"Boss! Add two more machines! The line is snaking out the door!"
The arcade owner watched the players waving cash and Dog Tags in the air, feeling both pain and pleasure.
Namco's Ridge Racer had managed to divert some casual players with its fast-paced gameplay, but it still struggled to keep up with the fervent fan economy surrounding this game, which bordered on religious zeal.
As production ramped up, crates emblazoned with "E.F.S.F." (Earth Federation Space Forces) and "ZEON" (Principality of Zeon) logos were shipped continuously to every corner of Japan.
Sega's strategy seemed to be shrewdly balancing the production of Speed & Passion and Gundam Battle Operation, ensuring that arcades received just enough machines to ease the tension of the queues.
This left arcade owners torn between love and loathing.
Inside the President's office at Bandai Headquarters, silence reigned, broken only by the rustle of turning pages.
Makoto Yamashina stared at the thick quarterly financial report in his hands, his brows furrowed into a deep V.
The numbers were stunning—arguably the most impressive in the company's history—all thanks to Gundam Battle Operation.
The unprecedented popularity of Gundam Battle Operation had transformed the dusty GM and Zaku models piled in Bandai's warehouses into hot commodities overnight.
Players, desperate to complete their "squad formations," were buying models by the boxful.
This should have been a moment worthy of champagne celebrations.
But Makoto Yamashina couldn't find it in himself to smile.
"Is this the power of a game that truly lets players 'pilot' a Gundam?" He pointed at a bolded line of data on the report, his voice heavy with frustration.
Standing by the desk, Chuta Mitsui nodded, his expression equally complex. "Yes, President. Sega developed a special feature: players who purchase the corresponding HG Model can unlock exclusive in-game decals by entering a redemption code. In Akihabara, there are even shops where customers buy models solely for the codes, without assembling them."
Makoto Yamashina slammed the report back onto the table, his body slumping heavily against the chair's back.
This is too much.
We're not even competing on the same level.
Not only had Sega created a monstrous game, but they'd also taught Bandai how to sell toys.
The overwhelming sense of being outmatched left this company leader feeling utterly powerless.
He turned his head, his gaze settling on the display case in the corner of the office.
Inside were several new games in development by the Bandai Games Division—nothing but 2D side-scrollers or crude pseudo-3D shooters.
Two years ago, these games might have scraped by in the market.
But after seeing the suffocating cockpit view in Gundam Battle Operation, this pile of games looked like electronic junk from a bygone era.
"Mitsui," Makoto Yamashina suddenly spoke.
"Present."
"Takuya Nakayama's proposal—" Yamashina paused mid-sentence.
The proposal to merge the entire Bandai Games Division into Sega was like a devil's contract, its siren song echoing in his ears.
With a single signature, Sega's coveted technologies, engines, and even their genius Managing Director could all be at Bandai's disposal.
Bandai could focus on what it did best—toys—and simply sit back and count the money.
But the thought was unbearable.
After all, this was Bandai, a company in possession of top-tier IPs like Dragon Ball, Gundam, and Sailor Moon. Were they truly destined to become nothing more than Sega's toy subcontractor?
If Bandai surrendered without a fight, they would likely never again be able to hold their heads high in front of the Nakayama family.
Makoto Yamashina was torn.
More cigarette butts accumulated in the ashtray.
In the end, Yamashina couldn't immediately press the "surrender" button.
Humans are always like this—unwilling to give up until they're forced to, even when the coffin lid is already inches from their nose, clinging to the hope that they can still turn things around.
Besides, Bandai's current financial situation wasn't dire.
So, Makoto Yamashina convened a high-level meeting at Bandai.
The atmosphere at the meeting was tense, despite the financial reports showing the company at its highest profit margins in history.
"Everyone can see this," Yamashina said, his knuckles tapping rhythmically on the table. "Sega's scale is no longer a question of whether we want to compete with them, but whether we're worthy opponents."
No one disagreed.
In this era of Japan's bursting economic bubble, when every company was tightening its belt, Sega was like an insatiable beast, never tiring.
The outsourcing system stretched across the globe, its distribution network as deep and intricate as tree roots. Coupled with groundbreaking products like Virtua Fighter 2, Speed & Passion, and Gundam Battle Operation, Sega was roaring against the wind, even in Japan, where the economy had been in a prolonged downturn for years.
Even in model kits, Bandai's specialty, Sega was teaching them how to leverage cross-promotions and clear inventory.
Meanwhile, while Bandai was raking in profits from selling Gundam models and merchandise, anyone with eyes could see that Sunrise, now under Sega's control, had left Bandai with no leverage.
Although Sunrise, now under Sega's control, was investing even more heavily in production quality than it ever had with Bandai, this wasn't necessarily a bad thing for Bandai. But lack of control remained a persistent thorn.
"I believe everyone has privately considered the merger," Makoto Yamashina stated bluntly. "The question now isn't whether we merge, but how, and whether the chairs beneath your backs will remain steady after."
A director responsible for toy operations removed his glasses and polished them. "President, we're the core of the toy business. Sega covets our production lines and IP management expertise—there's no need to worry about that. Our current weakness... lies in the games division."
All eyes turned to the empty seat—the director of the Game Development Headquarters was out today, overseeing operations elsewhere and hadn't attended the meeting.
"He's just a hopeless case," Chuta Mitsui said bluntly, his words harsh but honest. "He's got the best IP in hand but keeps churning out second-rate games. Sega has even developed a Gundam cockpit simulator, while our guys are still figuring out how to make 2D textures look like 3D."
"So, my proposal is..." Makoto Yamashina paused, then dropped the bombshell that left everyone breathless. "First, we spin off the Games Division as a goodwill gesture, then merge it entirely into Sega."
The room erupted in commotion.
"Just hand it over?" someone hesitated. "Won't that admit Bandai is utterly incompetent in game development? At the negotiating table, Sega will crush us on price, and we won't have a leg to stand on."
"That's precisely the problem." Makoto Yamashina leaned back in his chair, his expression unreadable. "If we hand it over now, we'd be dumping a bunch of useless talent on Sega and letting them turn lead into gold. Even if Sega appreciates the gesture, they'll still drive the price down to rock bottom."
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