The CEO Asks Part 2

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Hello everyone. My name is Ohwada and I am currently heading Bazaar as its CEO. As the continuation of the first part, I would like to try interview myself.

I started learning Mandarin since high school, worked vigorously towards game making at college, continued to do so at both graduate school and Sony, and just as I was about to be fired, I skipped work and wandered around China, and what awaited me after that was…


[Picking up from where we left off, you wrote a report about the full details of your wandering around China.]


Ohwada「As someone who at the time had never written a single business plan, I only made a list of the challenges and the solutions to the situation at the time, and looking back now the content was somehow embarrassing, but I did made a number of proposals in the report, in which I said that to be able to enter the Chinese market you need to do this and that. It took 10 years to carry them out, but there were some proposals that had huge impact on the market expansion that came later on.」


「How did they make huge impact?」


Ohwada「Probably because it had lots of pictures, I’m not really sure, but everyone wanted to read the report. The next thing you know, the vice president (former Sony Computer Entertainment President) Akira Sato read it and wanted to hear more from me. There were a lot of people making games at Sony, but practically there was nobody who could speak Mandarin. This is not the time to be making games, so I was told, and then I was moved from game development division to the main company’s management planning division’s China team.」


「From a game development division, all of a sudden to management planning team in China, what sort job did you do there?」


Ohwada「I had thought of making games in China. I mean, even in the proposal I wrote I talked about making games. But, when I was transferred to China branch I was told to do marketing instead. The me that used to make games is now told to do marketing? I didn’t even know a single thing about marketing.」


「That seems tough. It might have been easier if you had find another job instead.」


Ohwada「At that point I was already someone who had been told to quit as a game creator, so I had nothing to lose. I would try everything and then afterward make my decision.」


「So about marketing, in particular what did you do?」


Ohwada「When I thought about the thing only I could do, I came to realize that it’s speaking and listening to people in Chinese Mandarin. So I set myself a goal, which was to go to 100 cities and visit 1000 game stores in China and listen to their stories. If I keep pushing forward by doing that, at some point I should be able to understand more about the thing only I can do, was the mindset I had.」


「That was really reckless of you. So how much did you manage to accomplish?


Ohwada「Visiting 1000 game stores took me about two years I guess, and going to 100 cities took me around 3 years. The moment I had begun going around stores in high spirit, I found out that all game stores only had pirated game software. But it was because at the time the Chinese government didn’t allow for the sales of game consoles for home use. I thought to myself that it couldn’t be helped, so I went over to the game stores and asked them a couple of things, like why they sold pirated software, and why they remodeled game consoles to be sold within the country.」


「Weren’t those questions a taboo for them?」


Ohwada「They were *laughed*, but you know I was one step away from being fired, so I had nothing to lose. I got a bucket of water splashed at me, got chased around by scary men etc. But as I talked with them, they slowly began to open up and tell me about various things, and at one point even asked me to watch the store for them. My boss would have been angry if I had told them though.」


「So it was then you began to understand their issues.」


Ohwada「Yes. If it’s only about business, there should have been other good business opportunities available to them. But they loved games, that’s why they wanted to get involved in it. But then again, business was also important. So in the end, inside the very limited choices they had, their way to be able to tie those two things together was to sell pirated game software. So when I offered them the business model that could solve their issues, interestingly the stores that were selling pirated game software became willing to switch over to sell original game software instead. Like that I had found important channels through marketing that could serve as cornerstones to expand our market. But just when we finished the preparations needed to genuinely start sales in China, a notice from the Chinese government came.」


「That it was okay to sell the games?」


Ohwada「It was the other way around, deep inside at the center of the government there were people opposing sales of games in China. We absolutely won’t let you sell them here, was their stance. At that time Sony was holding negotiation with the Chinese government, but apparently it was decided that the negotiation was meaningless and that we should give up and retreat from China. Although I was still in my twenties back then, I was given a team and subordinates in Beijing, Shanghai and Guangzhou, but at the end everyone got reshuffled. I carried out the withdrawal plan from China with my superior who came along to the country together back then.」


「What did you do after withdrawing from China then?


Ohwada「The option back then for me was to either transfer to either Hong Kong that was located in the special administrative region of China, or Taiwan that was at odds with the Chinese government. In the end because I can speak Mandarin Chinese I decided to transfer to Taiwan, but that turned out to be a big mistake. Sony Computer Entertainment Taiwan had been around for a bit less than 10 years, and their marketing team was working perfectly well. On the other hand, over there people didn’t like my mainland China’s Mandarin, that’s why I couldn’t make friends and wasn’t able to get along with dealers.」


「So what did you do in Taiwan?」


Ohwada「This was also a coincidence, at the time Taiwanese government wanted to develop their own content industry, and therefore they would like to talk to people who understood game development in Sony, which held top spot for share of game consoles for home use. That’s how they asked me who had experience in making games in Japan. I was very happy they relied on me, so without much thinking I accepted the request. As a joint project with the Taiwanese government, we held classes for game development for Playstation 3 games, and established a program through which we would invest in Taiwan companies. However, I thought of not only carrying out the program in Taiwan, but also in China, as a follow up effort to try to advance into the Chinese market again.


「Why did you think that way?」


Ohwada「I looked at the way the main company conducted its business, and I thought if I did the job they way they asked me to, we wouldn’t get anywhere. Then I came to a conclusion that we wouldn’t be able to conduct an advantageous negotiation if the other party didn’t initiate contact and make request to us first. So unrelated to the project with the Taiwanese, we carried out PR activities in the mainland China and tried to make a suitable environment which would attract the government to come to us and make the request.」


「You wanted to make them say “please let us sell these” instead of “sure it’s okay to sell those”.」


Ohwada「Afterwards, there were a lot of requests from regional governments to conduct the same program at universities in their cities. When I was going around cities I got to talk with local government officials, and they gave me a green light to carry out with local creators training project. But I asked them: “if those people can’t buy the games they made themselves in their own country, they will be sad. So what do you plan to do with that problem? Then some local officials came out and answered, “we would somehow make sure those games are sold within the country, so let’s do it together.” Then I said let’s do this. Things progressed to the point of coming up with joint negotiation scheme with the local partners in order to conduct negotiation with the central government, and finally the result was that we managed to get them to grant us permission to sell games. 10 grueling years of misery, that’s long.」


「And then, you finally went deeper into the China path?」


Ohwada「No, again I know it’s a bad habit of mine, but I had become fed up with China at that point. This comes from someone who had opened and cultivated the market in the country, but I thought that there wasn’t that much possibility in Chinese market. If you take a look at Chinese population’s dynamics in the next 10 years, it will become clear that the population of young people aged 15-24 years who love games will decrease by around 20 percent. So now you’re left with two options, either to adjust to the situation and create contents aimed at increasingly older generation like in Japan, or engage in harsh competition to win the slice of pie that’s becoming 20 percent smaller. Both options didn’t seem appealing to me, so I decided to withdraw from business in China.」


「Then afterwards you started your own business by creating Bazaar. Please leave the part for the next chapter.」

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