Chapter 287
Handheld gaming consoles are also a money-making tool, because of their portable and relatively low prices, which also makes such gaming consoles very popular.
Historically, Nintendo and Sega's handheld game consoles were counted with tens of millions of units, especially Nintendo's gameboy, with sales reaching tens of millions of units and enduring.
Although the handheld game consoles seemed relatively simple during this period, they were also innovative for today's players.
In the past, players could only go to a special game hall to play games. After the home game console came out, they could play games at home. However, the home game console was still a little expensive for ordinary families.
Many families can afford it even if they grit their teeth, but they may not be able to bear such expensive "toys". It is better to use money for household expenses or save them.
However, there is no problem with the handheld game console. Faced with the expectant look of their children and the relatively low price, many parents should open their wallets generously.
When the handheld game consoles are launched into the market, Honor Electronics' layout in the gaming industry will be basically completed, and the rest will be to continuously improve and upgrade existing products.
Although computer games will also occupy an important position with the development of technology, this is a software after all, especially the game software Lei Yunrong is even more worthy. Not to mention that he is familiar with the popular computer games in the future, just waiting for computer games to become an important part of the game market, Honor Electronics will also grow into a game giant.
For giants, if they can't handle it themselves, buy, buy, buy, acquire teams that can develop big-selling games, or even learn from Penguin and set up several more studios to let them fight each other, and the winner is the king.
So Lei Yunrong is not worried about missing the computer game market at all. Besides, if it is more profitable, the profit of hardware is much higher than that of software.
Lei Yunrong was not worried about any mistakes about Honor Electronics' first handheld game console. Yokoi Junpei's ability is trustworthy, especially now at the peak of his creation.
In addition, Lei Yunrong had previously communicated with him about his ideas about handheld game consoles. He believed that this time, Junhei Yokoi could produce products that were much better than in history.
"Lei Sheng, how many game consoles do you expect to sell on handheld games every year? In this way, we can place an order from Junyao Technology, so that Hu Sheng can build a factory more conveniently."
"Five million units!" Lei Yunrong said firmly.
Now this is Honor Electronics' exclusive business, without any competitors. Globally, if you sprinkle five million units, you won't splash any water.
This handheld game console is not technical enough, and some electronic manufacturers can easily create it. There will definitely be many followers and imitators at that time. Even if Lei Yunrong has confidence in his products, he cannot guarantee that his products can still dominate.
So the time when it was released is the best time to make money. Lei Yunrong also plans to prepare enough goods in advance and bite off the biggest piece of this first wave of bonuses first.
Of course, this operation will be very expensive, but Lei Yunrong is confident that he will not be able to throw it into his hands. Besides, Honor Electronics now has the ability to do this with capital.
If it weren't for the concern that he would not be able to digest so much production capacity in the future, Lei Yunrong would have wanted to place an order of 10 million units, but this would have caused Hu Junshi to be a bit of a scam.
So take it slowly. If you are too radical, you may even be able to get rid of the eggs.
Lei Yunrong suddenly remembered something at this time and couldn't help but ask:
"Zi Xing, we have done so many projects this year. Is there enough funds?"
After Lei Yunrong acquired Hutchison Whampoa, Xiangjiang's basic plan was completely stabilized, so he did not need to continue to withdraw funds from Honor Electronics.
However, Honor Electronics itself has also spent a lot of money this year. The first thing is to increase the investment in scientific research.
In addition to supporting Honor Electronics' own R&D team, including Xiangjiang and the UK, it also has cooperation with major universities in Xiangjiang, mainland China and Wanwan.
Since the mainland has just begun to cooperate, the funds invested are very small, but Xiangjiang and Wanwan have been working together for two or three years. The impact of Honor Electronics' cooperation with them has begun to ferment, which has attracted more people's attention and attempts to apply for projects.
In addition, Lei Yunrong had already decided to focus on investing in scientific research at the beginning of the year, so the funds investing in scientific research this year were several times that of the beginning.
In addition to the expenditure on investment and research, there is also the expenditure on acquiring the company.
Acquisition of Acon in the UK and the acquisition of Computer Garden in Amelica, as well as some miscellaneous small projects, also cost a lot of money.
Of course, these two parts are just small heads, and the big head is still the department under He Guoyuan's helm.
Because RCA's motherboard production line was a bit behind before, and although it could still be used, Honor Electronics wanted to become a century-old enterprise, so Lei Yunrong certainly didn't want any problems with its very important component motherboards.
So after everyone's discussion, they unanimously decided to upgrade it and relocate the motherboard factory to Wanwan.
So in fact, this is equivalent to rebuilding a factory with an annual output of two to three million motherboards.
Just this item alone cost nearly 200 million US dollars, so Honor Electronics is not only well-known in the gaming industry in America this year, but also well-known in the manufacturing industry.
After all, not everyone is willing to spend $100 million or 200 million to build a factory. Ameriga likes such a customer the most.
Therefore, Honor Electronics' spending this year is also quite considerable.
Lei Yunrong also knows that Honor Electronics is still making money this year, but he is always not at ease without getting specific data.
However, Huang Zixing couldn't help but smile when he heard Lei Yunrong's words:
"Lei Sheng, your concern is a bit unnecessary. You should know that our profit last year was $600 million. This year we launched a home game console. You wouldn't think that this year's profit is not as good as last year."
Seeing Huang Zixing's expression, Lei Yunrong knew that his worries were a bit redundant.
"To be honest, I have been prepared for my own mentality that the profits are not as good as expected this year. Because most of our focus this year is not on games, the number of newly launched games is not only small, but also the quality is not as good as before."
“So I think the profit this year may not be as good as last year.”
"Lei Sheng, you may have thought it wrong. What you just said is actually the fact that our arcade sales for our new game this year are indeed the worst sales performance since our establishment."
"But you may have forgotten Lei Sheng, the arcade market is still growing. So the arcade sales of our previous classic games have also increased."
"So, in summary, our total sales of arcade machines have been shipped by the end of November, and the orders for December have also been released, so the sales of arcade machines this year have exceeded 600,000, which is almost the same as last year."
Lei Yunrong couldn't help but smile when he heard this data.
At present, due to the large shipment volume of Honor Electronics, the cost has long been reduced. The profit of an arcade machine is nearly 1,200 US dollars, so these 600,000 units are more than 700 million.
From this point of view, the previous expenses were not a problem at all. Even Lei Yunrong was thinking about whether to repay the 300 million US dollars of loan owed to Goldman Sachs.
"Okay, in this case, our funds should be abundant. Let's see how much surplus we have until the end of the year. Without affecting next year's work plan, see if we can repay the loan from Goldman Sachs."
"As long as we pay back this loan, our Honor Electronics will be completely light-loaded."
Huang Zixing continued: "I think this problem should not be big, but do we need to repay the loan in advance in Lei Sheng?"
The 300 million US dollars was borrowed by Lei Yunrong when he acquired RCA's electrical appliance department and General Electric. It has been almost two years now. The loan was set for a three-year period and it expired in 1980s, and the principal and interest were required to be paid together.
Although the disposable funds are much less this year, they also have a year's interest. The interest rate for 300 million US dollars a year is at least 20 to 30 million US dollars.
Isn’t it good to use this money to build a building? Why bother to get cheap Goldman Sachs?
"If you have money, you should pay it back first. Although Goldman Sachs loaned us the money, it did not make any concessions in interest and also slaughtered us. Moreover, we have no place to spend a lot of money in the past two years."
"Okay Lei Sheng."
"By the way, how is our Honor FC selling?"
"It's sold well. So far, including the orders I've received, there are nearly 200,000 units."
Lei Yunrong couldn't help but nodded, but the sales volume was quite good. Honor FC was launched in August this year, and it has only been less than four months since then, which is almost the same as Atari's sales.
You should know that Atari has been working in the home console market for two years. This also shows that the final competition is still the quality of the game, and Honor Electronics has the most lacking in classic games. It can be said that it is only a matter of time before it surpasses Atari in sales.
The price of a Honor FC is 128 US dollars, the profit is about 60 US dollars, and the profit of 200,000 units is only 12 million, which can be said to be less than a fraction of the arcade profit.
The current situation is indeed the case, so many game manufacturers are now entering the arcade market, which has also made this market uneven. Later, the Armaica arcade market collapsed, not only because of Atari, but also because of these shoddy small factories.
The market for home game consoles is still in the development stage. Lei Yunrong is mentally prepared for low sales, and in the future it will eventually belong to home game consoles.
From this we can also see that before the game company Atari was acquired by Warner, it was indeed a very outstanding and very visionary company.
Arcade was invented by someone. When the arcade market was about to reach its peak, he resolutely went to build a home game console.
Compared with Honor Electronics, Atari is missing Lei Yunrong. They don’t know which game can be sold well, so they cannot make a lot of money like Honor Electronics. In the end, they have to accept Warner’s investment because of insufficient funds for developing home game consoles.
This also laid the groundwork for Atari's failure in the future, because Atari's founder was kicked out of Atari by Warner as a major shareholder this year.
Warner wanted to make money by investing, so Atari gradually became eager for quick success, which also laid the groundwork for the subsequent collapse of Atari.
"It's already good to be able to sell so many in such a short time. This fact has to be taken slowly. Atari was even more difficult than us at that time."
"Lei Sheng, the employees in our Honor Electronics Factory are a little uncomfortable now. They used to work overtime every day, but now they only take one shift, and there are three days off a month." Huang Zixing said with a smile.
"Then nothing happened to these employees, right?"
"Of course not. Although these employees have made less money in the past few months, they also know how valuable our job opportunities in Honor Electronics are, so no one wants to leave easily."
"So some people left?"
"Yes, some people don't know if they are short of money or are short-sighted when they see money. They went to Junyao Technology to work. Because of this, Hu Sheng has also specially looked for me."
"It doesn't matter if some people leave, it can be considered as letting this pool of water flow, as long as it's not most people want to leave."
Sometimes people are like this. When you get used to earning 10,000 yuan a month, you will definitely be very uncomfortable.
After all, you are used to the consumption level when you can earn 10,000 yuan. Now that the quality of life is halved, you will definitely be very uncomfortable, and it is difficult to go from luxury to simple.
So Lei Yunrong would not blame them, nor would he think that these people were ungrateful, they actually didn't owe them anything. Although Honor Electronics paid them a salary, they also paid back with their own hands.
Through this communication with Huang Zixing, Lei Yunrong also had a slightly comprehensive understanding of the recent situation of Honor Electronics.
It can be seen that Huang Zixing is still very responsible and remembers a lot of data very clearly. At the same time, he also wrote it clearly in documents when reporting.
Lei Yunrong took a sip of tea and continued:
"Zi Xing, the next thing is two main things, one is Sega's acquisition, and the other is to communicate with Junyao Technology about the factory construction of handheld game consoles."
"You have to work hard during this period, and I won't interfere this time."
"Laisheng, don't worry, these two things will definitely be done, so you can rest for a few days."
Lei Yunrong certainly believes in Huang Zixing's ability. With the years of experience, he has been trained and is also the president of a large company with a global vision.
Huang Zixing and He Guoyuan chatted with Lei Yunrong for a while before leaving.
Shortly after they left, Lu Yujuan came to report that Jason Terry had come.
Chapter completed!