Back in 1978, I was admitted to Northwestern Polytechnical University.

Chapter 296 Making empty promises is an art; even Warner Bros. can be attracted.

"The Loongson 2 and Huaxin 2 processors are incredibly advanced. They are absolutely the most suitable microcomputer processors. Apple will place an initial order of one million units of each!"

Steve Jobs was a savvy businessman; he could immediately see how adaptable these chips were to the market. There was definitely a market for millions of computers. Apple needed to keep up with the pace of the East and quickly develop advanced multimedia computers to capture the market!
"We at IBM have also ordered one million units each!"

“Our Packard Bell company will each order 500,000!”

The orders came in like snowflakes, announced directly at the press conference, shocking everyone.

Loongson 1 opened up the market, and Loongson 2 established a monopoly in the market. From then on, Loongson will completely replace Intel and become the most popular microprocessor in the international market. Moreover, the emergence of this graphics processor is a revolutionary thing!
The scene was very lively, but Hiroshi Yamauchi's expression grew increasingly grim.

Finally, the press conference ended. Next, it's time to eat and drink. We don't even need to take a car; we can just go to the hall next door.

"Come on, everyone! On behalf of Datang Group, I welcome all your orders. Orders worth one million yuan will be discounted by 20%, and orders worth five hundred thousand yuan will be discounted by 10%! Cheers!"

After downing a glass of wine, everyone was delighted, as if they could see countless banknotes rolling in.

"This second glass is a toast to an even brighter future! Let's work together to make the computer market bigger and stronger!"

"This third glass of wine..."

After three drinks, it was time for everyone to have their own fun. People kept coming up to Qin Liang. Yamauchi Hiroshi knew he couldn't wait any longer, so he picked up his glass and went over. After the European computer dealers left, he immediately joined them.

"President Qin, I'm very pleased to see the progress made by Loongson and Huaxin, but... if computers can also play games, won't that... affect the development of home entertainment computers?"

Qin Liang had noticed Yamauchi Hiroshi's unease long ago, but he hadn't paid any attention to him. Now, hearing him say this, Qin Liang smiled.

"Mr. Yamauchi, you're overthinking it. Computers and home game consoles are products with different market positioning. Their functions don't overlap. Home game consoles are inexpensive and easy to sell, with annual sales of millions of units being no problem. On the other hand, personal computers are expensive and are destined to be toys for wealthy people. You... should be able to see that, right?"

Hiroshi Yamauchi smiled wryly. Of course he could see that, but... driven by the monster that is Moore's Law, the price of personal computers will definitely get lower and lower. One day, personal computers will completely replace home game consoles. Putting aside everything else, just the fact that you don't need cartridges, you can play games just by buying game discs, is much more convenient than game consoles.

"Mr. Yamauchi, we are very optimistic about the home video game console market. Nintendo's future is bright. The batch of Huaxin No. 1 chips we ordered earlier will definitely be sold. You have to trust my judgment. Come, let's toast to our cooperation."

Want to return the goods? That's impossible. Let's promise them a tangible reward first.

"Okay, cheers." Hiroshi Yamauchi raised his glass. Now, he could only go back with a heavy heart and hurry up and get the factory to start production so that he could capture the American market. If the delay was too long, there was a real possibility that the products would become unsaleable.

Fortunately, it will take some time from the release of Loongson 2 and Huaxin 2 to their production into computers. This market gap will be left for game consoles.

After Hiroshi Yamauchi left, a European man approached.

"Mr. Qin, if we in Europe adopt your MPEG-1 standard, will we need to pay you patent fees?"

"That's natural. We've put a lot of effort into this compression standard, and this is just the beginning. In the future, we'll have MPEG-2, MPEG-3, and other standards. The development of these compression technologies requires a lot of hard work. The Western world is the most respectful of intellectual property rights, so they should understand this, right?"

The lively scene quieted down again, and everyone looked at Qin Liang. This thing requires a patent fee, so how much should be charged?
"How do you intend to collect the fees?"

“A patent fee of $10 will be charged for each device that can play MPEG-1 videos. It will be collected in one lump sum, and then the device can be used for free in the long term.”

Ten dollars... to enter the multimedia era, that price isn't actually that expensive.

"Furthermore, any videos played using chips produced in our East will be exempt from patent fees."

"President Qin, your side is truly wonderful!"

"Yes, President Qin, you are a model of high-tech companies!"

Instantly, a chorus of flattery erupted.

This is practically equivalent to being free. After all, the only computer capable of playing such videos is the Loongson 2. The cost of purchasing the chip has already been announced and will not increase. As for the VCD player, it is developed solely by Oriental Enterprises, and the supporting hardware decoding chip is also produced by Oriental.

In the future, even if manufacturers in other countries want to make VCD players, they can simply and directly purchase chips from the East, which means that it will still be free!

Getting something for free is definitely the best thing ever.

Qin Liang's introduction of this plan was, of course, aimed at capturing the market. With videotapes dominating, how could DVDs possibly thrive? The answer was simple: low fees, even piracy was acceptable, as long as the market was captured, the future would be different…

If the standards are improved in the future, the fees can be increased accordingly!
MPEG-1 is not the best; it has low resolution and slow data flow. Anyone who has watched VCDs knows that when playing fast-paced movies, blurry squares can easily appear on the screen. This is usually thought to be due to scratches on the disc, but in fact, it is also due to insufficient compressed data flow.

This phenomenon disappeared with the release of DVDs, because DVDs use the MPEG-2 standard, which increases the transmission rate from 1.5 Mbps to 3 to 10 Mbps!
This is naturally because DVDs have a larger capacity; a single layer on one side can have a capacity of 4.7GB, which is six times larger than the 700MB capacity of a VCD! With higher capacity and lower compression rate, the image is naturally clearer.

Since the West has adopted our standards, they certainly won't develop any other standards. Even if they did, it would be useless if computers and DVD players don't support them. That's the advantage of capturing the market first!

"And what about the film's distributor?"

If there are no patent fees for this playback, does that mean that the patent fees will be collected from the distributor?

"Well, those film companies need to come and talk to us."

Warner, you've caused us a lot of trouble before, now it's time to sit down and have a proper talk!
At this point, Warner Bros. in the United States was in complete disarray.

Atari's game console launch was a failure, and its partner retailers all switched to cooperating with Huaxin! When the stock market opened on the 27th, all of Warner Group's stocks plummeted at a visible speed.

"Damn it, can anyone tell me what to do next!" Steven Ross, the owner of Warner Bros., was now over fifty years old. He used to be very energetic, but now he paced back and forth like a wild beast in a cage.

“Atari is regrouping, and they will definitely…” Manny Gerard’s words were cut off by Steven Ross’s glare: “We Warner Bros. started out making movies. We shouldn’t have relied so much on game consoles. When game consoles account for 50 percent of our revenue, we should have known that this was not a good thing!”

A company that started with movies ended up with half of its profits coming from game consoles! This inherently carries enormous risks!

Actually, it's not that they didn't know, but the profits from this monopoly were too tempting. Once they got their hands on it, they couldn't bear to give it up. They even tried to use their own advantages to expand the game's monopoly as much as possible. As a result, an even more powerful competitor emerged, and Warner Bros. was finished!
“Atari has no future.” Another director spoke up: “Dongfang recently launched its second-generation hardware. Whether it’s Loongson 2 or Huaxin 2, their performance is very strong. If these hardware are installed in game consoles, their performance will be much better than current game consoles. Even if Atari invests heavily in research and development, the result will be the same as Intel.”

After the stock market reopened, not only did Warner's stock price plummet, but Intel's stock price also continued to decline.

Anyone with eyes to see can see that Intel is finished. Two consecutive processors have failed to sell, huge R&D costs cannot be recovered, and Wall Street's investments have all gone down the drain.

Many of Intel's core employees realized that the company was about to go bankrupt and began to look for a way out. Once this trend started, it was irreversible.

Fortunately, Warner Bros. still has the film industry.

"Oh, and they also released VCDs, so you can watch movies on computers and DVD players..."

Upon hearing this, Steven Ross's eyes widened instantly. He had already keenly realized that the opportunity to boost the stock price had arrived!

"Tell me carefully!"

“In the past, we could only release videotapes, which were expensive and had very few users. Now, with VCDs, the cost is only one or two dollars… Some of our outdated movies that can no longer be screened can make a comeback with VCD players.”

Movie theaters have a specific strategy for scheduling films, prioritizing newly filmed movies, usually for about a month. Some blockbuster films might have a longer run, but at most two or three months. After that, audiences get tired of them, attendance drops significantly, and new films are needed. So, what about older films?

They're practically worthless now. At most, you could sell some of them on videotape, but the market wouldn't be huge. After all, videotapes aren't cheap, and if you switch to DVDs, the price will plummet. That way, you can still make some money off those films that are no longer valuable.

Moreover, this is a new channel. Once it is developed, it means that Warner has a new growth point, which is definitely good news for the stock market and can also drive the stock market up. Warner can get out of the crisis!
and so……

"We at Warner Music want to be the first to partner with the East!"

Everyone was a little embarrassed. A few months ago, we were suppressing the East, and now we want to cooperate? Don't the people of the East hold grudges?

"I believe that as long as there are benefits, we can cooperate. Warner and Eastern are a powerful alliance!"

"Do we need to go to the Pacific Trading Company's office first?"

"No need, that's just a sales point. We need to go directly to negotiate with their senior management, it should be that... Datang Company, right?"

It was 1982. On January 3, Qin Liang had just returned from the capital when he received news that Warner Bros. was coming to Datang Company to discuss business!

Looking at his empty office, Qin Liang felt a little helpless. It seemed that he would have to hire a few more employees. The company's daily operations also needed someone to manage them, and he couldn't lose face when receiving clients.

Creak... The door opened, and a beautiful girl appeared in the doorway.

"Duoduo, you're back?"

"Yes, the US market has been successfully developed, so I'm back."

"Honey, I've missed you so much!"

Even though they were already married, Qin Liang still had to travel back and forth. Although he was usually busy with work, he still felt lonely when he returned home and looked at the empty room. Now, the person who would warm his bed was finally back.

Hugs and kisses were no longer enough to express his excitement, but some more intimate things had to wait until the evening, so... Qin Liang decided to bring his energy back to work.

"Duoduo, my Datang Group is planning to recruit a few clerks. What do you think?"

"Yes, we really should recruit some. Ideally, we should recruit a few graduates from Northwestern Polytechnical University, or we could recruit current seniors. They must have good looks, be intelligent, and be efficient..."

"How about you take charge of the recruitment?"

"Okay."

Yang Duo'er's relaxed demeanor made Qin Liang feel a little... embarrassed.

This is Duoduo's trust in me, and of course I can't let her down.

Qin Liang raised his wrist and looked at his watch.

"By the way, Warner is coming to discuss business, so you can help me with their reception."

"Warner? Hmph, this time we'll have to have a proper discussion!"

That afternoon, in the conference room.

Steven Roth, along with several Warner executives, sat down in chairs and looked at the machine in the center of the conference table. Qin Liang inserted the CD, and with a buzzing sound, the computer screen displayed... a crosstalk performance by Mr. Ma Ji.

"Boasting harms the country, the collective, and the individual..."

"Excellent, truly excellent! This disc can actually play movies—this is a groundbreaking innovation!" Steven Roth's face was full of excitement. "President Qin, our Warner Bros. Group hopes to compress some of our best films onto discs for release. We'll start by carefully selecting one hundred for the initial release. We believe this will have a huge impact on the film industry!"

"sure!"

"Then, regarding the licensing fee for this VCD, we hope you can..."

Before he could finish speaking, Yang Duo'er interrupted him, saying, "The licensing fee will be two dollars per disc!"

The Warner Bros. staff present all changed their expressions.

If each one costs two dollars, then with distribution channels and other factors, their sales costs could reach five dollars. At that price, there's hardly any profit margin left; it's almost the same as a videotape!

Taking a deep breath, Steven Ross said, "Mr. Qin, VCDs are still a novelty, and it won't be easy to promote them. With Warner's help, VCDs can quickly capture the market..."

"Without Warner's help, our Huaxin FC still managed to dominate the market, and the same goes for VCDs." Yang Duo'er's words were still very firm, clearly indicating that she was still unhappy about what had happened before.

"Ms. Yang, in the home video game console market, we are competitors. Therefore, we have used some competitive tactics, which are all commercially permissible. Now, we are partners, and we have come with great sincerity. So... please calm down and consider our cooperation..."

“My emotions are normal. The DVD is not a one-time use item; it can be watched many times. One DVD can achieve the effect of a movie theater, and it only costs two dollars, which is definitely very cheap.”

"Mr. Qin, we... hope to make the payment in one lump sum."

“That’s impossible,” Yang Duo’er continued.

Steven Ross turned his gaze to Qin Liang. They came directly to the East precisely to avoid clashing with Yang Duo'er, but unexpectedly, they ended up clashing anyway. Now, it all depends on whether President Qin will tolerate Yang Duo'er.

“Mr. Steven, if we pay in one lump sum, the price will be very high,” Qin Liang said.

"Even if it's expensive, it still has a price, right?"

"One billion US dollars," Yang Duo'er announced the price.

"What? This is impossible!" Gerard exclaimed instantly. "You're asking for an exorbitant amount!"

Do you know how much profit Warner makes in a year? A billion! You dare to take it?!
"There are over 70 million households in the United States, and among these households, there are probably 30 to 40 million television sets. If we take one-tenth of that, that's a market size of 3 to 4 million VCD players. If each VCD player sells 30 discs a year, that's not a lot, is it?"

The other person nodded.

"Charging two dollars per CD, that's two hundred million dollars in patent fees per year, and one billion dollars in five years. Since you want to pay in one lump sum, then you should at least calculate for five years. Is one billion dollars a lot?"

That's really not much!
Qin Liang smiled. With his wife around, he felt much more relaxed. After all, his wife understood the American market best.

"Moreover, what we just calculated was only the US market. The patent fees we sell to you also need to include other markets, such as Europe. In the end, it's only patent fees for two or three years, which is very cost-effective. We are talking business now, so why would I let my emotions get the better of me and ask for an exorbitant price?"

Steven Ross took a deep breath: "Yes, it's not much when you calculate it that way, but I'm sorry, we still can't accept it, and our board of directors absolutely cannot accept it either. How about... one hundred million?"

Actually, 100 million is an astronomical price. Originally, they only planned to spend a few million to buy it, at most ten million. Now, it has increased tenfold.

(End of this chapter)