Chapter 36: Purchasing the Legend

According to conventional business strategy, after hearing that WEMADE was caught in a cash flow crisis, Gu Cheng should have waited a while longer before discussing any acquisition. The departure of Cherry, in particular, meant that Legend was left without a product manager, and given more time, Legend's importance in the eyes of WEMADE's leadership would naturally diminish.

But Gu Cheng's time was precious—he didn't have the luxury to wait things out. What worried him even more was Chen Tianqiao, an unpredictable variable. In history, as soon as the bubble burst, it took Chen Tianqiao barely a month to start searching for online games to license. Now that the bubble had burst ahead of schedule, there was every chance Chen could make his move earlier too.

So, a swift and decisive approach was best. The day after Cherry left, Gu Cheng sought out WEMADE.

Five months had passed since Park Youngkwan last hosted him.

Naturally, Gu Cheng didn't tell Park Youngkwan the truth. His story went like this: "Yesterday, Sister Che told me she'd resigned because your company was delaying her project. I'm a sucker for a damsel in distress, so I took her international call from China and rushed over to save the day."

Between the lines, it seemed as if Gu Cheng was flush with cash, not buying the game because he saw potential, but merely because he was bewitched by Cherry's charm and wanted to play the hero.

To make Park Youngkwan believe it, Gu Cheng even put on a lecherous expression when mentioning Cherry's name.

Of course, Park Youngkwan wasn't gullible enough to fully believe this nonsense, but at least it helped lower his expectations.

That was exactly what Gu Cheng wanted.

He wanted the other party to think: Gu Cheng did want to buy a game during the downturn, but it didn't have to be Legend; he would buy whichever was the better deal.

Five months earlier, when WEMADE was flush with cash, they had asked for four hundred million yen plus thirty percent of future net profits, or eight hundred million yen plus ten percent of future net profits. Moreover, they were only selling the Chinese distribution rights, not outright ownership of the game.

Now, things were very different. WEMADE itself was struggling to pay salaries and had to cut projects; a fire sale was inevitable.

Park Youngkwan took the initiative to drop the price to six hundred million yen, and there was no need to discuss profit sharing.

After a bit of haggling, Gu Cheng managed to push the offer down to five hundred and fifty million yen—about 3.5 million yuan.

For Gu Cheng, who now held six million in his hands, this price was quite satisfactory—far better than the offer Chen Tianqiao had received at the same point in history.

But there were still many issues. Historically, Chen Tianqiao got a fully completed game, with multiple future updates and technical support. Now, since Gu Cheng wasn't offering any profit-sharing, the Japanese were planning a one-off deal: no future updates.

That wouldn't do.

Gu Cheng realized that simply buying the distribution rights wasn't enough; he needed to purchase the copyright outright.

Park Youngkwan's response to this demand was, "Buying the copyright outright? That's at least 1.3 billion yen, no less."

That's over eight million yuan.

Gu Cheng couldn't and wouldn't pay that price.

"That's outrageous! The price more than doubles just for the outright copyright?"

Park Youngkwan countered, "Mr. Gu, I hope you understand—buying the copyright means we hand over all the source code and development documents. In the future, we can't use any of Legend's resources for spinoffs or derivative products. You're essentially buying all future adaptation and upgrade rights—how could that not be expensive?"

The two sides bargained fiercely for a long time, and Gu Cheng gradually discerned Park Youngkwan's intentions: Park was reluctant to let go of the hope that if Legend became a huge hit after being sold, WEMADE could still benefit.

As long as WEMADE retained the original copyright, if Gu Cheng made Legend a success, WEMADE could sell merchandise and adaptations, turning a tidy profit.

They figured this option was worth at least several million yuan.

Gu Cheng couldn't persuade them to give up this unrealistic expectation.

After much compromise, Gu Cheng finally proposed a middle ground:

"How about this? I'll pay eight hundred million yen to acquire all rights to the online version of Legend, with your company handing over all source code and development resources. However, your company retains the right to sell physical merchandise in the future.

"Furthermore, after I acquire the full rights to the online version, I will license WEMADE to operate it in Japan and Korea. In other words, if Legend becomes a hit in China, your company can choose to operate it for free in Japan and Korea and ride the wave. How does that sound?"

Park Youngkwan thought it over—Japanese online games tended to succeed in the East Asian cultural sphere; as for selling to the West, he never had high hopes.

With that, there was little difference between "selling only Chinese distribution rights" and "selling the entire copyright, but getting Japan and Korea back as distribution territories."

As for merchandise and adaptation rights... Park couldn't imagine what Legend could be adapted into anyway.

Could a game with no real world-building even be made into a movie—and become a box office hit? At most, maybe some small business with Bandai in Japan, selling "Gundam-style models or figurines" and the like.

As for the final transfer of source code, Park Youngkwan didn't see an issue—he thought keeping the code would only let them make a few more alternative private server versions in the future.

But a reputable company like WEMADE would never run private servers, would they?

So, full transfer of the source code was no big deal.

Park Youngkwan consulted the president and explained his considerations.

The president, short on cash and desperate, quickly agreed: Sell!

The contract was signed that very day.

Gu Cheng spent five million yuan to fully acquire the copyright to the online version of Legend, only returning distribution rights for Japan and Korea to WEMADE.

In a few days, Chinese staff would arrive to oversee the process: all source code would be handed over, and the relevant portions of WEMADE's codebase would be thoroughly wiped, leaving no trace.

...

With the contract signed, it would take a few days to complete the transaction—transferring the code and registering the copyright change.

Gu Cheng left the paperwork to his cousin to handle, as he had a new headache: he didn't have enough money to operate the game.

He hadn't planned to buy the copyright outright, just the distribution rights, thinking three million yuan would be enough. That would have left him with plenty to rent offices back home, host servers, pay for bandwidth, and run some ads...

It would have been tight at first, but at least manageable.

Now, after spending five million on the copyright, Gu Cheng had less than one million yuan in liquid capital left—clearly not enough for server hosting and bandwidth.

That evening, back at the hotel, his cousin brought up the issue.

"Cheng, how are you planning to solve the operating capital problem? Don't let it happen that you get the copyright, but our own cash flow breaks first, before the game's even profitable. And the game is still unfinished—it'll need at least another month or two of development, and you'll have to hire programmers to patch things up."

Gu Cheng considered and reassured her, "We'll finance it. The bubble may have burst and venture capital may be out of reach, but at least we have collateral. We can probably get a few million from the bank."

This approach wasn't unusual.

Historically, after Chen Tianqiao bought the Legend copyright, he was broke too.

He pulled off a classic leveraged play: with the license in hand, he mortgaged it for a million or two, bought servers and bandwidth, got the game running, then mortgaged the company's offices and servers to the bank for another couple million for advertising and cash flow...

In the end, relying on a sky-high debt ratio, Chen Tianqiao fought his way through.

Gu Cheng admitted he wasn't as skillful with capital as Chen Tianqiao, but getting a few million in bank loans against collateral was probably doable.

Pan Jieying, after listening to his analysis, could only sigh, "That's about all we can do. But in the future, try to be more cautious in business, don't always push yourself to the edge before finding a way out, all right?"

"I know, I don't want it to be like this either," Gu Cheng comforted her, then suddenly remembered something. "Oh, right! Remember what Grandma said about the family heirlooms left in Kaesong? I already asked Quan-ge to look into it for me. Maybe I should check in again these days. If we can get them out and they're really valuable, maybe it could help tide us over."

Pan Jieying's eyes lit up, and she teased, "You didn't tell me—it's been over two months, hasn't it? You kept it from me, even after asking someone to handle it."

...

After talking it out, the siblings stopped worrying.

Gu Cheng, having spent the whole day negotiating, was hungry and ready to go eat.

But just as they were about to leave, his phone rang.

It was Quan Shunyu's number.

"Could it be news that my deal is done? The grapevine works fast. Or maybe it's about Kaesong?"

Gu Cheng's first thought was that Park Youngkwan had called Quan Shunyu to get the inside scoop. His second thought was a bit of excitement, hoping it was the latter.

Pan Jieying, unaware of any of this, urged him, "What are you waiting for? Answer it!"

Gu Cheng reflexively pressed the answer button. "Quan-ge?"

"It's me." A gentle female voice came through the phone.

Before Gu Cheng could react, Pan Jieying, eavesdropping beside him, immediately pricked up her ears.

It was Quan Baoya!

Tsk, her phone had been confiscated by the company, and she was sneaking calls to Cheng from her brother's phone. Clearly, these two had quite a close friendship...

So Pan Jieying imagined.

"Xiaoya, what's up?"

"I heard from my brother that you came to my concert the other night?"

"Mm."

"Why didn't you get in touch?"

"I heard your phone was confiscated by the company, so I didn't want to trouble you."

Gu Cheng's explanation was reasonable. Quan Baoya was silent for a few seconds, without any coquettishness.

"At least you have a conscience. Let's meet tonight—something happened at the company, and it's about you. Let's go to that Andong chicken place we went to last time."

"My cousin's with me—can she come too?"

"Why not? We're good friends now. Or do you think there's something shady about our relationship?"

"See you soon, then."