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Chapter 313 - Chapter 305: EA

As Hollywood's most closely watched rising star, Daenerys Entertainment's move into video games had been a media focal point from the very beginning. In Forbes' September issue, in the notes under Simon's personal entry on the list of the 400 richest Americans, Blizzard Studios was even singled out by name.

Since its debut in 1984, Ninja Turtles had quickly become a sensation. When the game adaptation was officially announced in February of this year, some magazines immediately tagged it as one of the most anticipated video games of the year.

However, Blizzard's ARPG version of Ninja Turtles had taken a full eight months to develop, far longer than the typical three to five month development cycle of games in this era.

By the time the outside world had almost forgotten about it, Nancy finally launched the promotional campaign for Ninja Turtles in October.

Thanks to the string of miracles Daenerys had pulled off in recent years, anything the company touched seemed to come with a built‑in halo that automatically drew media and public attention, and that gave Ninja Turtles a huge advantage in marketing.

On the back of a wave of spontaneous media coverage, Ninja Turtles achieved results with a modest one million dollar marketing budget that other companies might not have gotten with five million.

By the time the game officially hit shelves on November 3, Ninja Turtles was already known to virtually every gamer in the U.S. and Japanese markets.

Before launch, the New York Times had likened Ninja Turtles to "Atari's E.T. the Extra-Terrestrial" for Blizzard.

The notoriously awful quality of the E.T. game had triggered the infamous "Atari crash," yet it had still sold 1.5 million copies at a best‑seller level, riding entirely on the back of the movie's global box office success.

As for Ninja Turtles, the New York Times concluded that, given the attention it enjoyed by virtue of Daenerys Entertainment's brand alone, there was almost no way for it to fail commercially. The only question was how much money it would make. But if players rejected it, if it suffered the same kind of savage reviews that E.T. had, the halo would vanish. After that, Daenerys would find it extremely difficult to gain a foothold in the video game industry.

Simon and Nancy both understood the logic perfectly. Otherwise, Blizzard's first game would never have been subjected to such brutal perfectionism, spending eight months being polished.

Under intense scrutiny from all sides, the ARPG version of Ninja Turtles launched simultaneously in the U.S. and Japan on November 3.

The first shipment was 100,000 cartridges. The price was 60 dollars in the U.S. and 7,000 yen in Japan.

To maximize buzz, Simon had quietly pulled strings through Australia to secure the November cover of Nintendo's official magazine, Nintendo Power, for the Ninja Turtles game.

Over the next few days, as the media hotly debated Simon Westeros' Boeing 767 private jet, reviews for Ninja Turtles also started to roll out.

On its ten‑point scale, Nintendo Power gave the game a strong score of eight. The Daenerys PR push no doubt helped, but Nintendo's official endorsement of the game was beyond question.

Most of the other professional gaming magazines also rated it in the "excellent" range.

Criticism was, of course, inevitable.

Japanese magazine Famitsu accused Ninja Turtles of copying many details from Nintendo's The Legend of Zelda II and Konami's Getsu Fūma Den.

Zelda II and Getsu Fūma Den were both side‑scrolling ARPGs released a few years earlier, and the first Ninja Turtles game was also a side‑scrolling ARPG.

When Simon drafted the initial design based on his memories of Konami's version, he had indeed told the team to study Zelda II, Getsu Fūma Den, and several other famous side‑scrolling ARPGs, but only as reference.

Even if the Blizzard team had wanted to straight‑up copy them, Nancy, who had kept a very close eye on the project from start to finish, would never have allowed it. Side‑scrolling games had already flooded the market in recent years; hits like Contra and Super Mario Bros. were all side‑scrollers. In that context, Famitsu's accusation barely mattered.

Sales data for games was nowhere near as timely as box office numbers, especially when a title launched simultaneously in both the U.S. and Japan.

Even so, in the week from November 3 to November 9, the original 100,000 cartridge run sold out rapidly, and Daenerys Entertainment urgently placed an additional order with Nintendo for 200,000 more.

On November 13, the first week's official sales figures for Ninja Turtles came out. Combined sales in North America and Japan totaled 263,000 units, for revenue of 15.7 million dollars.

Compared with movie box office curves, video game sales followed a pattern closer to music albums, with much longer legs.

First‑week sales of 263,000 units did not break any records; several top games had moved 400,000 or 500,000 copies in their debut weeks. But those were almost all second or third entries in established franchises. Ninja Turtles was a first‑generation title.

Given the game's quality and word of mouth, its first‑week 263,000 start made it easy to project total sales of four to five million units over the coming year. At five million units, it would fall short of the Super Mario series' insane tens‑of‑millions numbers, but it would still rank as a phenomenon in its own right.

Sales numbers were a direct expression of market approval. Daenerys immediately poured in additional resources for a second wave of large‑scale promotion, further raising the game's visibility and inevitably driving Ninja Turtles sales even higher.

Phenomenon‑level hits usually enjoyed very long life cycles.

So on the strength of this single game, the ensuing sequels alone would be enough to keep Blizzard Studios fed for at least five years. That also meant Daenerys Entertainment had secured a firm foothold in the video game market in one stroke.

Daenerys Entertainment headquarters.

It was Wednesday, November 15.

In the conference room, Nancy was already planning the next phase of Blizzard's expansion off the back of Ninja Turtles' success.

"A 60 dollar cartridge gives us a gross margin of about 30 percent. Capcom and a few others who can manufacture their own cartridges and enjoy a royalty discount from Nintendo are hitting margins as high as 50 percent. Even so, just on Ninja Turtles alone, first‑week sales of 263,000 units have already recouped almost all of Blizzard's investment for the past half year and left us with two million dollars in net profit. Over the next year, we're looking at around 100 million dollars in net income from this game.

"My next move is to expand into PC games. Starting from scratch would be too slow. Now that we've gotten to know the industry, I want to grow through acquisition."

Before Simon could speak, Amy, who had also taken on a lot of work recently, asked, "Nintendo is extremely protective of its exclusivity. Nancy, how do you plan to deal with that?"

Nintendo essentially dominated the console market at this point. The Famicom had over 90 percent market share in both Japan and the U.S., and the company was at the peak of its power. It would ban even its closest "big six" partner studios at the drop of a hat, let alone second‑ and third‑tier developers.

Nancy had clearly anticipated the problem. "We can structure the PC game division as a separate operation, with no overlap with Blizzard. We also will not work with Sega, Atari or any of Nintendo's direct competitors. After we acquire a PC game developer, we can even port some of its best titles to Nintendo platforms. That will go a long way toward easing Nintendo's hostility."

Amy obviously did not agree and turned to look at Simon.

With Ninja Turtles' stellar performance, she did not see any need to rush into PC games.

In this era, PC gaming was still far smaller than the console market. If their push into PC angered Nintendo and Blizzard became a target, the loss would outweigh any potential gain.

Simon did not believe the overbearing Nintendo would tolerate Daenerys "two‑timing" it either. But he had no intention of chaining Blizzard to a ship that had already passed its peak and was starting its long decline.

"Got a target in mind?" he asked.

Nancy nodded and handed a dossier to both Simon and Amy. "Electronic Arts. EA. A game developer headquartered in San Francisco, founded in 1982. They started out making games for the Atari consoles. After Atari's collapse, EA shifted its focus to PC games. Over the years they've built up a stable of very successful sports franchises."

Simon flipped through the file, once again impressed by his petite executive's eye for opportunity.

EA.

For all its later reputation as a "studio killer," EA was one of the largest game developers and publishers Simon remembered, its peak market cap once approaching 50 billion dollars.

Noticing the brief flicker of amusement in Simon's expression, Nancy went on. "EA went public just a month ago, then ran straight into the October 13 crash. Their current market cap is 170 million dollars, with a P/E of thirteen. If we make a friendly tender offer and they are willing to talk, 300 million should be enough to buy them. EA's performance has been excellent in recent years. Any acquisition price under a twenty‑five times earnings multiple is acceptable."

Simon asked, "And if they turn down a friendly offer, or a rival bidder suddenly shows up?"

"In that case, we can bump our bid by another 50 million."

"Then that's that. You get a budget of 350 million. Take the company," Simon said without any hesitation. Then he looked to Amy. "You two work out the details yourselves, and you can bring Jim in if you need him. Jenny and I are heading to Europe this weekend. After that I'll be stepping back from company affairs for quite a while. Don't let me down."

Amy and Nancy both already knew about Simon's plan, and both, almost in unison, believed there was no way their boss would truly ignore the company for long.

Old habits die hard.

A control freak saying he is not going to control the company anymore.

Who would believe that?

So neither of them objected to Simon's plan to "take an extended vacation."

When the meeting wrapped up, Amy and Nancy went off to their respective tasks, and Simon headed to the casting session for the male lead in Misery.

In the original film, the leads had been James Caan and Kathy Bates, and Bates had won the Best Actress Oscar for the role.

This time, however, Simon did not intend to bring back the original cast.

He had seen the original. Kathy Bates' performance was indeed good, but in Simon's view, she owed her Oscar at least as much to the character and the awards campaign as to her acting.

The Academy's fondness for damaged psyches was well known.

With so many Oscars having gone to characters who were psychotic, murderous or manic, the awards had even been mocked as belonging to a mental institution.

On top of that, Kathy Bates was a CAA client. If not for Simon's arrival on the scene, CAA would undoubtedly have remained the most powerful talent agency in Hollywood in recent years. The fact that the agency had still managed to win Dustin Hoffman his second Oscar at the start of this year, despite Daenerys' sniping, said it all.

Still, where Bates' Annie Wilkes in the original had mainly left audiences feeling nervous and on edge at her warped volatility, Simon wanted the new female lead to bring something else to the role: a strong sense of seductive danger, the feeling of being lured into hell by what seemed at first like a lucky encounter.

To get that, he had to factor in looks.

Balancing looks, acting ability, and certain unavoidable personal considerations, Simon finally settled on Susan Sarandon.

Sarandon was forty‑three this year, about the same age as Kathy Bates, and fit the rough age range Stephen King had envisioned for the character.

She had earned her first Best Actress nomination back in 1981; her talent was beyond dispute.

Though over forty, Sarandon had taken excellent care of herself. In The Witches of Eastwick two years earlier, she had more than held her own in terms of allure against Michelle Pfeiffer and Cher.

Last year, she had co‑starred with Kevin Costner in the hit baseball romance Bull Durham. On screen, she was ten years older than Costner, yet the two had seemed perfectly matched, with no sense of age gap at all.

And Simon still vividly remembered her in Pretty Baby.

Most people thought Brooke Shields was the film's centerpiece, but Simon had felt nothing for the girl's flat figure. It was the image of Susan Sarandon, posing nude, reclining on a sofa for a photograph, that stayed with him, like a scene from a breathtaking classical oil painting.

When Simon's offer came, Susan Sarandon had hesitated at the idea of playing a manic, deranged super‑fan, but after thinking it over she quickly accepted.

She clearly saw the breakthrough the role might bring her.

As for the male lead, Simon's standards were not nearly as high, so it was only natural that a swarm of "favor calls" came his way.

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