"The cost of relocating and retrofitting an old production line is far lower than building a new one from scratch. The equipment depreciation has already been amortized over several years, so its book value is very low. Effectively, we are using a minimal incremental investment to secure a cartridge production line capable of covering the entire American market. At the same time, we can free up space and manpower at our domestic factories to fully shift toward optical discs and next-generation products. It's a win-win on both sides, without delaying either."
Once the math was laid out like this, it was very clear.
It wasn't a gamble on the future of cartridges.
It was about trading a nearly idle old production line for a rapidly expanding new market.
Minimizing sunk costs, maximizing marginal revenue.
Hatano leaned back in his chair. His lips were pursed, but the tension in his eyes had dissipated.
The North American data he brought had solved the question of "should we build it?"; Nakayama Hayao's South American report had solved the question of "who will we sell to after it's built?"; and Takuya Nakayama's technical analysis and production line relocation plan had solved the question of "where will the money come from?".
With these three issues addressed, there were no more grounds for opposition.
Yamamoto was the first to state his position: "The finance department has no objections. The relocation plan for the old line is reasonable, and the upfront investment is within a controllable range."
Takahashi added, "I agree with the technical assessment regarding handheld cartridges; it won't change within five years."
The other directors nodded one after another.
Hayao Nakayama scanned the room and saw no raised hands in opposition.
"Then it's passed. Hatano, you have full authority over the third line in Tijuana. Terauchi, coordinate with Hatano regarding the relocation of the local production line."
"Understood," both replied simultaneously.
After the meeting, while packing up his documents, Hatano lingered on the South America report for a few seconds.
He flipped to the last page and looked at the TecToy contact information and the fax date.
Three days ago.
He closed the report, shoved it into his briefcase, and said nothing.
The morning after the meeting, Hatano knocked directly on Takuya Nakayama's office door.
No appointment, no prior phone call.
When he pushed the door open, Takuya Nakayama was reviewing an exhibition materials list.
"Director Hatano, please have a seat."
Hatano pulled out a chair, set his briefcase aside, and skipped the pleasantries, getting straight to the point.
"That South America report the President presented yesterday—it was your proposal, wasn't it?"
It wasn't a question; it was a statement.
Takuya Nakayama put down his pen, stood up, and walked over to the tea table. He picked up the kettle, poured a cup of tea for Hatano, and pushed it toward him.
"How did you figure it out?"
Hatano took the cup but didn't drink right away, setting it down beside him.
"The date on the TecToy fax was three days ago. I'd been in Mexico for over half a year, and the moment I returned to the country, I held that symposium. The timing is just too coincidental."
He paused.
"I know the President's style. He rarely takes the initiative to push proposals at board meetings. He basically waits for the various departments to lay out their own reasoning and clearly define the benefits, then he makes the final decision from the middle. Bringing out a data report on South America to serve as a footnote to my proposal out of the blue—that's not his style."
Nakayama put the kettle back in its place and sat back down in his seat.
"Then whose style do you think it is?"
"Yours." Hatano picked up his teacup and took a sip. "You like to have all the favorable conditions prepared in advance, waiting to reveal them one by one when someone takes the stage. That was your approach when you pushed for the Shenzhen plant, and it was the same approach later when you organized the dumping in Eastern Europe. Once the momentum starts, no one can stop it; they can only follow along."
Takuya Nakayama smiled but did not deny it.
"However, I really must thank you this time," Hatano said, setting down his teacup. "And the President, too. I've been keeping an eye on things in Mexico for so long that my mind was completely preoccupied with North America, and I ended up overlooking South America. Once the channel data from TecToy was laid out, it showed that the Spanish-speaking market is far larger than I had imagined."
He traced an imaginary line on the tabletop with his finger.
"Argentina, Chile, Colombia, and Peru—the combined population of these countries is almost half that of North America, even if their purchasing power doesn't quite match up. If the production line in Tijuana can serve both the north and south, the payback period for this line could be even shorter than I originally estimated."
Hatano paused here, then added, "Right, if we think even further ahead about the Spanish-speaking market, we could even reach Spain itself. Europe has never localized Sega consoles and games into Spanish; it's a blank slate. Shipping from Tijuana might be a bit of a detour, but if the Spanish translation and packaging are completed right there in Mexico, the cost would be much lower than starting from scratch in Europe."
Takuya Nakayama nodded.
Hatano's reaction time was not slow. Having secured the piece of the puzzle that was South America, he had already begun to extend his reach even further.
"Economic globalization is the big trend," Nakayama Takuya said. "Now that Sega's product lines are fanned out, the market is far broader than what we see sitting in our offices in Tokyo. Mexico is uniquely positioned: to the north, it has the world's largest consumer market; to the south, a vast, untapped Latin American hinterland; and in between, the North American Free Trade Agreement acts as a bridge. Giving Tijuana more support is perfectly justifiable."
After listening, Hatano leaned back in his chair.
He was silent for a few seconds, then said something off-topic.
"I have no objections to you taking over as president."
Nakayama didn't respond, waiting for him to continue.
"I don't care much for the twists and turns in the boardroom. Who's up or who's down, I can't control much of that. I only look at whether something can grow the pie," Hatano said, his tone flat. "Terauchi has already sounded me out, and I have a general idea of the attitudes of the other directors. You've run the circuit these past few months, and you've had all the necessary talks. I won't beat around the bush with you."
He picked up his teacup and took another sip.
"What makes you different from the others is that you always grow the pie first, then let everyone share it. Instead of just having a bunch of people fight over what already exists. The matter with the cartridge production line this time is a case in point. I proposed the plan, Yamamoto and the others hesitated, and you backed it up by filling in the South American data and bringing up the old line relocation plan, sealing off all three issues at once. In the end, it passed. The credit went to my proposal, the President's data support, and Terauchi's production line coordination. And you? You just made a few technical remarks during the meeting."
Hatano placed his teacup on the table with a soft clink.
"People who do the work fear nothing more than a leader who only knows how to slice the pie. You are not that kind of person. That is enough."
Takuya Nakayama nodded at him. "Director Hatano, thank you for your trust."
Enough with the pleasantries.
Takuya Nakayama changed the subject, leaning forward slightly.
"Regarding Mexico, what do you think the current operational difficulties are?"
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