The head office of Sega's Home Console Division.
In front of Sato Hideki's desk sat a deep, overstuffed sofa—anyone who sat down would sink helplessly into it and could only look up at him.
It gave Sato a sense of lofty control; anyone who took that seat was naturally at a disadvantage.
But there were always a few exceptions. Kentaro had never cared for such theatrics, and now another person had joined that tiny list.
Kobayashi Tetsu.
Kobayashi lounged back, one leg casually crossed over the other, peering at Sato through the gap formed by his raised legs. Though technically he was the one looking up, something in that gaze made Sato feel as if he were the one being looked down upon.
Sato drew a long, steadying breath.
"Kobayashi… kun. In Japan, people who lounge around like that get dragged out and disciplined with a mental-focus rod, you know!"
Kobayashi only spread his hands. "And what does that have to do with me? I'm American. I haven't even finished the naturalization exam. You can't use standards meant for Japanese citizens to scold a foreigner like me."
Sato choked on his words.
He stared at Kobayashi, visibly wrestling with some internal struggle.
Just as Kobayashi began wondering if that expression was the lingering side-effect of decades-long constipation, Sato finally spoke.
"Atlus Studio has grown quite well these past six months. This is inseparable from Sega's special accommodations. The royalties that third parties should pay—you've paid none. Various fees—exempted. Even your revenue share is the highest. You're not required to provide any guarantees either… Kobayashi-kun, you're well aware of all this."
Kobayashi was indeed aware.
Atlus's situation was unique. The studio operated under Sega's name—neither first-party nor third-party.
Sega invested nothing into the studio, but in turn, the studio bore no obligations to Sega.
And because of that "first-party" label, Atlus was exempt from all the royalties normally required of third-party developers.
It truly was special treatment.
But Kobayashi only asked innocently, "Ten percent is 'special treatment'? Why not just give me fifty."
Sato's pencil nearly snapped then and there. His grip tightened, knuckles whitening, the pencil audibly beginning to crack under the pressure.
"To publish a game, Sega goes through an entire pipeline, and the profit margin isn't even twenty percent! You take ten! Young man, do not be greedy! At fifty percent, Sega would lose thirty percent on every game we sell!"
He forced himself to calm down—barely.
"You also know what's been happening recently. Sega has decided to offer more favorable terms to third-party developers. Atlus counts as a third-party in practice, but since you've never paid royalties, we'll set that aside for now. Starting today, Atlus's revenue share will be raised to twelve percent. Someone will draft the updated contract for you to sign."
Kobayashi ran the numbers in his mind.
To be honest, twelve percent was outrageous.
In the publishing world, it was a heavenly sum.
Put it this way—
The last person in the industry to get more than ten percent royalty was Lu Xun. Beixin Publishing had offered him twenty percent—losing money deliberately—just to use his name to attract young authors.
Meaning: in a capital-heavy industry like publishing, twenty percent was enough to bankrupt the publisher; at fifteen percent, profits were razor-thin.
Twelve percent from Sega? That was father-level treatment.
Kobayashi finally stood. "Then I have one more condition."
Crack.
Sato snapped his pencil clean.
Kobayashi watched, expressionless, as Sato tossed the two broken halves into the trash.
The way Sato grit his teeth reminded Kobayashi of a cat desperately trying to hiss but accomplishing nothing.
"Say it. And don't make it unreasonable."
Kobayashi said, "I understand what two percent means. It means Sega's profit from Atlus titles will be extremely low. I'm not some Venetian merchant squeezing every coin, so my suggestion is: from now on, the promotional work for Atlus games should be handled by Atlus itself."
Promotion, not publishing.
Publishing was the entire process from cartridge manufacture to sales. Promotion was only one part of that.
But now he wanted full promotional authority.
Sato froze for a moment.
Then his teeth clenched again.
"You do realize that a company of Sega's size can generate promotional impact your tiny studio could never match!"
Kobayashi lifted both hands again, wearing that punch-worthy look.
"When power is used in the wrong places, more people just means more useless effort. We're small, so we can focus where it matters. Your Japanese-style slow-motion promotion drives me crazy."
In terms of publishing, Kobayashi truly needed Sega. Without Sega, there was no way to manufacture cartridges.
The royalty system ruled everything—every game cartridge had to be manufactured through Sega or Nintendo; an individual could not produce their own.
And even if he could find an assembler, his production cost alone would never match Sega's.
So he did not touch publishing. He wanted only the freedom of promotion.
Sato frowned deeply.
"That tone of yours—did no one teach you to respect your elders in America? Fine. If you insist on taking over the promotional work, we'll add a clause to the contract: all of Atlus's promotional work will be handled by Atlus. At your own expense."
Kobayashi spread his hands.
Deal.
…
…
Because the SG-2000 and its bundled Duck Hunt were already nearing release, he did not need to handle the promotion for this one.
But according to the revised contract, after receiving twelve percent, he would handle all future promotional work.
Which suited him perfectly.
Before the SG-2000 hit the market, he wasn't planning on making any new games anyway.
After leaving Sega, Kobayashi met Yuji Naka at Old Dixie Family Restaurant.
"Cheers!"
The two nearly-eighteen-year-olds, who couldn't drink alcohol, clinked glasses of orange juice.
"Starting today, Atlus games will have a twelve-percent revenue share."
Kobayashi said it casually.
Yuji Naka's head jerked up, eyes full of awe.
"Kobayashi-kun… can Sega still make money like that?"
"Of course. Never underestimate how big companies make money."
Kobayashi flexed his wrist and instructed him offhandedly, "Go file the paperwork at Sega. From now on, you're officially part of Atlus. I'll start you at 150,000 yen a month."
By 1985, Japan's inflation would probably push that to 300,000 yen.
But that didn't diminish Naka's emotion in this moment.
Just months ago he'd been a probationary worker earning fifty thousand yen.
Now—one hundred fifty thousand.
The sheer happiness left him speechless.
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