Far away in Tokyo, Takuya Nakayama watched the fax machine spit out the North American launch day sales report, casually picking up his coffee and taking a sip.
"699 dollars..." he murmured, shaking his head. "Those Matsushita appliance guys must think gamers' money grows on trees."
He tossed the report into the shredder, and as the machine whirred and devoured the paper, he delivered the final verdict on the arrogant "32-bit Era."
"Ignore them. This machine won't last two years."
In Kyoto, the Nintendo Headquarters conference room was thick with cigarette smoke.
Yamauchi Hiroshi sat at the head of the long table, a faxed list of the 3DO's specifications in his hand, his expression unreadable.
Beside him were Shigeru Miyamoto, Gunpei Yokoi, and Masayuki Uemura, a core member of the Development Department.
"Take a look," Yamauchi said, sliding the paper to the center of the table. "This is what Matsushita has been up to."
Gunpei Yokoi picked up the list and scanned it, his brow furrowing into a deep frown.
"32-bit RISC chip, double-speed CD-ROM drive, VCD playback, music listening...—" he muttered, his fingers absently tracing figures on the tabletop as if calculating in his head. "This isn't just a game console; it's like they're trying to cram half the electronics store into this black box."
"Matsushita is making a lot of noise, and Trip Hawkins is certainly good at hyping things up," Shigeru Miyamoto said, adjusting his glasses with a serious tone. "I saw their demo footage—it's vastly superior to the Super Famicom. The polygonal processing power alone is something current 16-bit consoles can't achieve."
The conference room fell silent.
No one dared take the term "next-generation" lightly. Technological obsolescence was like the Sword of Damocles hanging over their heads; once it fell, the rulers of the old era could be overthrown in an instant.
"Uemura," Yamauchi Hiroshi suddenly called out, "have you calculated the cost of this thing?"
Masayuki Uemura immediately sat up straight and pulled out a densely packed spreadsheet. "President, I had the purchasing department investigate component prices long ago. Even the dual-speed CD-ROM drive module alone is quite expensive in the current market, not to mention the RISC chip and all those miscellaneous Video Decoding Circuits—"
He paused, holding up a few fingers. "Excluding mold amortization and R&D expenses, the hardware Bill of Materials alone would definitely come to over five hundred dollars."
"Five hundred dollars?" Shigeru Miyamoto was taken aback. "Then how much do they plan to sell it for?"
"Following industry norms for consumer electronics, they'd need to add a significant markup for distribution costs and retailer profits to make any money," Gunpei Yokoi chimed in. "But this is a game console. Unlike us, who can subsidize low hardware margins with royalties, Hawkins is only charging a three-dollar royalty. That means Matsushita must make money by selling the machines themselves."
"So," a glint flashed in Yamauchi Hiroshi's perpetually narrowed eyes, "they'll have to set a high price."
"But President, this configuration is truly terrifying," Masayuki Uemura still worried, "What if—"
"There is no 'what if'," Yamauchi Hiroshi interrupted, his voice firm. "A game console is a toy for children, not a decorative piece for middle-class living rooms. Five hundred dollars? What ordinary family would spend that much on a game console for their child?"
Just then, the secretary pushed open the door, holding the latest report.
"President, the final US retail price has been announced."
All eyes instantly focused on the secretary.
"How much?"
"$699."
"Pfft—" Gunpei Yokoi, who had been sipping tea, nearly spat it out.
Without wiping his mouth, he stared at the secretary in disbelief. "How much? Say that again?"
"$699, the official Matsushita price."
The conference room fell silent for three seconds before a strange atmosphere erupted. The tension of facing a formidable enemy vanished instantly, replaced by a mocking, almost contemptuous, air, as if they were looking at fools.
Yamauchi Hiroshi didn't smile, but the wrinkles on his face seemed to relax considerably. He picked up a cigar, leisurely lit it, and took a deep draw.
"699 dollars..." He shook his head through the smoke. "Matsushita is still just Matsushita, the appliance seller. They don't understand games at all."
"They think they can win just by throwing in the most powerful hardware," Shigeru Miyamoto added with a smile. "Sega might be extravagant sometimes, with their flashy peripherals, but at least they didn't dare price their console this high. And Sega never compromises on game quality. Our success at Nintendo wasn't built on the strongest performance, but on the most fun games at the right price."
"President, so what should we—"
"Don't worry about them," Yamauchi Hiroshi said, waving his hand dismissively as he sentenced the machine, not yet a month old, to death. "This thing is just a corpse in golden armor. It won't last a few steps before it collapses on its own."
Though he spoke casually, the tension in Yamauchi Hiroshi's heart hadn't fully dissipated.
The 3D0 was doomed to fail, but the concept of "32-bit" had already captured the public's imagination.
Players' appetites had been whetted. After experiencing 3D graphics, returning to the pixelated 2D visuals would inevitably feel like a step backward.
"However," the old man's tone shifted, his gaze sharpening, "though Matsushita may be fools, they've proven one thing: the door to the next generation has been kicked open."
He turned to Masayuki Uemura, who was in charge of hardware development.
"Uemura, how many more years can the SFC hold on?"
Uemura considered for a moment. "While sales are still decent, we're in a fierce battle for market share with Sega. If we're truly going to enter the 3D era, the SFC's capabilities will definitely fall short."
"Then let's begin. Start by drafting the technical specifications for the next-generation console." Yamauchi Hiroshi tapped his pipe against the ashtray, the crisp sound like a starting pistol. "Don't let Sega, and especially that Sony that hasn't even shown its face yet, get the jump on us."
"Understood." Uemura and Gunpei Yokoi exchanged a glance, seeing the fire in each other's eyes.
"So, what's the project codename?" Shigeru Miyamoto asked.
Yamauchi Hiroshi fell silent for a moment, gazing out the window at the ancient streets of Kyoto.
"Project Reality," he said slowly, the words carrying an undeniable ambition.
Tokyo Sony Headquarters.
The blinds in the conference room were drawn tight.
Snow still crackled on the television screen, and the just-finished 3DO demo tape was ejected.
Ken Kutaragi tossed the remote onto the mahogany conference table with a sharp clack, shattering the silence.
"Those Matsushita guys who make rice cookers... that's all they're good for," he scoffed, gesturing at the dark screen with the arrogant contempt only a true techie could muster. "Who can't just pile on hardware? Stick in a dual-speed CD-ROM drive and a RISC chip and call themselves the future? That controller, it even has a headphone jack—they've practically branded 'I'm just another appliance' onto their foreheads."
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