"What does this have to do with third-party game companies? I remember we collaborated with the top international game companies this time, and obtained licenses for their top-tier game IPs. This was supposed to be our trump card, so how did it become our biggest mistake!" Edward Zamp was completely bewildered, unable to understand what was going on.
It turned out that when planning the operation of the game center, the major mobile phone companies understood that even if they had the official advantage, without games in the game center, it would undoubtedly be a huge joke.
However, when it came to actually filling the game center with games, the major mobile phone companies were in a rather conflicted state.
The original idea of the major mobile phone companies was to establish their own game development teams and then exclusively develop some small games suitable for mobile phones. But as soon as they started to implement this plan, they encountered numerous difficulties. This was because the major mobile phone companies lacked the necessary development foundations. If they needed to develop games, they would have to recruit a specialized team, which would involve astronomical expenses.
Furthermore, developing games themselves would mean no IP backing and it was destined to be a drop in the ocean. Even if each company developed ten small games, the total would only be two to three hundred games, which was simply not enough to support the stature of a game center.
After all, the oo mobile game center already offered over 5,000 different games for download, and these games were developed by professionals specializing in game development. The quality difference was incomparable.
After repeated meetings and discussions, the participating companies ultimately decided that instead of assembling their own teams to develop some small games, it would be better to negotiate and cooperate with professional game companies that had extensive game development capabilities. They invited these companies to develop games for their mobile game platforms. These game manufacturers held numerous well-known games, and once these games were adapted into mobile games, they would undoubtedly bring tremendous traffic support.
This was something the oo mobile game center had already attempted, but at the time, direct negotiations with various renowned game companies had broken down, and the collaborations had failed.
However, this time the cooperation for the game center was very smooth. These professional game companies received these companies with an attitude several times more welcoming than before, and even proactively expressed their willingness to adapt all their renowned IPs into mobile games and launch them on their game centers.
Motorola and other companies were delighted upon hearing this, feeling that Jiangnan Group and oo were indeed unpopular. What they couldn't obtain, they were now being offered freely with a simple request.
However, as soon as Motorola and other companies began negotiations with these game companies, they discovered that the game companies were demanding a 70% profit share of the game center. This condition completely stunned Motorola and the other mobile phone companies.
It turned out that the reason these major game studios were so proactive this time was that they had seen the terrifying profitability of the oo mobile game center.
According to internal whispers, in the entire year of 2004, even though the oo mobile game center had been operating for less than a year, its profits had exceeded 300 million US dollars.
While this figure might not seem like much within the Jiangnan Group, it was a rather terrifying number in the gaming industry. Its profits had surpassed the annual profits of major game manufacturer EA.
In the entire gaming circle, perhaps only a non-pure gaming company like Nintendo could have profits exceeding 300 million US dollars; all others were severely trampled underfoot.
Concurrently, according to the profit-sharing agreement, the Jiangnan Group could only take 30%-40% of the profits. The remaining 10%-20% was for the mobile platform, and 50%-60% was for the game developers.
In other words, the game developers could at least earn around 400 million US dollars in profit. As is widely known, the oo mobile game platform at the time had no major game companies onboard. It was entirely populated by independent game producers or studios with practically garbage technical capabilities.
If it were these professional game companies instead, wouldn't their profits double?
Therefore, the major game studios that had previously been indifferent to the oo mobile game center and its ilk were now completely unable to contain themselves and eagerly wanted to get a piece of the pie.
But they had forcefully rejected Jiangnan Group before. To now shamelessly grovel their way back would be too much of a blow to their pride. Moreover, Jiangnan Group would never agree to their 70% profit-sharing terms. Going there now would at best earn them around 60%, which still left them feeling somewhat displeased.
This was because once such a cooperation agreement was signed, it would mean that they would be sending money to others at this ratio indefinitely.
But to watch from the sidelines, unable to touch it, was truly agonizing.
So these major game studios hesitated and wavered. Just as they were about to bow their heads, the companies of the Game Center Alliance approached them, and these major game studios instantly found a better option.
To avoid a repeat of the previous situation where both parties parted ways without even discussing, the attitude of these major game studios was excellent, so much so that if Boss Huang had seen it, he would have been furious and exclaimed that their current good attitude wasn't due to a change of heart, but because "we've been here before."
Although these major game studios maintained a very amiable attitude, they remained firm on the crucial issue, insisting on taking a 70% profit share.
This made the mobile phone manufacturers unsure how to even begin speaking. Their plan was to offer these development companies at most a 50% profit share.
As a result, when this condition was presented, the major game studios directly turned their backs and refused to do business, stating that they would be fools to cooperate with these people.
If they were willing to accept a 50% profit share, why wouldn't they just cooperate with the oo mobile game center, which had already established a stable market? The latter could offer a cooperation share of up to 60%, with a minimum of 50%, meaning only a difference of about 20% in profit sharing. However, the base was incomparably larger than the newly established game center, and the market was incredibly stable.
Therefore, the 70% profit sharing demand from the major game studios was unyielding, leaving no room for negotiation.
The mobile alliances also felt extremely frustrated and distressed. If they agreed to give 70% of the profit to these major game studios, they would only receive 30% of the profit. In that case, it would be better to have joined the oo mobile game alliance from the beginning.
After all, they had initially promised a 20% profit share, and besides that, they didn't have to worry about anything else. Unlike now, where they not only had to painstakingly develop a game platform but also develop games themselves, undertake various promotional activities, and come here to negotiate with major game companies... None of these matters needed to be handled, and the money saved would surely be more than 10%.
Therefore, if they agreed to the other party's 70% profit sharing condition, it would be better to cooperate directly with oo.
You see, a very interesting chain of logic has formed here.
The logic of the major game studios is that rather than agreeing to your terms, it's better to cooperate with oo.
And the logic of the mobile phone manufacturers is also that rather than agreeing to your terms, it's better to cooperate with oo. This is extremely perplexing, as it seems that no matter which party agrees to the terms, it's better to turn around and cooperate with oo.
Faced with this stalemate, the mobile phone manufacturers finally proposed a new solution: since a consensus on the profit-sharing ratio could not be reached, they would simply forgo profit sharing and directly purchase the games.
This meant that the alliance would pay these major game studios to develop games, paying a one-time fee as a buyout. In return, the major game studios would receive a large sum of money upfront and would not have future revenue-sharing income. However, this guaranteed a profit and avoided risk.
After careful consideration, the major game studios agreed to this proposal.
After all, who wouldn't want to earn money with a guaranteed profit?
Moreover, revenue sharing carried risks. Many of their games, after release, had earned less than one-tenth of the development costs, leading to significant losses. Therefore, this guaranteed profit was extremely attractive.
Additionally, this method could be used to test the mobile gaming market. In any case, this was not a one-time deal, and there could be other forms of cooperation on other games in the future.
Thus, the major game studios agreed to these terms, but the mobile phone companies would have to pay a hefty buyout fee ranging from 1.5 million to 5 million US dollars per game.
This was because these major game studios were offering their top-tier IPs, such as Resident Evil, Raiden, Contra, Medal of Honor, and so on. The mere names of these games could fetch millions of dollars. Charging 5 million for a buyout fee was not expensive at all.
After all, oo's "Flappy Bird," which had no IP foundation whatsoever, generated over 80 million US dollars in revenue in a single year. Was 5 million expensive?
Of course, it wasn't expensive. And the mobile phone manufacturers were not short of money. After some bargaining, they agreed to the quoted prices.
However, when it came to actually paying the money, new troubles arose: who would pay and how much would each pay.
The major mobile phone manufacturers naturally intended for the costs to be shared equally. The smaller manufacturers naturally refused, arguing that with their small market share, they could not possibly afford to share such exorbitant costs equally.
The major manufacturers understood that it was unrealistic to expect smaller manufacturers to pay equally. Therefore, they proposed to divide the costs based on market share. However, the smaller manufacturers countered that market share was based on the past, not the present, and that a new investigation was needed.
It was only after a prolonged period of wrangling between the two sides that a funding ratio was finally reached. By this time, it was already the end of October, leaving these major game studios with only about two months for development.