Chapter 32: Divvying Up the Spoils and Controlling the Situation (Seeking Recommendation Tickets!)

  To be accurate, the owner of 70% shares of Mars Entertainment is not Jester, but a holding company registered in Cayman Islands that is fully controlled by Jester - Jester Holdings. This is also why Mars Entertainment was formally established three days after Jester returned to Costa Mesa, he needed time to find professional agency to help him apply for an enterprise in Cayman Islands.

  As for the reason, it is well-known to everyone, which is tax-free.

  As a result, Mars Entertainment became a subsidiary of Cayman Islands-based Justest Holdings, meaning the federal government had no right to collect corporate tax from Justest Holdings as it was not an American company, and could only collect operating taxes and sales taxes from Mars Entertainment, avoiding a substantial portion of other levies.

  Later generations of institutions have done statistics, and around 2014, according to regulations, the federal tax rate for a company was around 35%, but after most companies used various tax evasion methods, the federal government could only collect 12.5% of taxes.

  Needless to say, high-tech companies in California can also get tax cuts from the government, with the lowest even less than 10%.

  Jester had no idea of tax evasion because in the US tax evasion is no different from being dead.

  In the United States, there is a famous proverb that says only two things in life are inevitable: death and taxes. However, tax evasion, Jester thinks this should be something a qualified capitalist must learn to do.

  Mars Entertainment's first board meeting was held at Jast's home - the living room served as the conference room.

  This is also understandable, after all, the shareholders of Mars Entertainment are only four people, and Jester's family of three still controls 95% of the shares.

  Essentially, Jast could make any decision without even holding a board meeting since it owns the majority of shares in this company, but out of respect for Mark Xue and to show that Mars Entertainment is a real company rather than just some casual workshop, he decided to hold this board meeting.

  Jester, Mark Seni, Jester's parents sat together, chatting casually about some topics, without a sense of solemnity as if they were holding a multi-million dollar distribution meeting.

  Yes, the board meeting proposed by Jester is to discuss how to distribute the huge profit of tens of millions brought by the company's huge sales last month. In fact, it's a bit unreasonable to call this the company's monthly sales, as these are just advance payments from agent sales companies. To complete these production tasks, Jester estimates that based on current production capacity, it will take until the end of August.

  So essentially, this should be about two and a half months to three months of sales.

  But after all, it's a huge sum of nearly $100 million. After deducting taxes, previous recruitment expenses, necessary expenses for company establishment, funds paid to OEM factories, and leaving behind the necessary funds for the company's subsequent operation, there is still a massive fund of over $70 million.

  According to regulations, all of this money can be used for dividend distribution.

  Of course, Jester can't withdraw all the funds either. Mars Entertainment's development needs a lot of money to fill in, which is unquestionable.

  It's just that the two hardware development teams he set up are two money-eating bottomless pits. For now, it's okay to say that the products being developed are some mature technologies in the market. When they really start developing products that don't exist on the market yet, such as 16-bit arcade boards, 16-bit home console circuit architectures, and 8-bit handheld game consoles, the funds required will be extremely large. For example, Capcom spent a total of $50 million to develop CPS1.

  "Take out 50 million for dividend distribution, and leave more than 20 million as operating funds for the company." Jester simply stated his opinion.

  Actually, he himself did not want to withdraw so much money at once, but the problem is that he recently needed money in too many places, acquiring Mirage Studios, setting up a display chip R&D company, investing in Michael Dell who was still struggling in the Texas warehouse, investing in building factories domestically, and forming a publishing company, etc.

  Yes, Jester didn't plan to include the publishing company in Mars Entertainment either. In his mind, each profession has its own specialization, and game companies only need to focus on making games, while publishing companies only need to sell games.

  His publishing company will not only release Mars Entertainment's games, but also a large number of third-party platform games. Jester knows that the game market is too big, and even Tencent didn't manage to swallow it all at once back then, and he himself absolutely can't either.

  The prospects for third-party games are extremely broad, otherwise it would not be possible to give birth to third-party publishing giants such as EA, Ubisoft and Activision.

  Including the game CG company that he will establish later, the company that produces game peripheral toys and so on, all of them will be an independent individual and will not belong to Mars Entertainment. All these companies are dependent on Mars Entertainment for survival, Mars Entertainment is the incubator, and these enterprises are the catalysts, earning the highest profit for Jester.

  But Jester, in order to have complete control over these newly established companies, it was impossible for him to use Mars Entertainment's money directly. If he did that, the ownership of the new companies would belong to Mars Entertainment, not himself - a clear equity structure was what he wanted to establish from the start, and it wasn't that he didn't trust his parents, but rather - the future of Mars Entertainment couldn't just be limited to these four shareholders.

  In the future, each of their shares will be diluted in order to lure in the most outstanding producers.

  After understanding the history of later generations, Jester knew that these excellent producers would not be willing to work for a game company for a long time. As long as they made a successful and sensational work, they would think of ways to leave the game company and establish their own studio, leaving their best works here.

  After all, making money for oneself is the most motivating thing.

  So Sony's classic creation in later generations, establishing or acquiring studios globally under the Global Studio Plan, is the best option for Jester.

  This plan is completely different from EA's approach of acquiring a studio after seeing its work.

  Sony is doing this not just to make money like EA, but to have a market share and reputation, as well as a deeper meaning, as long as they don't let their enemies get it, then they've made a profit.

  The biggest difference between Sony and EA, apart from Sony having its own console and being a first-party game publisher, is that Sony owns shares in this studio but only takes a portion of the profits. Moreover, they absolutely will not interfere with their own studios' decisions on what games to make.

  For the vast majority of excellent filmmakers, their ideas are not much different from those of Hollywood directors. They all think they are dream builders, creating a brand new world and telling a completely new story. What they hate most is being pointed at by outsiders.

  What I love to do most is, I let you do what I want you to do, until the remaining value of this studio is squeezed dry, and then throw it away like a broken shoe - such as the famous Xi Mu Studio, and the extreme car design team that was disbanded and reorganized.

  But Sony is different, they won't interfere with what games their studios want to make or how they operate, all he wants is for you to make a good game for his platform.

  Although there are differences in business philosophy between the two parties, the most important thing is that the first-party game does not allow word-of-mouth.

  The first party's games are allowed to have low sales, but absolutely cannot be panned by critics, because this is the console manufacturer's most powerful tool for grabbing market share, and there can be no losses.

  Why should a player buy your console instead of another company's? Not because of third-party games, since they are available on all platforms, but because of the allure of your exclusive titles!

  But the biggest difference between Jester and Sony Games is that Sony Games itself is a publisher, and game studios are held by the publisher. However, the company Jester wants to build not only wants to be a first-party publisher but also hopes to be a third-party publisher.

  Mars Entertainment is first-party, while other game companies are third-party.

  He wants to set up a publishing company that not only publishes its own games but also publishes other people's games, even if they are not their own development.

  Jest is making exclusive games because he's the boss of a game company, he has to do it, he needs to take responsibility for his own company, but his idea about games is that all players should enjoy every game, which means he essentially supports all platforms.

  So, he came up with this plan, where game developers only develop games and publishers only publish them, forming a mutually beneficial relationship, while the owner remains independent.

  According to the shareholding, Juster, or more accurately, Juster Holding Company which is wholly owned by Juster, will get 70% of the $50 million, totaling $35 million. Moreover, since the dividend recipient is a corporate entity, Juster won't even have to pay the substantial amount of personal income tax on that sum.

  Jester's proposal was unopposed, his parents naturally didn't need to be said, and Mark Seni's 5% stake of $2.5 million, after taxes, was also a large sum of money, so he had no reason to oppose it either.

  In fact, Jester had never heard of a board member opposing dividend payments before.

  The next proposal is to make Mars Entertainment a subsidiary, but now the board of directors is basically Jest's one-man show, even if Mark Sennett opposes it, it will not have any impact on Jest. If Mars Entertainment grows bigger in the future and there are more shareholders with complex interests, it will be very difficult to do so again, after all, this is a **naked cut** from Mars Entertainment's body.

  Even if it is forcibly passed, it will cause people to lose heart and become disunited.

  What is the most important thing for a game company?

  Anyone familiar with the game industry will tell you straight out: publishing rights.

  Jester wants this time is the distribution rights of Mars Entertainment.

  "My second proposal, the distribution rights of Mars Entertainment, I want to sell it to Jest Holdings for $1 million." As soon as Jest finished speaking, Mark Senni's face changed, but he didn't raise any objections. After all, he had just received a dividend of $2.5 million, which was equivalent to Jest's admission fee for him, and this also made him feel grateful to Jest, in addition to his admiration for Jest's game design skills.

  Even before Just, he himself didn't think he was worth several million dollars.

  So he unconditionally supported all of Jester's proposals.

  Jester's parents weren't stupid either. After handing over the publishing rights of a game company, this company would completely become an affiliate of Jester Holdings, but what does that have to do with anything?

  After all, Jestar Holdings is a company wholly owned by his son.

  They also naturally raised their hands in agreement.

  As for some other minor issues, the four of them also discussed, but Jester's father was not very interested in how to manage the company. He was only interested in developing a certain product. Now that the 8-bit arcade motherboard project is coming to an end, the development of the 16-bit motherboard has also started formally. The entire arcade motherboard R&D team does not have any experience with 16-bit motherboards, so his current workload is very heavy. Seeing that there was nothing important left to discuss, he directly suggested going back to the company.

  Jest before his father's death, he specifically entrusted his father to continue recruiting more outstanding hardware designers and start the pre-research of a brand new product.

  When Jester's father asked what product Jester was.

  Jiest handed over a Game & Watch he had prepared long ago to his father.

  "Handheld!" At the sight of Game-Watch, Jester's father exclaimed in surprise, and he suddenly understood what new product Jester was referring to.

  Game & Watch is the world's first handheld console and a cross-era work that established Gunpei Yokoi's position as a hardware god. Its concept originated from Gunpei Yokoi's sudden idea of seeing office workers playing with electronic calculators due to boredom while riding the Shinkansen, and its name comes from electronic games "game" and digital quartz watches "watch".

  At that time, the situation of Renhe was not good, because before Renhe invested everywhere, they lost heavily, especially with Mitsubishi Shokai to develop a TV-Game 6, a pirated Atari 2600 home console. Although this cheaper pirated product sold 350,000 units at its debut, the problem is that it was a loss-making host for market share, and the original plan was to make up for the difference with their own games, but unexpectedly, several initial pirated Atari works were all flops.

  This resulted in a phenomenon where the more consoles were sold, the more losses Gunpei Yokoi incurred. When Yokoi submitted his Game & Watch proposal to Hiroshi Yamauchi, Nintendo was on the verge of bankruptcy due to the failure of the Color TV-Game 6.

  Then Yamashita Yū put the final weight on Yokoi Gunpei's Game & Watch, and won the last battle of Jigoku, reviving from the dead.

  Gunpei Yokoi also established his position within Nintendo, before he left the company in the 90s due to the failure of the Virtual Boy. Gunpei Yokoi was an undisputed existence within Nintendo, above everyone below Shigeru Miyamoto, the creator of Mario and the head of Nintendo's EAD division. Even Shigeru Miyamoto would bow 90 degrees and address him as "sensei" when they met.

  Because Shigeru Miyamoto had the opportunity to transition from a staff artist to create the classic game Donkey Kong, thanks to Gunpei Yokoi's recommendation to Hiroshi Yamauchi.

  Regarding the lesson that Nintendo almost went bankrupt due to TV Game 6, Yamauchi Hiroshi made a rule at Nintendo that would never be broken. This rule was deeply hated by later gamers, but Gunpei Yokoi strongly agreed with it - this was the biggest lesson learned from someone who had already stood on the edge of the cliff.

  "Every piece of hardware sold on the market must be profitable!" This is also why in later generations, Sony and Sega, Sony and Microsoft constantly lowered their console prices to compete for platform share, even if it meant selling at a loss, while Nintendo would never sell hardware at a loss, no matter how low its market share was.

  They've been through this before decades ago.

  This is also the creed that Jester has always adhered to, and he firmly believes that while the platform share of game consoles is related to price, the most important thing is the quality of exclusive games on this platform.

  And every piece of hardware sold is profitable, which is responsible for the company and even more respectful to the hardware R&D team.

  No one wants their painstakingly developed product over the years to become an appendage of something else.

  Even if it's for the greater good.

  The Wii was able to maintain a not-too-bad market share by relying on hardware levels that were two generations behind Sony and Microsoft, and even pioneered innovations in physical sensation on the Wii, thus outselling the combined sales of PS3 and Xbox 360 in the early days of that console generation. Although it weakened later on, in the sales statistics for the previous generation's consoles after the release of the PS4 and Xbox One, the Wii still dominated the PS3, firmly holding first place.

  Notably, the best-selling single-platform game of all time is Wii Sports, with 82 million copies shipped, of course, bundled with Wii sales.

  There is also a point worth mentioning, the most important and greatest design in game-watch is the directional pad.

  This design has spanned almost the entire history of gaming, influencing nearly all manufacturers and players. From the moment it was born, it established the rules for directional key design, making people feel that directional keys should be designed this way. And predictably, before the so-called virtual headsets appeared, the cross-key design remained the only and irreplaceable one.

  Moreover, Yokoi Gunpei is not only a god of hardware, but also an excellent game designer. When designing the Game & Watch, he specially created a game for this work of his heart's blood, which was later selected by IGN as one of the top 100 greatest works in the history of electronic games in the last century - "Fire".

  The gameplay is about two firefighters holding a rescue net to catch the residents jumping from the burning building, and the height and speed of the falling residents are different, which requires the player's reflex nerves to be highly concentrated.

  Although the graphics of "Rescue Team" are unwatchable by today's standards, they already contain all the basic elements of modern action games. The subtle adjustments to the operating system also made it a game that could be played to the extreme, and this became the guiding principle for the development of the game.

  In the decades-long history of the electronic game industry, there are few people like Yokoi Gunpei who have made great contributions to both software and hardware.

  Game & Watch was released in 1980, with a simple game built-in, small enough to fit in the palm of your hand, and played while held like a book. Due to its compact size, light weight, and suitability for customers, it received high praise from office workers and children at the time. After being introduced to the United States, it even triggered a sales craze.

  However, the Game & Watch also had a major drawback: due to immature technology at the time, its games were built into the handheld console itself, so buying one console only allowed for playing one game. To play other games, you would have to spend more money on a new console. As a result, the popularity of Game & Watch was short-lived and only lasted during its initial release period.

  But this modern handheld console still has a large number of fans, Jester remembers that when he was watching the video of James in his previous life, James praised the GW handheld console highly, saying that in his childhood, almost everyone had a GW.

  "It's not just a simple Game-Watch knockoff." Jester said to his father, "I have some ideas about handhelds. I think the name already clearly shows the characteristics of this type of game machine, which is playing with it in your hand."

  Hearing Jester's words, his father also nodded in agreement.

  "So, this type of game console has four conditions that must be met." Jester spoke fluently, directly stating the four basic characteristics that Yokoi Gunpei mentioned in later interviews about handheld console design should conform to: "That is, our designed handheld console must be as short as possible, as small as possible, as light as possible, and as thin as possible."

  Short, small, light, thin. This is the design experience summed up by Toshiyuki Horie after more than 20 years in the industry. Perhaps to people in the future, this may seem obvious, but to hardware engineers who knew nothing about handheld devices at that time, these four words had a profound guiding significance and were a classic creation. Who knows how many mistakes and heartaches were condensed into these four words from Toshiyuki Horie's more than 20 years of research career?

  Jester's father continued to nod repeatedly.

  Moreover, we should use mature technology as much as possible. Immature technology, no matter how good it is, is still immature. Immaturity means high cost, and our handheld devices are supposed to be cheap. If a handheld device costs the same as a home console, why would anyone buy a handheld? Moreover, immature technology is also insecure and unreliable.

  "Technological innovation is never as important as design innovation."

  Jest continued, "We need to think in parallel using mature technology." This design philosophy of Iwata's has influenced many designers and numerous hardware manufacturers, most notably Steve Jobs and his Apple.

  This is also Jie's most recognized hardware R&D philosophy.

  "Think in parallel with mature technology!" When Jester's father first heard this sentence, his eyes suddenly lit up. For ordinary people, this might just be a very ordinary sentence, but for an outstanding hardware engineer, it was not just that - it was like the paper that blocked his line of sight and prevented him from seeing the scenery outside the window being suddenly pierced.

  Jester's father looked at Jester with some excitement, his face full of thrilled expression, and even had a little gesture: "What you said is very reasonable, I used to have many designs that didn't know how to make choices, it seems like I've found the problem... using mature technology for parallel thinking... good, good!"

  Jest smiled silently, he was far inferior to his father in hardware development. What he said was just a summary of the life experiences of those hardware design masters he had seen, and he didn't feel proud or excited about it, just like when he talked about game design theories in front of his employees, even Mark Cerny, these things weren't his own.

  Since it's not his thing, why is he so excited?

  "Dad, roughly speaking, I need the newly established handheld game console R&D team in your hardware R&D department to develop two handheld consoles for me. One is an 8-bit console with a black and white LCD screen that can be inserted with cartridges. I'll provide the detailed specs later. This development may be quite difficult, but I'm not in a hurry, so there's plenty of time."

  "But the second one, my requirement is to be as soon as possible. This R&D can be considered as accumulating experience for the first handheld game console. You refer to the Game & Watch design and create a handheld console that is as small as possible, preferably with a volume of only half or less than GW's. No need for interchangeable cartridges, I've had an interesting idea about handheld games recently."

  Before his father's departure, Jester made his final request.

  Takamori's idea had actually been lurking in Jester's mind for a long time. Jester was well aware that this game would have a huge impact on the current child players, and Takamori didn't require high technical skills, just the hardware conditions of GW were enough.

  Game consoles are essentially toys, and now their main buyers are different from those in the past. Their main buyers are still children.

  Moreover, Jest is not just about simply cloning a Tamagotchi, what's the point of cloning a simple pet machine?

  He thought of another handheld masterpiece, he felt that Takamori Gakuen was absolutely matched with this game in his previous life.

  This game is the extremely legendary Pokémon.

  Who wouldn't want a portable Poké Ball with a little spirit they've raised themselves inside?

  Jester thought, now is not the time to push out pm, but turning the original Tamagotchi, a simple handheld pet toy, into a Pokémon breeding machine, allowing current players to start enjoying the fun of breeding.

  Even when the PM was released, every player who had a Pokémon breeding machine could import their Pokémon that they had bred for several years into the game as their starting Pokémon!

  Just thinking about this setting gives me goosebumps.

  So when you launch a real PM handheld console next time, will it be more explosive than last time?

  Can't say for sure?

  Why don't we just try and see?

  Jester thought for a moment, then flashed a confident smile.

  As a die-hard PM fan, he knows too well the psychological needs of those PM players. Such settings are simply irresistible to them!