Terauchi agreed with this assessment.
Industry insiders had long seen the signs of decline in Japan's semiconductor sector.
"As for memory media," Takuya Nakayama continued, "current flash memory prices are exorbitant. SanDisk has always been a technological pioneer, but they operate on a high-premium model with no cost advantage. Moreover, being a purely American company, even if Sega invested heavily, we wouldn't gain access to core decision-making. Toshiba, which has the best cost control, is the private domain of the Zaibatsu; we can't even knock on their door."
"So?"
"We can only wait," Nakayama spread his hands. "We'll keep an eye out for emerging technologies in the market that might allow us to get in early. For now, the mask ROM technology used in cartridges is mature and cost-effective. It can hold out for a few more years. This isn't something we can rush."
The office fell silent.
The only sound was the faint hum of the air conditioner.
Terauchi picked up his teacup and finished the lukewarm tea.
The business-level discussion was over.
It was time to talk about power distribution.
"Even if we succeed in acquiring a stake in TSMC," Terauchi said, looking at Nakayama and posing the core question, "who will represent Sega on its Board of Directors?"
The map of Yan State was finally fully unfurled, revealing the ultimate plan.
Appealing to the board members who held real power was useless; empty promises wouldn't work. They needed tangible benefits.
"Of course, it's you," Takuya Nakayama answered without hesitation.
He began listing his reasons: "You've cultivated relationships and influence in Hong Kong and Taiwan for years. When it comes to dealing with local conglomerates and government representatives on the TSMC Board of Directors, you're far more skilled than anyone at Sega. Plus, you're already overseeing the entire Greater China supply chain and production operations. This means you can handle everything without needing to involve others. Your involvement would be the easiest way to gain the trust of TSMC's entire decision-making layer."
This speech elevated Terauchi's value to its peak and offered a concrete promise of power.
Once Terauchi joined the TSMC Board of Directors, his position at Sega would become unassailable.
Terauchi's expression relaxed.
"You clever kid," Terauchi said, setting down his empty teacup. "You've calculated this very well. You've passed this hurdle with me. I'll vote for you on the supply chain issue."
Takuya Nakayama was about to speak when Terauchi cut him off with an addition.
"Don't celebrate too soon," Terauchi warned. "Getting my vote was easy, but you'll have to convince Hatano on your own. His focus is entirely on the Mexican plant now. To meet the growing North American market demand, he's overseeing the construction of a second production line there. The situation there is completely different from Greater China. The policies in Old Mexico change three times a year, and it's a real headache. You won't be able to sway him with just sweet talk."
"Of course," Takuya Nakayama replied, standing up and straightening his suit jacket.
"If I can't even handle this minor trouble, how would I dare take that position?" Takuya said with a relaxed, confident tone.
April had arrived, the cherry blossom season was over, and the streets were already feeling the heat of early summer.
After his meeting with Director Terauchi, Takuya temporarily set aside plans to meet with other board members and focused all his energy on another front.
Less than two months remained until the first E3 Expo in Los Angeles.
Oguchi Hisao pushed the door open, carrying two thick file boxes.
The second-in-command of Sega's Executive Office had been working around the clock lately, with dark circles under his eyes, yet his suit remained immaculately pressed.
"Managing Director, here's the final version of the IDSA conference manual and the list of confirmed vendors," Koguchi said, placing the file box on the desk and spreading the documents out in organized piles. "Also, I've compiled the progress report on our booth materials and exhibition items."
Takuya Nakayama opened the manual at the top.
Though officially an IDSA project, Sega, as a co-founder of the association, couldn't afford to skip the review process.
The manual's layout was professional, with restrained yet sophisticated color choices that avoided the cheap feel of a street arcade.
Venue maps, schedules, and media interview room locations were clearly marked.
"Not bad. Not as rough as I expected," Nakayama said after flipping through a few pages. "Did the university students IDSA hired do this?"
"They handled the basic work," Koguchi replied, pulling out a chair and sitting down. "But the overall coordination was managed by a senior manager IDSA poached from an exhibition agency at a high salary. The students from the United States have enthusiasm to spare but lack experience. In their own words, they're all about being 'pure and foolish.' They're fine for guiding players on-site, handing out flyers, or even detailing the exhibition plan, but for strategic planning and overall layout, you still need professionals."
Takuya Nakayama nodded.
One can never be too careful when dealing with people. If the exhibition manager were to tamper with the floor plan and divert traffic away from Sega's booth towards Sony or Nintendo, it would be like a dumb man eating bitter melon—a silent, bitter ordeal.
"Have you double-checked everything?"
"Triple-checked," Koguchi replied crisply. "The main booth location, aisle widths, and lighting allocation all strictly adhere to our original plan. No one has been secretly sabotaging us."
Takuya Nakayama tossed the manual back onto the table.
Oguchi Hisao had also been closely monitoring the media promotion.
Major Western gaming magazines such as Nintendo Power, GamePro, and Electronic Gaming Monthly, as well as some tech-focused newspaper sections, had already run full-page ads for GG a month in advance.
"The early promotion was mainly for visa, flight, and hotel arrangements," Koguchi explained. "June is peak tourist season in Los Angeles. If we don't give players and media enough advance notice, the venue will be empty, and our whole effort will be wasted."
Takuya Nakayama pulled out a list of attendees—the core executives from each participating company.
A quick scan confirmed his expectations.
Shigeru Miyamoto was leading Nintendo's delegation.
Ken Kutaragi's name stood out prominently on Sony's list.
Capcom sent Yoshiki Okamoto, while Namco, personally selected by Masaya Nakamura, appointed Hideki Kanno.
Konami, Koei, Square, and others all sent their top-tier producers.
Notably absent were Minoru Arakawa, Nobuyuki Idei, and those suit-wearing bureaucrats who only cared about financial reports.
"It seems everyone's on the same page," Takuya Nakayama said, handing the list to Hisao Oguchi. "No one wants to hold a corporate sales pitch at the first E3."
"They've all bought into the 'products first' approach you set," Oguchi Hisao replied, taking the list. "After all, no one wants to bore players with a dry PowerPoint. Everyone wants to let their games speak for themselves—it's the safest way to avoid a disaster."
With the external matters settled, the real focus turned to Sega's own arsenal.
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