Game Development: Starting with Recreating the Anime Game Style

Chapter 85 Magic Trick

As Chu Chen drank his cola in the conference room, making up his mind, several men in suits who had just come out of Chu Chen's office got into their car.

"Brother Hong, that guy surnamed Chu just now seemed pretty tough."

"What can we do if the person surnamed Chu refuses to pay more?"

"He won't look for another animation outsourcing company."

The man named Hong Ge didn't even open his eyes, but a mocking smile curled at the corner of his mouth.

"Xiao Li, how long have you been following me?"

“It’s been almost three years, Brother Hong.”

"Three years have passed, and you still don't understand?"

"Is the Japanese animation industry open to just anyone?"

"He's a game developer, he doesn't understand the rules, he has no connections, how can he find outsourcing? The outsourcing company he finds might be even more unscrupulous than us."

"Even if you find an outsourcing company, so what? Do you think Japanese animation studios can just get animation just by paying money?"

"Besides, we've already received the 200 million yuan deposit. If he doesn't add more, won't that 200 million yuan go down the drain?"

"Sunk costs, do you understand?"

Xiao Li nodded repeatedly, his worry fading considerably and replaced by a fawning smile.

"Brother Hong sees things very clearly."

Hong Lingyun closed her eyes again.

"Wait, then."

"After being humiliated, he will naturally understand that if he wants to outsource Japanese animation in China, he has no choice but to come to us."

"However, the price won't be the same then."

~~~
When Hong Lingyun left Starry Sky Games.

I hadn't thought about it.

He will see that familiar name again so soon.

It was the early morning of June 2nd.

As usual, Hong Lingyun sat in his boss's chair, scrolling through his phone.

They have many kinds of "broker" business, not just connecting animation outsourcing, but also doing many other things, because they make money from information asymmetry.

So the first thing I do every morning is check the news.

Today was no exception. After his phone screen lit up, he skillfully opened a website, glanced at it, and then opened another website.

Mingcheng.com, although not a well-known website, is a genuine national-level news website.

It mainly features news from the Suzhou and Hangzhou area. Because it's a national website, the information tends to be official, but precisely because it's official, you can occasionally find something useful.

I casually scrolled through the page and, as expected, didn't see any noteworthy news. I was about to exit when a few words suddenly caught my eye.

[Starry Sky Games][Japan][Acquisition]

He suddenly opened his eyes and grabbed his phone.

With the assistance of the Yufeng Municipal Government, Xingchen Games successfully acquired the Japanese animation studio IMS.

Yufeng City: Government-Enterprise Cooperation Creates a New Benchmark for Sino-Japanese Animation Cooperation

Hong Lingyun's fingers were a little stiff as she clicked on the news article.

The news article wasn't very long; the headline already covered most of it. It basically said that Starry Sky Games had acquired a Japanese animation production company called "IMS."

"Creative Media IMS!? No, how did he find it!?"

This is not all.

The news report explicitly stated that the core team of the animation studio would relocate to Yufeng City in China and work at the Yufeng Entrepreneurship Industrial Park for at least two months.

The Yufeng Municipal Government provided strong support for this effort, including but not limited to providing office space and assisting with visa processing for all Japanese employees.

The accompanying photo of the news article prominently features Wang Jianmin, the vice mayor of Yufeng City.

Wang Jianmin praised this collaboration as a "model project for in-depth cooperation between the Chinese and Japanese animation industries" and "injecting new momentum into the development of the cultural industry in Yufeng City."

"What the hell is this!?"

After reading the entire news, Hong Lingyun felt that her worldview was about to be completely destroyed.

To be honest, after the falling out with Xingchen, he did consider that Chuchen might seek other solutions, but he thought Chuchen might look for other outsourcing channels or seek domestic animation outsourcing, and he had his own information channels for these.

But a direct acquisition? How is that possible?

It's not that acquiring a Japanese animation company is an unfeasible path.

On the contrary, Japanese animation production companies have been in a very bad state in the past two years.

The Japanese animation industry is thriving, but the money earned from Japanese animation doesn't end up in the hands of the animation production companies; most of it goes to the production committees.

Animation production companies don't make much money at all.

According to a report by the Japan Animation Industry Association, from 2010 to 2016, the number of Japanese animation production companies going bankrupt continued to rise.

Seven Japanese animation companies went bankrupt in 2010, six in 2011, and an average of four bankruptcies occurred every year thereafter. In 2016, a record was set, with nine Japanese animation companies going bankrupt and liquidating in the first half of the year alone.

So why are so many animation production companies going bankrupt?
The reason is simple: animation production companies neither make money nor are they valuable.

I just explained why I'm not making money.

The reason why it's not worth much is actually related to the production committee. Even if an animation produced by an animation production company becomes popular, the IP and copyright of the animation belong to the production committee and have nothing to do with the animation production company.

Only a very few, such as Kyoto Animation, are able to operate their IPs completely independently.

The remaining animation companies have no intellectual property, no copyrights, and their fixed assets are practically zero. Perhaps the only valuable thing they have is their people.
The problem is that the Japanese animation industry has no shortage of people.

If you don't do it, people will do it.

Many animation production companies go bankrupt without being acquired, because other animation companies know very well that if you go bankrupt, your employees will find jobs on their own.

At that time, we can also suppress the wages of these "new employees".

This explains why, despite the booming popularity of Japanese animation, animation production companies are going bankrupt one after another, and it's also why domestic 2D animation companies haven't been able to develop.

Japanese companies don't even make money from outsourcing, and you, a Chinese company, think you can make money through outsourcing, earn your first pot of gold, and then produce your own animation? What a pipe dream!
Many animation production companies go bankrupt not because of debt, but because they can't get enough orders, or they can't get enough orders, and they can't pay salaries for several months in a row, so they dissolve.

Forget about acquiring a company with money; you could just pay off the wages you owe your employees, and the company would be yours.
Yes, easy to buy doesn't mean you can buy it.

It's worth noting that in the early stages of the wave of bankruptcies among Japanese animation companies a couple of years ago, some domestic capital did try to buy them at rock-bottom prices.

However..
Most people who hold this kind of thinking end up spending money and buying a company, but within a year or two, the company will still go bankrupt.

In Japan, the production process for an animation is standardized.

First, the copyright holder or investor contacts a large number of companies to form an "animation production committee," and then this production committee finds animation production companies to produce the animation.

In this chain, the animation production company is the contractor, and the production committee is the client.

In other words.

Whether an animation production company can make money, and how much money it can make, depends entirely on the production committee's decision. And those animation companies that have been bought by Chinese capital are not recognized by the Japanese production committees at all.

Let alone animation production companies, even the investment of Chinese capital in the Japanese animation industry is subject to restrictions by the Japan Animation Association, which stipulates that Chinese capital cannot account for more than 30% of the production committee.
This extreme xenophobia.

The end result was that Chinese capital spontaneously withdrew from Japan, which is why since the "Japanese animation copyright war" in 16.

Not only have iQiyi, Youku, and Tencent Video abandoned importing animation, but even Bilibili, which focuses on anime and manga, has reduced its investment in animation.

Hong Lingyun was so certain that Chu Chen wouldn't dare bypass them and go to the Japanese animation company alone for the same reason.

simply put.

It was simple for Starry Sky Games to acquire this animation production company.

However, it's practically impossible for this animation production company to operate normally, unless Starry Sky Games uses this animation company to create its own in-game animations.
That's not right either! My offer of 500 million for 30 minutes may be a bit outrageous, but the cost of supporting dozens of people a month is not low!
Are you crazy? Acquiring an animation company yourself? Just to prove a point?!

You might as well outsource it to me; I'll give you a discount!

What shocked Hong Lingyun even more was that he couldn't understand how Starry Sky Games had convinced that group of Japanese people to leave their homes and come to work in Yufeng City, China.

Even if it's only for two months.

And there's the Yufeng Municipal Government! Mayor Wang Jianmin personally showed up? Assisting with visa processing? Providing venues and policy incentives?

Just how big of a pie did Chu Chen promise Yufeng City that the local government would go to such lengths to support a game company's acquisition of a Japanese animation studio?

A series of questions remained unresolved.

Hong Lingyun looked at the news as if he were watching a magic trick.

"No, is this kid doing magic tricks?"

"No, I have to find out how this kid did it!!"

After grumbling for a while, he suddenly felt a little regretful, and then suddenly felt a strange anxiety and chill.

This anxiety and chill felt like a thief stealing a policeman's phone.

Even though the police haven't come looking for me yet, the feeling of "they've got the wrong person" has already started to linger in my mind.

(End of this chapter)