Chapter 47: The Innovator's Dilemma

"The Innovator's Dilemma."

When Cherici clearly laid out the problems she and Pan Jieying had recently uncovered within the company, the very first phrase that popped into Gu Cheng's mind was Christensen's "The Innovator's Dilemma."

He had not expected that, merely two years into his entrepreneurial journey, the company would already be plagued by big-company disease, resulting in a situation where the tail wagged the dog and innovation was stifled.

To translate "The Innovator's Dilemma"—a term frequently encountered in MBA courses—into plain human language: "The company's business has been hijacked by its current mainstream customers."

In his business school texts, Christensen always loved using hard drive manufacturers as an example, where 98% of companies went bankrupt every 15 years—out of every 50 hard drive makers, at least 49 failed to survive past the 15-year mark.

This happened because whenever these manufacturers came up with a new technology, their major clients, such as IBM or Apple, would not buy into it and were unwilling to spend extra money procuring the new tech. Consequently, those established hard drive makers were blindsided and crushed by upstarts who had failed to secure heavyweight clients like IBM and Apple.

Applied to Gu Cheng's situation, what Cherici had just described to him was an entirely different scene:

Ever since *Legend of Mir* became a massive hit in 2001, bringing in two to three hundred million in revenue for Gu Cheng within a single year, he had naturally considered upgrading and evolving the game as software technology progressed by early 2002.

Backed by ample funds at the time, Gu Cheng had set up an independent project review department within Legend Entertainment. Its job was roughly similar to his own previous work as a headhunter: scanning the market for potential new online games with differentiation needs that they could invest in and publish.

Especially starting in the second half of the year, because Gu Cheng had partnered with Boss Li from the Baidu camp on the AdSense platform, he knew very well that the internet winter would soon come to an end, and that China Unicom, China Telecom, and China Netcom were stepping up the upgrading of network bandwidths.

Once network speeds and hardware caught up, a game like *Legend of Mir*, which had expanded by seizing the advantage of low system requirements, would be incapable of further growth. At best, it could only rely on the social and status-flexing circles formed around the game to stabilize its existing user base.

At the same time, even if existing players did not noticeably churn, everyone's online playtime would gradually decrease with the emergence of new games.

The fatality of this for a game that survived solely on selling prepaid game-time cards went without saying.

In another spacetime, although *Legend of Mir* survived for a long time through private servers and web games, maintaining a market scale of hundreds of millions in annual revenue for many years to come, there was no denying that those models were sustained by pay-to-win microtransactions for equipment rather than time-based prepaid cards.

Therefore, Gu Cheng had to remain vigilant in times of peace and seek out a successor or upgraded version of *Legend of Mir*.

Beginning in July, Gu Cheng further intensified the pressure on the project review department, slapping them with a slew of KPIs that required them to evaluate a minimum number of domestic and foreign online games each month and submit corresponding feasibility reports.

In the blink of an eye, four months had passed. While there were some results, they were all tiny fish and shrimp, with no masterfully crafted gems left to be picked up.

Before the National Day holiday, only two passable semi-finished games had crossed his radar—both chibi-style 3D MMORPGs developed by East Asian studios, one named *Angel* and the other *Ragnarok Online (RO)*.

Gu Cheng had already sent people to negotiate for both games. They were conducting talks under the identity of "Legend Entertainment" while simultaneously using shell front companies to negotiate buyouts, executing both strategies at once.

However, those games were, after all, styled in the chibi aesthetic, primarily attracting female and cute-loving players. The swaggering, big-spending young masters and societal tough guys who "felt uncomfortable all over if they didn't blow five hundred bucks a day" would show no interest in them.

The company's project review department had consistently failed to find a next-generation product that resonated with *Legend of Mir*'s core demographic.

Perhaps because he had been busy filming, even though this issue had been brewing for a month or two, he hadn't found it particularly strange—until today, when Pan Jieying sent Cherici to personally reveal the truth to her.

"Actually, the director of the project review department had already found several games with genuinely higher evaluation scores. But the operations director of *Legend of Mir* secretly bribed him to temporarily suppress the projects overlapping with *Legend of Mir*. Furthermore, he skimmed a few percentage points from *Legend of Mir*'s monthly performance bonuses to buy off the personnel in the project review department.

"This has been going on for over a month. It was uncovered by the Group's Inspection Department, and then President Pan handed the games they had suppressed over to me for review. After assessing them, I found they were indeed suspected of being undervalued, which later confirmed their private transfer of benefits."

Before Gu Cheng transferred her to the Inspection Department, Cherici had been the initial planning director and project manager for the *Legend of Mir* game. Her estimates of the market potential for similar online gaming products were naturally highly professional.

The reason Pan Jieying sent her today was clearly because Cherici was the only versatile talent under Gu Cheng who was both well-versed in internal company discipline management and proficient in online game technology evaluation.

After a brief moment of thought, Gu Cheng figured out the criminal gang's motivation: the performance and project bonuses of the *Legend of Mir* operations department were distributed in direct proportion to the game's revenue. The more game-time cards *Legend of Mir* sold, the more bonuses that group naturally received.

Once the company introduced a new project, it would inevitably siphon off promotional resources from Alipay and numerous other channels, and similar games would also carve away a small fraction of *Legend of Mir*'s players' online time. At that point, the interests of the *Legend of Mir* operations clique naturally conflicted with the overall interests of the company.

What was done was done, and regret was useless. Besides, Gu Cheng had established the internal inspection department precisely to stop losses. The matter had only been delayed for a little over a month before Cherici ferreted it out, so the losses were still within an acceptable range.

"Show me the list of those delayed projects," Gu Cheng rubbed his dry eyes, forcing back his exhaustion as he spoke. He needed final confirmation on whether those projects truly had a future.

Cherici understandingly pointed to the laptop spread out on the table: "Worried that you might find it hard to evaluate, I brought my computer along—it has more detailed project images and text materials."

Gu Cheng then sat down in the chair Cherici had just vacated, opened the folder she indicated, and began to read.

The very first project file that caught his eye dispelled all his doubts.

"*MU Online*, developed by the East Asian company Webzen. Currently still in the testing and production phase, the main framework is complete, while map and monster modeling are still being expanded. The game's standout feature is its pseudo-3D graphics engine, making it a rare non-chibi, monster-slashing, level-grinding online game currently on the market.

"The game's development model is extremely peculiar. The current client is only 50 megabytes in size, yet it is already capable of initial operation. This shows that the developers set out with the goal of first establishing a viable technical pipeline to ensure the game runs, and then rapidly expanding the maps and level caps once market feedback is positive. It is a textbook product of the new internet mindset."

The so-called "product of the new internet mindset" was identical to the practices seen in new American TV series and the newly emerged Qidian Chinese Network—spend a bit of money first to make something barely usable, test the market reaction, and if there's money to be made, flesh out the skeleton. If there's no money in it, chop it off and cancel it.

Other online games of the same period hadn't learned to be this clever; they wouldn't dare try to con money out of people with a game featuring only four small maps, a bunch of running players and monsters hacking at each other, and not even a skill tree.

However, what made Gu Cheng feel even more confident about this venture was the name *MU Online* itself.

After all, this was a game written into history books.

He also blamed himself for recently being busy with other matters and too lazy to personally hunt for missed opportunities in gaming.

Gu Cheng let out a long sigh. "Are there any domestic competitors stepping in to buy it yet?"

Cherici explained apprehensively, "I don't know yet. Before you personally confirmed it, I didn't dare jump to conclusions or assert whether these people constituted 'corruption and malpractice,' so..."

"Then send people tomorrow to contact them and confirm. As for my sister, you can call her back early tomorrow morning, pass on my judgment, and tell her to handle it strictly by the book. I'll look over the rest of the matters slowly tomorrow; I'm exhausted."

With that, Gu Cheng stood up and prepared to head into the bathroom to take a shower. It was already close to 4:00 AM, and he was reaching his absolute limit.

Only after stepping into the bathroom did he remember that Cherici had nowhere to go. Disregarding the fact that he was stripped down to a single pair of underwear, he poked half his body out of the bathroom door and instructed, "If it's inconvenient for you to find a place, just sleep on the other bed. Asking you to go find a roommate at this hour will probably wake people up."

The standard room Gu Cheng stayed in naturally had two beds.

"Okay, thank you." Cherici's face flushed a deep beet red, and she managed to suppress her emotions with great difficulty.

Right at that moment, a soft sound of a door hinge turning came from behind Gu Cheng, followed by a girl's exclamation of surprise.

"Ah—I'm sorry, I didn't mean to." Jiang Xin's face flushed red. Seeing Gu Cheng's athletic and well-built physique covered in muscles, she hurriedly backed out.

When Gu Cheng and Cherici were discussing business, to avoid suspicion, they hadn't locked the door completely, leaving it slightly ajar.

"What is it?" Gu Cheng asked with an unangered, commanding presence.

"I... I've already notified Director Guan and the others about the adjusted sets, props, and stage crew, and I came back to give you a heads-up. This is Director Guan's temporarily revised shooting schedule..."

As she spoke, Jiang Xin turned her face away, trying her best not to look at Gu Cheng's naked body, and simply handed him an A4 sheet of paper.

"You've worked hard too, get some sleep early." Gu Cheng took the shooting schedule, glanced over it briefly, and tossed it onto the shoe cabinet in the entryway. "By the way, you're sleeping alone too, right?"

"Huh? Oh... yes, yes..." Jiang Xin's brain briefly short-circuited, wondering why Brother Cheng would ask such an embarrassing question.

Gu Cheng was relatively lenient with the crew; certain main cast members were granted the privilege of having a room to themselves. It wasn't to show off, but rather out of fear that some actors might have poor sleeping habits that would disturb their colleagues and lower shooting efficiency.

After all, no one could guarantee that certain actors didn't suffer from snoring or foot odor. With Yang Mi in the cast, Gu Cheng certainly wouldn't dare let her terrorize any other girls.

"That's great, then let Sister Che share your room for the night. It won't disturb anyone else anyway."

"Ah? Oh, okay!" Jiang Xin stood frozen for quite a while before she understood what Gu Cheng meant.

Cherici looked at Jiang Xin with an indescribably mournful gaze.