Kenzo Tsujimoto sat in the president's office, listening to the commotion in the corridor outside.
It was the sound of people from the sales department running, their leather shoes clattering chaotically against the composite flooring.
"President." The sales manager pushed the door open, clutching a thick stack of fax papers, his breathing somewhat rapid. "The consolidated data from North America is out."
Kenzo Tsujimoto looked up from a pile of project proposals.
"The first batch of 100,000 discs for 'Resident Evil' was distributed to all channels in North America on Tuesday.
"Today is Friday, and the shelves at Best Buy, Walmart, and EB Games are already empty." The sales manager spread the fax papers out on the desk. "At one retail store in Los Angeles, the manager almost got into a fistfight with a distributor's sales representative over the last five discs."
The initial batch of 100,000 units had sold out completely in three days.
Kenzo Tsujimoto picked up the faxes.
They were densely packed with urgent restock orders in English.
The project helmed by the newcomer Shinji Mikami had been quite controversial within the company before its release.
Above it lay a dense stack of urgent restock orders in English.
The project, spearheaded by the newcomer Shinji Mikami, had been controversial within the company before its release.
Fixed camera angles, tank controls, and screens full of gore and rotting flesh.
Capcom's hallmark had always been fighting games like Street Fighter, known for their bright colors and visceral, punchy action.
Suddenly producing such a dark and oppressive "Survival Horror" title made even Kenzo Tsujimoto break into a cold sweat.
But the Western passion for zombie themes exceeded everyone's expectations.
The culture of zombie films, nurtured for decades by Hollywood B-movies, was completely ignited by this game.
That "zombie head turn" not only terrified playtesters but also emptied the wallets of North American gamers.
"How big is the shortfall?" Tsujimoto asked.
"The distributors are conservatively estimating we need another 300,000 copies in the short term. And it has to be fast," the Sales Manager said, wiping sweat from his forehead. "A lot of players are taking gaming magazines into stores to ask for it, and they start cursing in the aisles when they can't find a disc. If the momentum dies now, we'll miss out on this gold rush."
Capcom's own disc pressing plant was already fully booked. Half the production lines were churning out ports of Street Fighter Zero for various platforms, while the other half were racing to finish the last few cartridges for the Super Famicom.
Temporarily reassigning the production lines to press 300,000 discs of Resident Evil would not only disrupt the existing product schedule but also delay delivery until next month.
Temporarily diverting production lines to press 300,000 copies of Resident Evil not only disrupted the original product schedule but also pushed the delivery cycle to next month.
Missing the initial burst of popularity meant real financial losses.
"Have you contacted Sony's DADC factory?" asked Kenzo Tsujimoto.
"I have. Ken Kutaragi replied that PS has several first-party blockbusters shipping soon, and their production lines are running at full capacity. They can't spare the capacity for 300,000 units; they can give us at most 20,000, and we'd have to wait two weeks."
Kenzo Tsujimoto leaned back in his chair, tapping his fingers on the desk.
"What about Sega?" Kenzo Tsujimoto threw out as an option.
The Sales Manager was stunned.
Capcom and Sega were fighting tooth and nail in the arcade market, and they were also competitors in the home console market. Outsourcing to Sega?
"Sega's outsourcing business has been quite open these past few years," Kenzo Tsujimoto explained. "The open production model that Takuya Nakayama implemented doesn't mandate exclusive agreements. As long as you pay enough, they'll take any job."
This was the secret weapon Sega had planted in the next-generation console war.
Ever since the Mega Drive era, this production model had been opened directly to all third-party game developers.
A year ago, leveraging the widespread adoption of the Jupiter console, Sega had established numerous optical disc pressing production lines across the globe. Furthermore, they continued their policy from the Mega Drive era, opening up their manufacturing services to all third parties, and even competitors.
Sega's price list was meticulously detailed.
From master disc burning and manual printing to plastic case injection molding and final shrink-wrapping—the entire supply chain was bundled together.
Most importantly, Sega offered extremely flexible logistics and production solutions.
If you wanted to stock up slowly, you could choose sea freight for a lower price.
If you wanted to capitalize on the hype, you could arrange for expedited production at a factory closest to the sales region, with air freight delivery. As long as you were willing to pay the premium, Sega's factories could show you the pinnacle of industrial efficiency.
This pure commercial manufacturing model dispelled the concerns of many third-party developers.
In business, who would turn their back on production capacity?
"Go talk to Sega," Kenzo Tsujimoto ordered. "I want the fastest rush-order option. 300,000 copies. I want them on the shelves of North American retail stores in the shortest possible time."
Tokyo, Sega Headquarters.
Hisao Oguchi received the call from Capcom.
Oguchi was not surprised by the explosion of Resident Evil in North America.
The Managing Director had already given him a lesson on it, dissecting the game's underlying logic clearly.
Typically, production tasks would only come to him as a briefing or just a number on a statistical table, but this time, Capcom's request was urgent, and they had contacted him directly to request coordination.
"300,000 copies, rush order. Direct supply to North America required," Oguchi noted the requirements in his notebook.
He pulled up the schedule for Sega's global factories.
Sega's factories in Japan were mainly responsible for handling orders in the Asian region.
If these 300,000 copies were pressed in Japan and then air-freighted to the United States, the logistics costs would be exorbitantly high, and it would also delay the process by at least four or five days.
His gaze fell upon the map of North America.
Tijuana, Mexico.
Two years prior, Sega had established a large optical disc manufacturing plant in Tijuana, on the US-Mexico border.
This city sits directly adjacent to San Diego, California.
Thanks to the North American Free Trade Agreement (NAFTA), game discs produced in Tijuana were duty-free.
Even more crucial was the geographical advantage.
Once the discs rolled off the production line in Tijuana, they were loaded onto heavy trucks, passed through the border crossing, and headed north along Interstate 5.
Within a few hours, these fresh discs, still smelling of plastic and ink, could be unloaded directly into distributors' warehouses in Los Angeles and San Francisco.
This was the ultimate logistics solution Sega offered to its third-party manufacturers.
"This order is no problem," Hisao Oguchi said to the Capcom representative on the other end of the line. "We will transfer the order to our Tijuana plant. We can complete the master verification and the first batch of 50,000 discs within 48 hours. By the morning of the third day, the first shipment will have crossed the border into California."
A clear sigh of relief came from the other end of the line.
The price quote was soon faxed to Osaka.
Kenzo Tsujimoto looked at the fax Sega had sent over.
The quote for the expedited order was 15% higher than regular disc pressing.
Compared to the losses caused by being out of stock, this small premium was completely acceptable.
"Sign it and send the payment," Kenzo Tsujimoto said, handing the fax paper to the finance department.
Capcom's crisis was averted.
Over the next two weeks, Resident Evil demonstrated terrifying dominance in the North American market.
The machines at the Tijuana plant roared day and night.
Truck after truck shuttled across the US-Mexico border, delivering crates of discs marked with "BIOHAZARD" into the US retail network.
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