Ken Kutaragi leaned back against the chair and let out a long sigh.
Before the release of the PlayStation, he had drunk until he vomited at a restaurant in Akasaka, promising the Consumer Electronics and Audio/Video divisions that the next-generation console would adopt the DVD standard in exchange for their support of the PS price reduction proposal at the board meeting.
Now that the DVD standard had been established, the vision he had painted had become tangible profit.
"What did Director Iwata say?" Ken Kutaragi asked.
"He was very pleased." Norio Oga struck a match and lit his pipe. "The Consumer Electronics division has secured the rights to set the standard, and the future patent royalties will be a massive sum. At yesterday's management meeting, Iwata surprisingly praised the Electronic Entertainment division, saying that your contributions to advancing the group's optical storage strategy were indispensable."
Ken Kutaragi scoffed.
Praise gained through political compromise sounded truly grating.
But he understood that this praise meant the PS project's political standing within Sony would be relatively secure for a considerable amount of time.
Thanks to Sony Computer Entertainment's support for the Consumer Electronics Division in terms of technical standards and promotion for the DVD industry, the relationship between Sony Computer Entertainment and other departments within the group had eased somewhat.
"It's not just the Consumer Electronics Division," Norio Oga said, exhaling a puff of blue smoke. "Columbia Pictures has also sent over a proposal for cooperation."
Kutaragi straightened up.
Columbia Pictures had always been a financial black hole for Sony Group, and a ready excuse for conservatives to attack new businesses.
"Those people in Hollywood are very interested in the capacity of DVDs," Oga explained. "4.7GB of storage space is enough to fit an entire high-quality movie, plus multi-language subtitles and special features. Columbia Pictures intends to digitize all the old films in their library and release them on DVD."
Nobuyuki Idei spoke up: "They need a playback terminal. Initially, the price of DVD players from the consumer electronics division will undoubtedly remain high. Columbia Pictures hopes that future PlayStations will be equipped with the ability to play DVD movies, acting as a ubiquitous terminal to boost the sales of movie discs."
Ken Kutaragi tapped his fingers on the table.
Combining a game console with a media player was not technically difficult; it just required adding a decoder chip and the corresponding optical drive control software.
Coupled with the increasingly close ties with Columbia Pictures, internal resistance within the group would diminish.
"Very well," Kutaragi agreed readily. "For the next generation of consoles, I will make DVD playback a standard feature. If they are willing to provide the funding, we could even develop an external VCD playback module for the current PlayStation as a test."
Norio Oga nodded, satisfied.
Easing internal conflicts was more important than anything else.
The consumer electronics division wanted to sell hardware, the film division wanted to sell content, and the electronic entertainment division wanted to sell game consoles.
The DVD had become the tie that bound these three departments—which had originally looked down on each other—onto the same chariot.
A few days later, a small-scale celebratory reception was held within the Sony Group.
The venue was a high-end French restaurant in Ginza.
Director Iwata, holding a glass of red wine, took the initiative to walk over to General Manager Kutaragi.
"General Manager Kutaragi," Iwata raised his glass, "I heard your PS is selling quite well at the end of the year."
"Thanks to the Consumer Electronics Division making concessions on component procurement," Kutaragi said, clinking his glass against Iwata's.
He wasn't good at this kind of socializing, but he still had to say the polite things.
Iwata took a sip of wine and lowered his voice: "When needed, the Consumer Electronics Division will prioritize supplying you with DVD decoding chips. If the finance department gets difficult about funding for the next-generation console's R&D, you can come directly to me."
Kutaragi was somewhat surprised.
Previously, Iwata had been the one clamoring to dismantle the Electronic Entertainment Division and sell it for scrap.
Binding interests together was more effective than any sentimentality.
"Thank you," Kutaragi drained his glass in one gulp.
In a corner of the reception, Nobuyuki Idei was holding a plate of oysters, watching this scene.
Kutaragi walked over, took an oyster from the plate, and downed it in one go.
"How does it feel?" Idei asked.
"Like acting in a play," Kutaragi said, wiping his mouth with a napkin. "But not having to watch my back for knives means I can save a lot of energy to deal with Sega."
Idei put down his plate. "Sega's 9 million units sold is a big problem. Third-party manufacturers are fence-sitters; they go wherever the install base is higher. Square and Capcom have already put their main projects on the Jupiter. We don't have many cards left in our hand."
Kutaragi gave a cold snort.
"If Sega can buy third-party developers, so can we," Kutaragi said, looking at the crowd in their finery. "We have money now. Since neither consumer electronics nor Columbia Pictures are dragging us down anymore, that money can be poured entirely into our game lineup."
"What do you plan to do?"
"Poach," Kutaragi said, spitting out the word. "Sega gave up December, which seems generous, but they're actually forcing third-party developers to compete among themselves. Those small and medium-sized manufacturers who didn't get good results in the year-end sales battle are now worrying about development funds for next year. We'll go and send them money."
Idei Nobuyuki pondered for a moment: "Small and medium-sized manufacturers alone can't hold up the facade. We need flagship titles capable of rivaling *Resident Evil* and *Sakura Wars*."
Kutaragi Ken pulled a business card from his pocket and handed it to Idei Nobuyuki.
The card read, "Enix Corporation, President, Keiji Honda."
"With Square leaning towards Sega, Enix is having a tough time," Kutaragi Ken analyzed. "The development cycle for *Dragon Quest* is getting longer and longer; they need a platform that can consistently generate profit. Nintendo's N64 insists on using cartridges, which have low capacity and high costs. Even though Enix's top management is close to Nintendo, the lower levels have long been full of complaints."
"You want to pull *Dragon Quest* to the PS?" Idei Nobuyuki raised an eyebrow. This was, after all, Japan's national RPG.
"You never know until you try." There was a glint of ruthlessness in Kutaragi Ken's eyes. "If Nakayama Takuya dares to take *Final Fantasy*, then I dare to go after *Dragon Quest*. Tell the finance department to get the checkbook ready. The second half of the console war is all about who dares to spend more money."
It was mid-January in Tokyo, and a biting wind was howling.
Inside the Sega Headquarters building, the heating was in full effect. The temperature in Takuya Nakayama's office was pleasant—perhaps even a little too cozy, bordering on soporific.
Hisao Oguchi pushed the door open and walked in, clutching a document he had just torn from the fax machine; the edges of the paper were still slightly curled.
He walked over to the desk and handed the document over.
"A briefing just sent in from the North American branch," Hisao Oguchi said, pulling out a chair and sitting down. "It's about Atari."
Takuya Nakayama picked up the paper.
It contained only a few lines of text, yet they heralded the complete demise of a former industry giant.
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