While the management team was curiously waiting for Simon to continue, John Chambers voiced his doubts into the room without any fear of repercussions:
"Mr. Smith, it is admirable that you change course after admitting a mistake, but only developing a single arcade game in 1971 seems a little wasteful for such a big company as Atari, right?"
Suddenly the room quited down a lot. Steve and Gunpei were just curious, as the two technical leaders didn't really care about workspace politics. But both Tanja and Dennis immediately became serious. A newcomer and trainee interrupted in the middle of a high level management meeting and indirectly critizised them for their leadership.
But before they could voice any objections they were stopped by Simon's big laughter.
"Good job John, I really appreciate your effort. But next time please don't interrupt the meeting next time without having any prior knowledge about the topic.
Nonetheless, you are absolutely right", said Simon while giving Dennis and Tanja an understanding look.
A smile appeared on Simon's face.
"I spent all of yesterday thinking about exactly that."
He reached down beside his chair and placed a thick leather portfolio onto the conference table.
It landed with a dull thump.
Everyone immediately looked at it.
"What is that?" Dennis asked.
"My Sunday."
Simon slowly opened the portfolio. Inside were hundreds of hand-drawn sketches. Some were rough pencil drawings. Others had detailed anatomical notes. Several had been fully coloured using markers and watercolours. Every page depicted a different creature.
Some resembled dragons. Others looked like turtles, foxes, mice, birds or insects. One page showed a tiny yellow mouse with red cheeks. Another featured a sleeping giant blocking a road.
There was a blue turtle carrying a shell. A small green dinosaur with a bulb on its back. A fiery orange lizard with a burning tail. There were ghosts, plants, fish, serpents, prehistoric creatures and dozens of animals unlike anything anyone in the room had ever seen.
"...You drew all of these? Steve blinked.
"They're an entire world. I call them Pokémon. The name comes from 'Pocket Monsters" Simon nodded and explained.
Simon looked around the conference room before speaking again, allowing everyone a few moments to examine the hundreds of sketches spread across the polished wooden table. He picked up one of the coloured illustrations before placing it in the centre of the table where everyone could see it clearly. The image of Pikachu.
"Throughout history, companies have earned fortunes by selling products. They manufacture a toy, a board game or a film, sell it to the customer and then move on to the next idea. I want to try another path this time. Based on those pictures I want to create a TV series, a handdrawn animation. Afterwards we will lounge a handheld device that I will explain later. It could be considered an electronic pet. This will lead to board games, toys and whatever fun things we can come up with. It will be our first try of creating an IP. Something we can develop for many years to come. I want to create a product that everybody cares about. Once we accomplish that, every new product automatically strengthens every other product instead of competing with it."
Dennis slowly nodded while listening.
"So you don't actually care which product reaches the market first?"
"Exactly."
Simon smiled.
"I couldn't care less whether people discover Pokémon through an arcade cabinet, a television series, a picture book or a toy sitting on a store shelf. What matters is that every one of those products introduces them to the same world, the same creatures and the same characters. Once that emotional connection has been established, customers will naturally seek out everything else connected to that universe."
He looked directly at Dennis.
"That is why I want you to establish an entirely new licensing department. Use all of the stuff we currently employ and don't use efficiently, like John Chambers already suggested. Atari should never attempt to manufacture every product itself because doing so would require enormous investments while distracting us from our real strength. We will own the intellectual property behind Pokémon and license the brand to carefully selected partners who already possess the factories, distribution networks and expertise necessary to produce toys, clothing, school supplies, books, puzzles, board games and hundreds of other consumer products. Every one of those companies will pay Atari for the privilege of using our characters while simultaneously advertising our franchise through their own products."
Dennis couldn't help but smile and be fascinated by this idea. IP were not yet established as in the 21st century.
"So even when another company sells merchandise, they're effectively expanding Atari's market." Dennis added.
Simon then turned towards Tanja, who was still studying one of the coloured illustrations.
"Your responsibility will be even more important because these creatures cannot simply exist on paper. They need personalities, friendships, rivalries and dreams. Children don't fall in love with character designs alone. Therefore, I want Atari to establish its own animation division whose primary objective will be to bring our stories to life and into the living room of families."
"You mean an animated television series?" Tanja looked up with genuine interest.
"Eventually several of them," Simon replied. "The first series should introduce the world and its rules while familiarizing children with the original one hundred and fifty Pokémon. Afterwards we can produce television specials, feature-length animated films, educational programs and holiday episodes. The important point is that these characters remain part of children's lives year after year instead of disappearing once an arcade machine loses popularity."
"And where do the games fit into all of this?" Steve finally joined the discussion.
Simon walked towards the whiteboard before drawing several arrows that connected the words Animation, Games, Books, Toys and Merchandise into a circle.
"The games are not advertisements for the television series, nor is the television series an advertisement for the games. Every part of the franchise strengthens every other part. A child who watches the cartoon will want to play the game because he already knows the creatures. After playing the game, he'll ask his parents for a toy of his favourite Pokémon. While reading a picture book before going to sleep, he'll discover another creature that appears in the next arcade release. Every single product increases the value of every other product, creating a cycle that becomes stronger with each passing year. Once we manage to kickstart this project and establish this self-reinforcing cycle we will never have to worry about losing money in the future and our risk factor will be reduced incredibly low. This is super important for our valuation and how the outside world will look at Atari." Simon explained patiently. He needed the management team to understand the importance of this project.
"Currently we are earning a lot of money every month. Basically 50 - 60 million dollars. I am certainly proud of you all and our achievements. But the truth is, our earning power could break down if the market will not accept our next game. I am 100% believing in us, but the valuation of Wall Street our the outside world of Atari is always only depending on it's next game right now. There is no stability in our company. But it's not that bad. We are very young and growing. It would be starange if we were already as stable as companies existing for many decades. But this Pokemon IP could be our entry into stability and become an important factor for our future IPO. And even if we fail, we can afford it with our current earnings. But the management team in this room owes it to every employee sweating in the production workshop outside to try and grow this company into a stable enterprise that will secure their jobs and wealth in the next 50 years. And this is what I am trying to do here!" Simon explained excitedly, while clenching his fists together.
Nobody started clapping, but Simon could feel the excitement from everybody in the room. He truned directly to Gunpei Yokoi, who had been silent until now:
"As for your department Gunpei, I want you to forget about impossible hardware specifications I described for NBA Jam and focus yourself of the concept of miniature electronics. Among the documents inside that portfolio you'll find my initial concepts for small electronic companion devices based on these Pokémon. The technology simply doesn't exist yet, which means I don't expect working prototypes anytime soon. I want you to begin researching low-power electronics, miniature displays and efficient battery systems because one day I want children to carry their favourite Pokémon everywhere they go. They should feed them, train them, watch them grow and become emotionally attached to them. By the time the necessary technology becomes affordable, Atari will already possess both the hardware knowledge and the world's most beloved collection of characters. I guess the first samples of such devices will be available around 1978-79. You have a lot of time to engage in research and create patents for Atari."