I stole someone else's ticket to rebirth

Chapter 277 Negotiations with NVIDIA

After two years, the PlayerUnknown's Battlegrounds event IP has laid a solid foundation.

On the one hand, the game’s mechanics are fun, competitive and entertaining, and it’s also the most suitable game for socializing.

LOL is not suitable for socializing. You can only chat by typing, which is boring.

And there was basically no free time during the whole process.

On the other hand, Bai Qing made the wealth system within the game quite balanced.

The gold coins awarded after each game are not just a number, but you can use the gold coins to draw blind boxes, and you can get any props that can be bought with money in the blind boxes.

The probability is just a little lower.

It allows players who don’t spend money to also have a certain degree of playability.

In Bai Qing's opinion, non-paying players are there to serve those paying players. If non-paying players are not retained, there will naturally be no chance to retain paying players.

Earning gold coins to draw nice gun skins and character costumes is basically only a theory. Even if you play for a year, you can only get a set of ordinary costumes, which cost for forty or fifty yuan in the mall.

However, for fashion skins that cost hundreds or even nearly a thousand yuan in the mall, only ten sets are released each year in the free gold coin blind box.

The economic system within the game is the key to retaining people. People who like to spend money should have a reason to do so, and people who don't like to spend money should also be able to gain benefits. Even if they work hard all day and the gold coins they save are only worth a dime, people will still feel that they have gained something.

Similarly, for those who spend money on the game, we must not let them get tired of the game, but also make them feel that their money is well worth it.

That is to increase the rarity of props. For example, there may be a particularly good-looking gun skin in the entire server, with only 10,000 sets available, and it can be traded.

In its first year, PlayerUnknown's Battlegrounds had 50 million users worldwide, 80 million in its second year, and this year is its third year, with the number of global users exceeding 100 million.

Judging from the current trend, it will be no problem to reach 120 million users this year.

The PlayerUnknown's Battlegrounds game that Penguin Games collaborated with Bluehole on is now a niche game.

On the one hand, they adopted a free strategy, which caused dissatisfaction among millions of previous paying users.

Secondly, they lowered the image quality and modified some game mechanics in order to reduce running memory, which made many people uncomfortable.

What was the purpose of playing this game before? Wasn't it because they thought your game was better made?

As a result, you went astray!

It’s better to play PlayerUnknown’s Battlegrounds. After all, that game has more players and stronger social attributes.

Another point is that the PlayerUnknown's Battlegrounds competition is in full swing, but you are so stingy with your PlayerUnknown's Battlegrounds competition, with the highest prize of only $100,000.

Who wants to come and play?

Although the number of PlayerUnknown's Battlegrounds users worldwide has exceeded 10 million, the actual situation is that South Korean clubs have not yet formed a team specifically for PlayerUnknown's Battlegrounds because they simply don't have the money.

Instead, several Korean e-sports clubs have spent a lot of effort to form PlayerUnknown's Battlegrounds teams. As long as they achieve some results, they will not lose money, and if they can achieve top results, they can make a lot of money.

Although PlayerUnknown's Battlegrounds was updated last year, the configuration requirements were not that stringent, and the game could still be played with the previous configuration, which did not disgust users.

It has now completely replaced the previous LOL and become the most popular game in the world.

However, the gap with League of Legends is not particularly large. The highest live broadcast of PlayerUnknown's Battlegrounds is only 18 million, while that of League of Legends is around 12 million.

However, LOL has more registered users, about 200 million, while PlayerUnknown's Battlegrounds has fewer registered users.

Coincidentally, the PUBG PCL playoffs had begun, and it was announced a few days in advance that Li Yang would appear.

Many people say that Li Yang’s world championship last year was of little value. It was just a global invitational tournament, not the finals, and the competition system was not perfect.

Only if you win the championship this year will you be recognized.

Of course, those are the diehards.

Many of them are still clinging to LOL, but they just can't stand the fact that their favorite game cannot provide them with emotional value off the field, and its social attributes on the field are getting lower and lower.

In the past, I could make a few friends by playing games, but now when I go in, no one wants to get to know me.

Everyone is venting their emotions in the game, and it seems like no one is enjoying the process of playing the game anymore.

The PCL playoffs are a tournament where sixteen teams compete for spots.

In the intercontinental competition after the spring season, the North American region won the championship. At that time, many people felt that PCL was only supported by Li Yang, and the other teams were not doing well.

In the most important global finals, Li Yang must win the championship so that they can vent the emotions they have been waiting for a whole year.

Therefore, on the day when Li Yang took the stage, the popularity of the game increased by 30% compared to usual days.

The number of spectators was already high, and it increased by another 30%...

The LPL Summer Finals held at the same time had no one watching and the popularity dropped by half.

Every time Li Yang finishes a game, the barrage in the LPL live broadcast room will be flooded with comments from PlayerUnknown's Battlegrounds players.

"God Yang is here!"

"Yang Shen eliminated six people in one game. His skills haven't declined even though he hasn't played for half a year!"

"Team Koala won the game. The world's strongest team is back!"

……

In fact, Li Yang's performance was not very good, but only compared to last year.

The professional players have made significant progress this year, and his advantage is getting smaller and smaller.

However, he can still maintain a sufficient competitive level. He needs to practice more in the future, otherwise he may not be able to perform well in the World Championships.

Fortunately, this year's teammates are completely different from last year's. Li Yang replaces last year's commander position, and the other three teammates are all young and strong.

After playing for three days, Li Yang gradually got into the game.

During a one-day break, Li Yang and Bai Qing met with Zheng Yi, president of NVIDIA Asia Pacific.

As glorious as Nvidia was last year, it is having a miserable time this year.

So far, the stock price has fallen from its highest point of nearly $300 per share at the beginning of the year to over $100 per share.

The market value also fell from more than 200 billion US dollars to only 80 billion US dollars.

The main reason is that Bitcoin soared last year, and global demand for computing power graphics cards increased sixfold, so Nvidia's performance naturally ushered in an explosion.

It even received a wave of dividends at the beginning of the year, rising from US$190 to US$292.

But the dividends go away just as quickly as they come.

With the current price of Bitcoin dropping to six thousand U.S. dollars, the demand for computing power graphics cards has dropped instantly, and Nvidia's expanded production capacity is all gathering dust.

It is very dangerous for large enterprises to expand their production capacity. Once the market changes too quickly, no matter how much profit they made before, they may lose it later.

For example, if Jiying Automobile wants to increase its production capacity by 20%, it will have to spend billions. If the shipment volume is insufficient, not only will the billions be lost, but it will also have to pay additional storage fees.

No matter how profitable a company is, it can’t afford to be treated like this.

Nvidia's expansion of production capacity is not just 20%, but 200%
You can imagine how miserable they are now.

Especially when they heard that Colorful graphics cards were selling extremely well in China, they were even more confused.

Colorful uses their technology, so we are essentially a foundry and need to pay them patent fees.

Sort of like their sub-brand.

As a result, such a company, whose technology is not even the most advanced, can sell so well, with at least hundreds of thousands of units shipped per month...

Although the demand for graphics cards in games is not particularly large, it is still a market worth hundreds of millions.

So they found Aurora Studios, and the two sides had a negotiation in July.

However, at that time, the two parties had not yet determined the mode of cooperation, but only discussed the feasibility.

This time, Zheng Yi, President of the Asia-Pacific region, came in person as a result of the last conversation.

They learned that PlayerUnknown's Battlegrounds was preparing for a major update, which would have certain requirements for player equipment...

This globally popular game will undoubtedly lead to a wave of updates for hardware devices around the world.

For example, if the hardware in Internet cafes around the world is not updated, who would go online?

This is especially true for families. Generally speaking, since they have a computer at home, they will definitely be willing to spend money to update it.

Without the last communication, there would be no Zheng Yi’s visit this time.

Zheng Yi knew that Li Yang had a say in Aurora Studio, and this was no secret in their eyes.

So after meeting, he took the initiative to shake hands with Li Yang and said, "Hello, Mr. Li, I have seen your style in the game. Only people who truly love games can create such a fascinating game." "Mr. Zheng, you are too polite... Please take a seat."

Li Yang had been waiting for NVIDIA to come to him.

He has already sorted out all his holdings, among which Wanliu Global Select's holdings are worth US$1 billion. He has Chen Peipei in charge of Gangcheng, with holdings close to US$2 billion.

However, Hongcheng’s holdings are dispersed among multiple accounts, not as obvious as Wanliu Global Select.

The two chatted briefly and then officially got into the topic.

Zheng Yi said: "Mr. Li, I saw that Wanliu Capital holds nearly 1.5% of our total Nvidia shares. Thank you, Madam, for your support for Nvidia."

Li Yang asked in confusion: "Really? I don't really care about this. After all, I have no interest in the financial market."

Zheng Yi directly took out the information he had prepared long ago.

He was not going to talk about business directly. Whoever talked about price first would lose the opportunity.

He knew very well that Li Yang wanted to cooperate with NVIDIA, otherwise he would not have prepared so much today.

After seeing the information, Li Yang smiled and said, "It seems that she thinks the same as I do. We both think NVIDIA is a good company."

"Of course!"

Zheng Yi is not shy about showing off his pride.

If Nvidia had not expanded its production too much last year and the pressure this year had not been unprecedentedly great, he would not be in a hurry at all.

Good products will always sell, it’s just a matter of time.

But good products can’t be piled up like mountains…

Li Yang said: "So, I think there is room for cooperation between us..."

Hearing Li Yang speak, Zheng Yi immediately smiled and said: "Of course, a good game must have good hardware equipment. What Colorful can do, we can do as well. After all, their technology is two generations behind ours..."

“Yes, we do want to find a better business partner, but we need a certain level of sincerity.”

Zheng Yi waved his hand and said, "We at NVIDIA can sponsor PlayerUnknown's Battlegrounds for 20 million US dollars every year!"

That’s a very high price.

However, Li Yang shook his head and said, "Sorry, this is quite different from our psychological expectations."

"How could it be... Mr. Li, I am very sincere. We have never offered such a high price for any game."

Li Yang said, "Mr. Zheng, do you think our PUBG advertising fee is only worth 20 million US dollars? To be honest, the sponsors for this year's World Championship have been confirmed. The cost of the main sponsor is 120 million, and we have three main sponsors! The rest of the small sponsors range from a few million to tens of millions... For your 20 million US dollars, we will not only provide a main sponsor position, but also help you promote your products, and even take the initiative to adapt the game..."

After saying this, Zheng Yi realized that 20 million US dollars was indeed a bit stingy.

He had a lot of authority, so he made the decision on the spot: "The sponsorship fee can be increased to 30 million US dollars."

In the end, Li Yang still shook his head. "It's not just about sponsoring the entire World Championship, but all PlayerUnknown's Battlegrounds events. And this is only a small part. We need to promote your company's products to users and make them the only designated hardware equipment for this game."

Zheng Yi didn't say anything this time because he found that Li Yang could always find various excuses.

But now Aurora Studios does have the capital to negotiate terms.

So he asked, "What conditions do you think are suitable, Mr. Li?"

Li Yang asked Bai Qing to bring a document, which he had also prepared long ago.

He handed it to Zheng Yi, who said nothing after reading it.

When he first saw the amount, he thought it was a bit outrageous.

But after reading it, I felt it made sense.

He did not agree or refuse at the first time, but asked: "Mr. Li, if you can ensure the order quantity, we can talk. If not... we cannot accept your company's quotation."

The sponsorship fee of $200 million a year is too expensive. Although the company can always enjoy the treatment of the main sponsor and the company will do its best to update the game and create demand for its own products, the price is really too expensive.

According to this statement, he felt that within 60 million US dollars was reasonable.

However, in the document, Aurora Studios gave an estimated order volume of 10 million copies per year.

This is very tempting for Nvidia...

It can directly help them clear out their inventory.

Nvidia's previous GPUs of all types combined only produced more than 10 million pieces, and for GPUs with large running memory and computing power, only more than 3 million pieces were produced each year.

After this expansion, the production capacity increased to 10 million.

Nvidia's GPU profit margin is very high. A graphics card that sells for $699 only costs a little over $.

Judging from the data alone, expanding production threefold will not result in losses.

However, they found Taiwan to do the OEM work, and they have requirements on production capacity. Once the order is signed, they have to produce the products even if they cannot be sold.

Inventory costs are greater for them than production costs.

Li Yang said: "The order quantity is just an estimate, we can't guarantee it..."

Zheng Yi said helplessly: "Then there is nothing we can do. Your company's requirements are too high. After all, Colorful's monthly sales are only a few hundred thousand copies, and a year's sales are only in the millions. Millions of copies are not worth paying so much for us."

Although you can still make money with millions of dollars, the amount won’t be much.

The profit is only $300 to $400 million, and you spend $200 million all at once?
This is not in line with their standard of doing business.

Besides, he didn't have to ask Li Yang to agree. Aurora Studio had already prepared the updated version, and they certainly didn't want the cooperation to fail.

Sure enough, after he refused, Li Yang looked a little embarrassed.

"Mr. Zheng, don't rush to refuse. We can still have a serious talk."

Zheng Yi smiled and said, "Of course!"

Li Yang went on to say, "The sponsorship fee of $200 million cannot be reduced. If it is reduced, Aurora Studio will not be able to find any profit margin, and naturally will not be able to maintain the game with care."

Zheng Yi said: "What does Mr. Li think?"

"Aurora Studio can set up a special department to sign an order with NVIDIA to ensure sales of 2 million copies a year. What do you think, Mr. Zheng? Even if we can't sell that many, we can take what's left. But we have a request... You need to give us a certain margin of profit..."

Zheng Yi fell into deep thought.

Two million orders were indeed good, but just good. In his opinion, they were definitely not worth the $200 million sponsorship fee, not to mention the room for profit.

In his eyes, Nvidia must always make the biggest profit, and the profit must be several times higher than all the other links combined.

That kind of arrogance was in his bones, and he even took it for granted.

He said slowly, "If it's 3 million copies, I think we can cooperate. After all, Aurora Studios has spent a lot of money preparing a new version of the game, and I believe Mr. Li is also eager to promote this cooperation. 3 million copies is a very reasonable price in my opinion, and we are willing to give a 95% discount on the factory price."

Li Yang asked: "What if there are 4 million copies?"

"10% off!"

"What about five million copies?"

"15% off!"

For Nvidia, the profit from one million copies far exceeds the 50% discount.

Every additional one million copies is equivalent to a one-third, one-quarter, or one-fifth increase in their sales…

The profits given up only account for 5%, 10%, 15%
These are two parallel upward lines. The total profit has been increasing. Only after a 20% discount, when the total profit reaches its peak, will it stop increasing.

But he won't agree to so much.

Li Yang thought for a moment and said, "Boss Zheng, even though you know that we have spent a lot of money preparing for the update, this margin of profit is not enough for us to accept."

Zheng Yi said: "Your company predicts that it can sell 10 million copies a year. Don't you have the courage to even take 5 million copies now?"

"Five million copies is fine, of course, but I want 30% of the space!"

"Mr. Li, that's impossible. Nvidia has never been so cheap."

"Is it cheap? I think it's already very expensive... I'll treat Mr. Zheng to a meal. If we can't come to an agreement, I hope it won't affect our relationship. We may still have a chance to cooperate in the future."

Li Yang gave up the negotiation, even though he knew that graphics card prices would start to skyrocket next year and that Nvidia's inventory would be completely cleared out by next summer.

What he wants is not just the current product, he needs Nvidia's more powerful GPU.

He is just using the game as a cover, and it won't be available for purchase in a few years.

(End of this chapter)