California, Santa Clara County, Milpitas.
This small city, covering less than 36 square kilometers, was home to a considerable number of semiconductor companies.
Zilog's headquarters was also located here.
The conference room, decorated in a clean and modern style, featured an entire wall of floor to ceiling glass windows overlooking the parking lot outside.
A long table divided the people inside into two groups.
On one side sat Ethan, accompanied by Gerald, Kwok, and Vivian, representing GAMENOVA's hardware division.
On the other side were Zilog's engineering team and Vice President Richard.
Richard put down the document in his hands, unable to conceal the surprise in his expression.
"Mr. Ethan, this is a remarkably elegant architecture."
The document Ethan had provided described a design concept called SoC.
A specialized integrated circuit designed for a dedicated purpose, containing a complete system and embedding the required software.
As the creators of the Z80, currently the best-selling 8-bit processor on the market, Zilog naturally understood the advantages of such a system.
Compared to traditional designs that connected various chips together through interfaces, an SoC offered comprehensive superiority in performance, size, and power consumption.
"The purpose of our visit is to establish a partnership with Zilog and develop a customized version of the Z80."
Ethan gave Gerald a glance, signaling him to present another document. After receiving it and giving it a quick look, Richard raised an eyebrow.
"Mr. Ethan, I thought you were planning to build arcade chips. This NovaBox... is it your company's home console project?"
Ethan had no intention of hiding it and nodded directly.
Richard thought for a moment, uncertainty creeping into his voice.
Developing a modified microprocessor was no small undertaking, and he had to make his decision carefully.
The home console plan Ethan proposed made him smell danger.
Although Zilog maintained a respectable share of the 8-bit processor market, they were virtually absent from the home console industry.
The reason was simple.
Price.
Compared to inexpensive processors like the 6502, which cost only a little over ten dollars, the Z80 had no advantage in pricing.
Their primary markets had always been personal computers and mid to high end arcade machines.
Home consoles, however, were precisely the kind of market that didn't suit them.
"Mr. Ethan, with all due respect, an Atari 2600 only costs $199, and even then consumers aren't buying it."
"What makes you think a more expensive machine will sell? Arcades and game consoles are not the same thing."
Simply replacing the 6502 with a Z80 would increase material costs by nearly fifty dollars. For home console consumers, where even a few dollars could influence purchasing decisions, that was a fatal disadvantage.
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Combined with the severe loss of market confidence caused by the Video Game Crash, Richard simply couldn't convince himself to trust this proposal.
Even if Ethan's new architecture was undeniably attractive.
"We don't intend to make money from the hardware. We'll sell the console at cost, or even at a loss."
Ethan shook his head and dropped a bombshell.
Richard was a man who had seen plenty in his career. After a brief moment of surprise, he quickly recovered, though he remained unconvinced.
"I understand what you're saying. You plan to rapidly capture market share through pricing and make your profits by selling game cartridges?"
"That's what Atari thought too, Mr. Ethan. Now those cartridges are buried in a landfill."
Atari was the industry's greatest cautionary tale.
From a business perspective, Ethan's proposal was indeed correct. But it contained a massive hidden risk.
In 1982, nearly ten thousand low quality, derivative games flooded the American market.
Those games were what truly destroyed the industry. E.T. was certainly terrible, but in the end, it was merely the scapegoat that ignited the fuse. The real disaster had been created by Atari and Warner themselves.
Ethan spoke calmly.
"The royalty system."
"Pardon?" Richard didn't understand.
"This is a new development model I've designed. Unlike Atari's completely open development and publishing structure, this system will be far more restrictive and strict."
Ethan picked up another document from the table, turned it around, and placed it in front of Richard while explaining each point.
"First, and most importantly, all cartridges must be manufactured by GAMENOVA. Release quantities and release schedules will be determined by us. Unauthorized production is prohibited."
This rule was clearly aimed at disasters like E.T., where excessive production led to catastrophic inventory buildup.
"Second, developers must estimate their expected sales and pay a royalty fee in advance, that is, their revenue sharing portion."
As Richard listened, carefully reviewing the clauses in the document, his expression changed slightly.
It was an incredibly clever rule. It ensured that developers couldn't flood the market carelessly while simultaneously encouraging them to maximize their efforts.
For example, if a small development studio believed its game would sell one million copies, it would have to prepay the royalties for one million units.
If the game ultimately sold two million, or even ten million, copies, they wouldn't need to pay any additional royalties.
This system secured GAMENOVA's dominant position while promoting a philosophy of "quality above all else."
It was practically the complete opposite of Atari's strategy of "quantity over quality."
And Ethan was absolutely confident that the system would work.
Because this was the very path Nintendo would follow to dominate the future gaming industry.
Ethan quietly waited for Richard to finish reading the detailed regulations before continuing.
"As for how to reignite players' enthusiasm, Mr. Richard, if you're familiar with GAMENOVA, then you'll know that's the one thing you don't need to worry about."
...
The negotiations proceeded even more smoothly than expected.
GAMENOVA officially reached a cooperative development agreement with Zilog to jointly develop a specialized processor based on the Z80, along with a complete SoC chipset for a home console.
Returning to the former VideoSoft office, or rather, GAMENOVA's current Santa Clara office,
Sam was busy unpacking a large crate.
On a nearby table sat a compact plastic machine.
Its casing was entirely white, with only a few buttons and decorative accents colored magenta.
Besides the video cable connected to a display, two cords extended from the unit itself, connecting to two matching magenta controllers.
Hearing footsteps behind him, Sam wiped the sweat from his forehead and smiled.
"You guys finally made it back. I managed to get a Famicom. I had a friend make a special trip to Japan to bring it over."
Ethan's eyes lit up as he hurried over to the machine.
It was none other than the legendary original Famicom, the iconic red and white FC console.
Now, since they were going to build their own console, the Famicom was naturally something worth studying carefully.