and we've provided the perfect template. Once the impressive returns of Sequoia and KPCB get out, capital that missed this train will be consumed by anxiety. They'd rather make a bad investment than miss the next Silicon Valley Online. Those people waving checkbooks around aren't buying technology; they're buying lottery tickets."
Frank drained his glass of water, pulled over a chair, and sat down.
"But this has also created problems for us. Headhunting firms are starting to circle our campus. Several core engineers in the Technical Department received poaching emails yesterday from other startups, offering substantial stock options."
"Some even offered a small supervisor in back-end maintenance the CTO position at a company that was only three days old."
"Give them raises. Release more shares from the option pool," Takuya Nakayama said without hesitation. "Use our current high stock price to retain them. Silicon Valley Online has no shortage of cash right now. However, instead of just defending, we should be taking the offensive."
He pulled open a drawer and handed a document to Frank.
"This is the acquisition list I gave you in New York. Execute it now."
Frank took the file and quickly flipped through it.
"These teams, which specialize in underlying communication protocols and data compression, were originally valued at around $2 million.
Given the abundance of hot money in Redwood City right now, they'll definitely try to inflate their prices. I checked yesterday; one five-person team working on communication encryption just quoted $2 million."
"Then we'll pay a premium. $3 million is fine." Takuya Nakayama crossed his hands on the table. "We'll acquire them using a combination of cash and stock. Tell them that owning shares in Silicon Valley Online is more secure than accepting checks from venture capital firms. VCs will demand performance clauses and try to interfere with operations, but we just want to integrate their technology into our ecosystem. We need to snatch up the best tech teams on the market as quickly as possible."
Tom's smile faded, and he sat up straighter.
"Takuya, the Board of Directors will likely resist such a high-premium acquisition. Although Donald and John publicly supported this in New York, when it comes to actually spending the money, VCs are shrewd. They'll worry we're overpaying and being taken for a fool."
"They have no reason to object," Takuya Nakayama said, standing up and walking to the window. He peered through the slats of the blinds at the bustling crowd below. "Sequoia and KPCB just launched new funds riding our coattails and are desperate for good acquisition targets. By acquiring this tech team, we're strengthening Silicon Valley Online's technological moat. The grander the narrative we weave, the more stable our stock price will be. Wall Street cares about the pace of expansion, not how much we spend in the short term. As long as our revenue continues to grow, this acquisition cost will look like a brilliant strategic investment on our balance sheet."
Frank closed the file, tapping his fingers twice on the cover.
"Understood. I'll have the Legal Department draft a letter of intent this afternoon. We need to secure the deal before those venture capitalists stuff their checks into these teams' hands. Using our stock as ammunition makes this war quite affordable."
"Act swiftly," Takuya Nakayama turned around. "The bubble has already inflated. Before it bursts, we must seize all the core assets we can. Let the investors scramble for those hollow shells with only concepts; we'll take only the teams with genuine technological foundations. These will become the cornerstones of our Portal."
Takuya Nakayama placed the unlit cigar back in its wooden box and turned to face Frank.
"Frank, have you been keeping up with America Online lately, especially their project called Neverwinter Nights?"
Frank paused for a moment, then searched his mental database for relevant information.
"You mean the graphical MUD on AOL? That thing's really taking off. Even though the graphics are so crude they look like a bunch of colored blocks, I heard the simultaneous online player count has already surpassed two thousand. For dial-up internet speeds, that's practically the limit."
Takuya Nakayama walked to the desk and pointed to a few venture capital business cards in the stack.
"Two thousand online players is considered a miracle by Wall Street. This shows the market potential is far greater than we imagined. If we're going to build an ecosystem, just chat and pets won't be enough. We need to keep those users online longer."
He paused, his tone calm.
"Contact TSR Corporation."
Tom, sitting on the sofa, looked up. "The guys who make Dungeons & Dragons? They're in deep trouble these days—their management is a mess, and their financials are, as far as I know, pretty bad. Are you after their licensing rights?"
"Precisely because their situation is dire, our checks will carry more weight."
Takuya Nakayama pulled out a chair and sat down. "I want to secure the exclusive game adaptation rights for DND. We'll create a 2D turn-based multiplayer online role-playing game based on its rules and setting."
He paused, then slowly spelled out the full name of the MMORPG.
"Massive Multiplayer Online Role-Playing Game."
Frank frowned, his fingers tapping unconsciously on his thigh. "2D? Isn't the current trend moving towards 3D? Sega's Jupiter and Sony's PlayStation are both aggressively promoting their 3D capabilities."
"That's for consoles," Takuya interrupted.
"What do most American netizens have in their hands right now? Mostly 486 machines, even 386s. With only 4MB or 8MB of RAM. If we aim for 3D, we'll exclude ninety percent of our potential users. A 2D turn-based system is the optimal solution given the current computing power. It doesn't require a powerful graphics card, places minimal strain on the processor, and most importantly, it's highly tolerant of network latency."
Tom chuckled, understanding the implication. "So you're saying that even if the internet speed is as slow as a snail, players can take their time during their turns without it affecting the game experience?"
"Exactly," Takuya Nakayama nodded. "Packet loss and latency are the norm in today's internet environment. Trying to create real-time combat would be a death sentence. We'll integrate this system with Silicon Valley Online's account authentication system. Users won't need to re-register; they can log in directly with their SV0L accounts, and the fees will be deducted from their monthly subscriptions or virtual wallets."
Frank pulled out his notebook and began taking notes.
"This kind of binding will greatly increase user retention. However, Takuya, you mentioned latency. While turn-based combat alleviates some of the issues, how do we handle disconnections? Current modems are too unstable; I get kicked offline all the time, even when writing emails."
"This is the core technology I want to discuss," Takuya Nakayama leaned forward.
"We need to develop disconnection recovery and disconnection management features. If a player disconnects during combat, the server shouldn't just kick them out. Instead, a pre-programmed AI will take over their character and complete the battle according to pre-set logic. When they reconnect, their character will be right where they left off."
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