Capítulo 11: Trial Results
Over the next two weeks Atari's employees tested the new arcade machine in roughly 40 different bars in New York and the test results were overwhelmingly good and no software or hardware problems could be found. The great success spread very quickly to many business owners in New York and Simon received many calls and requests to buy arcade machines. On April 10th 1970 Simon called all the important employees for a meeting at the factory in Staten Island.
"The trial phase was a great success. Now it is finally time to bring the game we all worked so hard for towards real greatness. We already received many orders for our arcade machines and if we spread this from New York to all of the United States and even the whole world, especially Japan and Europe, we will reap incredible benefits. At least the data we gathered during the trial phase leaves me with much hope for the future success." Simon explained to his important partners.
"We must also take into account the serious shortage of the number of our arcade machines, which will also increase the proportion of data. However, we must also consider the issue of the upper limit of the number of players on one machine. There may be more people who want to play, but when we see people If it's too much, then give up." Dennis Watson also continued with his own observations.
"Then we can only wait until it is launched in batches to see the situation. Production capacity must also be improved quickly. In addition, let the technical team collect quality problems and report any abnormality, and then send engineers to analyze the reasons." Simon nodded and said.
He naturally knew that this kind of classic game would definitely become popular. In this era, there were too few entertainment projects. There were only movies, TV series and large-scale sports games. But these are not something you can experience anytime you want, and these entertainment products are also all one-offs. It is interesting the first time, but the interest will drop sharply the second time. Most people will not even watch it a second time.
But the game is special. People can control the game characters. Different people will have different results at different times. This brings great variables to the entertainment. It is different every time. This is the greatest fun and attraction.
Of course, the same problem will arise. The more you play it, the more it will become boring. But as long as there are more variables, players will be able to persist for a longer time. For bar owners, this means that more people will play repeatedly. , the income will naturally be higher.
As the bar owner's income increases, the demand for arcade machines will naturally be higher, and Atari will naturally be more profitable.
"The factory will have 200 arcade machines built next week. Our pricing in the United States has not yet been determined. According to the recent feedback data from the trial in New York, the sales department now hopes to introduce them to many bars. The demand is huge. Bar owners can order one for 3,500 US dollars, and it comes with loan cooperation with Citigroup. If the market is still in short supply, you will need to increase the price from the terminal. If the demand drops in the future, you can discount and reduce the price." Tanja Crawford said with a smile.
"Okay, let's take $3,500. What is our cost now?" Simon then asked, similar to the sales logic of cars, which can be imitated on many products. If the sales are good, the terminal will increase the price; if the sales are not good, there will be a discount.
Moreover, this is a commercial product, not for civilian use. SImon doesn't care about reputation. On the contrary, if he owns a car brand, he may not necessarily use this trick.
"In order to optimize the game interface, Woz added several more chips and electronic components. Currently, due to the small output, the cost is estimated to be around US$1,500. In the future, when the output is increased, the procurement cost will be reduced a lot, estimated to be reduced to US$1,300. This does not include the terminal sales costs in the United States."
Dennis had already done relevant preparations and spoke the answers fluently.
"As for dealers, we still have to find them. Even if we have the contact information of many bars in the United States, we can't really contact them one by one. However, this can also be a reason to lower prices for dealers." Simon said with a smile. .
Even if telecommunications and mobile phone technology develop to the extreme in later generations, it is impossible for a company to directly contact all terminal channels, which will exhaust itself. Furthermore, no matter how large a company is, it is impossible to understand all regional conditions, only local professionals know best. Sharing some profits can ensure the maximum sales volume and solve some minor problems at the same time. This is the most suitable business cooperation model.
"Arcade machines are a new industry and there is no ready-made stable supplier. Who should we look for?" Dennis said with a frown.
"Don't worry, our production capacity won't increase so quickly. In the early days, we rely on my family's channels and the relationship with these bars, which was enough for us to cope with it for a while. During this time, we can choose the right channels." Simon said calmly.
In fact, this issue of dealers has been considered before, but it is not suitable to finalize the product before it is released or has not been verified by the market, because the contract signed in the early stage will definitely bring the channel party more profits. This is an inevitable rule for new products to be launched. It is an almost eternal truth that channels are king. Unless it is in the early stages of the development of the entire society and there is a shortage of various materials, the manufacturer has the final say.
Now, once the arcade machine proves to be popular, the right to speak will go to the manufacturer. The channel side will beg for goods, and the price cannot be determined here.
Dennis nodded and said: "That's right. At present, the market size of arcade machines is not small. The number of all bars in the United States is estimated to be no less than 50,000. In addition, some other places can also put arcade machines. The total benefits It's still very big. We need to find a few partners with connections and resources in the United States."
"Of course, the stronger the connections, the better. As long as the partner can ensure that our arcade machines sell well in the United States, I can share some profits. ." Simon nodded and said.
The current arcade machine market is not large. Atari's annual turnover in the first year will probably only be tens of millions of dollars. In the eyes of big American capital, this amount of money is not small, but it is not too much. But what the arcade market is most lacking now is something different: It is a hit game. Once this game appears, the market will explode immediately.
In the previous life, Japan's Taito Company's Space Invaders was the first game to detonate the market. However, sales in the U.S. market exceeded 100,000 units a year, with net profits exceeding US$100 million, completely detonating the industry.
In Simon's opinion, the game Snake is much better than the boring Space Invaders game. At least Snake has become a representative game on feature phones in later generations. If it was not attractive at all neither Nokia or Motorola would have chosen it as their signature game.
Snake should also be able to detonate this market newly opened by their own company, Atari, and if it succeeds, they will naturally need to find some capable partners. Simon actually hopes that people with enough vision will come to his door and ask for cooperation, if their resources are strong enough. It is not just that the other party comes to his door as if he is asking for help. Rather, he hoped for long-term cooperation with someone who has the same vision and goals and has the resources to make this vision reality. Only by sharing benefits and finding partners can Simon realize his vision of the future Atari.
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