America: My Time

Chapter 99 Financing
Chapter Ninety-Nine Financing

Compared to Wall Street giants, Japanese companies were the ones driving up financing. They knew the details of Sony, Panasonic, and Hitachi factories. If we're talking about companies that understand the gaming world best, it's not the Wall Street giants, but the Japanese companies. From the very beginning, the Japanese companies offered astonishing prices, prices that exceeded the expectations of the Wall Street giants.

$30 billion is the asking price offered by several major Japanese companies for the game world, exceeding the expectations of Wall Street giants. This is not the final offer from these companies; they can continue to raise it. They even stated that they are willing to acquire the entire game world for $35 billion. All of this has had a huge impact on Wall Street giants. Although Morgan Stanley was prepared, they also felt the pressure in the face of the aggressive Japanese companies.

"We must have overlooked something, otherwise these people from Japan wouldn't have quoted such an outrageous price. Perhaps we really lack understanding of business operations, can't comprehend the layout of the game world, or perhaps we underestimated the upcoming Christmas sales in the game world. The value of the game world is much higher than we imagined!"

"Boss, what should we do?"

"Following the offer from the Japanese companies, we absolutely cannot miss this funding round. This is a funding round that we spearheaded. If Morgan Stanley comes away empty-handed in this round, we'll lose all face. We don't care what other investment banks do; we must acquire some shares in the gaming world!"

Morgan quickly made a decision to follow the Japanese companies. Morgan believed that these Japanese entrepreneurs were not fools. If the game world was not worth that much, they would never have spent so much money. They were more willing to trust these Japanese people than the valuation of investment banks. After all, Japan was the manufacturer of the game world, had more communication with the game world, knew more secrets, and understood the dynamics of the game world.

At this point, Morgan felt a pang of sadness. GameWorld was clearly an American company, with a dominant market share in North America, yet they didn't understand it as well as the Japanese companies. And they were an investment bank! This was truly embarrassing for Morgan. It was a fact that they had indeed overlooked GameWorld's potential, lacked a detailed understanding of it, or perhaps still held a condescending attitude towards it.

Perhaps after making numerous deals with John and gaining a deeper understanding of him, their minds unconsciously shifted again. They became arrogant, believing they had everything under control, when in reality their understanding of the game world was far from sufficient. This served as a warning to Morgan, making him take this experience seriously. Under no circumstances should one be careless or negligent until everything is over, or they will suffer greatly!

Morgan Stanley chose to follow the neon companies in the bidding for a stake in Game World. Other Wall Street investment banks were hesitant. The price exceeded their expectations, leaving them unsure whether to follow suit. After all, Game World was just a new company, and even if it had some potential, they didn't know how much that potential actually was.

These Wall Street firms have forgotten a crucial issue: monopoly! The gaming world today has truly achieved a monopolistic advantage, with no company able to directly compete with them in the gaming market, especially in home consoles, where they hold a dominant position, controlling the platform and constantly exploiting other franchisees.

Wall Street giants fail to grasp the sheer size of the gaming market due to preconceived notions and a general disregard for the industry. Even with the immense success of GameWorld, they still perceive the gaming market as a niche market. Japanese companies, however, hold a different view. They possess a deep understanding of the market's scale, enabling them to invest heavily. They believe that investing in GameWorld is a guaranteed profit.

In the eyes of Japanese companies, if they control the gaming world, they would never seek funding, much less go public; they would never share profits with others. This doesn't work in the US. Sharing is a necessity for businesses. Once a company grows large and strong, going public is a must; otherwise, it will face pressure from all sides. Sharing is the norm.

In this subscription, the Japanese companies seemed intent on acquiring a 15% stake, leaving no room for Wall Street giants. They relentlessly inflated the market capitalization of GameWorld, gradually causing some of the Wall Street giants to back down, leaving only Morgan Stanley to follow. Meanwhile, Japan was left with only its three partners in GameWorld: Sony, Hitachi, and Panasonic. At this point, they were unwilling to continue driving up GameWorld's market capitalization. They understood that no matter how high they raised it, Morgan Stanley wouldn't give up, so they had no choice but to compromise, otherwise they would only be giving GameWorld away for nothing. John was already very satisfied with the results. With the support of these three major Japanese companies, the market capitalization had gradually risen from 3 billion to 35 billion, the price they had paid for their full acquisition of GameWorld. Although this price seemed a bit high now, it wasn't high in the long run. Perhaps when GameWorld's annual report came out, they would realize that this investment was worthwhile, and Morgan Stanley's persistence would not be a loss.

"John, you've succeeded this time. A valuation of 35 billion should make you very satisfied!" Akio Morita said, looking at John's smiling face. He hadn't expected to raise the market value of the game world so high, but he thought it was worth it. At least it eliminated other companies and gave them the upper hand in this investment.

John smiled calmly and said, "High valuation? No, it's not high at all. If it weren't for the timing, and if I hadn't made an agreement with Morgan, I wouldn't have chosen to raise funds at this time. Instead, I would have waited until the beginning of the year, after Christmas. Then, when you look at the current market value, you'll find that it's not high at all. When the annual report comes out, you'll understand even more clearly how efficient the return on this investment has been!"

At this moment, John didn't seem to care about mentioning his agreement with Morgan and clarifying his position. It wasn't that he wanted funding himself, but rather that he had an agreement with Morgan. The reason he was giving everyone this opportunity was because of Morgan; this gave Morgan a lot of face and emphasized the promising future of the gaming world.

Why the rush to raise funds? Because Morgan provided John with tremendous help. Legendary Entertainment's rapid development is all thanks to Morgan's support behind the scenes. This is a reciprocal gesture!

John believes that those Wall Street giants who gave up will regret it when Game World's financial statements come out next year, and they will even regret their decision after Christmas. Opportunities don't come often, and if they miss this chance, they will have to wait for the company to go public to invest in Game World again!
Upon hearing John's words, Akio Morita nodded thoughtfully, indicating his agreement. The expressions of the others changed drastically, especially those Wall Street giants who had abandoned their investments; they all felt they might have been wrong, and that the game world had more potential than they had imagined.

I initially thought Morgan was only continuing to follow them for the sake of appearances, but I forgot that Morgan is also a Wall Street tycoon. Would a tycoon pay such a high price for his image? Profit is the most important thing. Morgan must have a better understanding of the gaming world to dare to follow these Japanese companies so recklessly!
Akio Morita also felt that John's words had another meaning, which would be helpful for Sony's future acquisition of Columbia. Perhaps Sony should choose to cooperate with Morgan to complete the acquisition of Columbia!
Soon those Wall Street giants felt that Morgan was intentionally hiding something from them, so they turned their attention to Morgan, their eyes filled with scrutiny, as if they wanted an explanation from him!
“Mr. John, it seems you have a lot of confidence in the game world. I wonder what makes you so confident? Will Christmas sales really be a huge hit?” As the boss’s staunch subordinate, Jimmy had no choice but to step in to defend his boss at this moment.

"Confidence? If you don't even have this much confidence, how can the game world develop? You investment banks only care about the so-called company size and assets. A company like the game world, which doesn't have its own production factory, is naturally not well-regarded, and its valuation is naturally low. This only shows that your ideas are outdated."

The advent of the technological age means that fixed assets are no longer the primary basis for valuation. The gaming world is now sweeping the global gaming market. You may think the gaming market is niche, but is it really? Do you know how big the gaming market is today? I think Mr. Morita and his colleagues are well aware of this.

Seeing John's gaze, Akio Morita nodded and said, "That's right. The game market is huge now. In our estimates, North America alone is an astonishing number. I don't know much about the home console and handheld game market, but I do know something about the arcade market. It's in the hundreds of thousands, or even millions, because games are constantly being added and arcade machines are being updated at an accelerated pace. The market is fluid. Taking the whole world as a comprehensive valuation, it's no problem for the game world to sell millions of arcade machines this time!"

"That's right, Mr. Morita is absolutely right. It's easy to sell a million arcade machines. We can do it in the North American market alone, not to mention sales in South America, Europe, Asia, and Africa. As long as the games are good and the arcade machines keep up with the times, arcade sales will not decline for more than ten or even twenty years. For the home game console market, it's not difficult to sell over a hundred million globally. How much profit do you think a platform with a market of one hundred million would generate!"

(End of this chapter)