Becoming Rich with Daily Scavenging APP-Chapter 414: SNK Corporation

Sometimes, reality is often more ridiculous than fiction.

When Chen Yiyang first heard Wen Liangfeng’s answer, his initial reaction was that it was nonsense.

A tech company invested by Microsoft should have some solid strengths, right?

It can’t be that the person responsible for Microsoft’s investments doesn’t look at the company’s technology and only listens to how the company boss boasts, right?

However, looking at the current trend of American tech giants preferring Indian CEOs, it’s not impossible.

"At first glance, this conclusion seems absurd, but upon further thinking, there is a possibility for realization."

After calming down, Chen Yiyang thought it over and then said, "India is a major hub for software development. Due to their long-term business in outsourcing software development services for large corporations, they have cultivated a massive pool of software engineering talent domestically."

"Moreover, there’s a time difference between Europe and America and India, which means many software engineers working for other outsourcing companies have time to do some freelance work after office hours." Wen Liangfeng pointed out the key factor.

"The reason many large institutions choose to invest in build.ai is because its software indeed has a large base of users willing to pay.

During the daytime in Europe and America, it’s nighttime in India. After clients from Europe and America put forward their needs, the freelance software engineers in India have ample time to finish the program and deliver it to the clients."

"This model actually sounds pretty good."

Chen Yiyang contemplated that if this were true, although this company wouldn’t qualify as an AI tech company, it could completely serve as an intermediary platform.

It could fully leverage the advantage of low labor prices in India to allow a large pool of Indian software engineers to customize software and programs for users in Europe and America.

Yet this company ends up in a situation where artificial intelligence results in actual people doing the work, which is indeed quite difficult to hold back.

"It sounds good, but there are actually two major problems."

Having listened to Chen Yiyang’s thoughts, Wen Liangfeng said,

"The first big problem is that the reason the company has been able to secure this much investment is entirely based on the storytelling of AI programming, which seems to have a promising future.

If it were just a simple platform serving as an intermediary between software engineers and clients, it could never secure over 200 million US Dollars in investment.

The second issue is the company’s claim of having annual revenue of 150 million dollars."

This revenue was believed to be real because it was claimed that AI programming significantly reduced costs.

If manual labor were used, even if Indian engineers had cheap quotes, the costs wouldn’t compare to those of AI. The company’s revenue must be fabricated."

"Furthermore, the company currently claims it uses AI, so clients tolerate their programs, believing as technology develops, the company’s AI programming capabilities will improve.

But if real humans are used, those clients might not be as understanding."

Chen Yiyang and Wen Liangfeng, each spoke back and forth, quickly guessed the general situation of the company named build.ai.

In a nutshell, once the truth is revealed, this company will be worthless.

"Sigh." Chen Yiyang then sighed and said, "It’s really not easy to find a high-tech company to invest in nowadays."

When Chen Yiyang woke up the next morning, he glanced at his phone.

It just so happened that today’s leaked intelligence was about an investment opportunity.

Today’s intel: The glory of past fighters: Japanese game developer SNK is seeking sale, now buying the company is a real catch.

The contact details have been attached on the second page.

SNK?

Chen Yiyang was momentarily dazed upon seeing this name in the leaked intel.

The reason was simple - the impression of this name runs too deep in one’s memories.

Who hasn’t played "The King of Fighters" or "Metal Slug" as a kid?

These two games were among the first games encountered on arcade machines, computers, and gaming consoles by everyone.

And the developer of these games is SNK mentioned in the leaked intel.

Of course, the glory of the old era can’t be continued into the new era.

After failing to break into the console and handheld markets, SNK has been mired in debt, unable to create new IPs, and even once fell into gambling company.

Buying a company like this wouldn’t cost much, Chen Yiyang felt.

Approximately between 100 million to 200 million US Dollars should be enough.

However, Chen Yiyang was curious why the leaked intel suddenly suggested buying this company.

Could it be SNK is working on a game that will become hugely popular in the future?

But regardless, for a deal of this scale, Chen Yiyang was not keen to go to Japan himself; he would simply send a subordinate for the acquisition.

Fortunately, he had quite a few friends in Japan, making networking easier.

So, Chen Yiyang called Toyota Osamu, his influential friend in Japan, asking for help in getting introduced to people from SNK.

"Why did you suddenly think of acquiring SNK?" Toyota Osamu was quite surprised when he received Chen Yiyang’s call.

Chen Yiyang certainly had to provide a reasonable explanation.

If business in the market causes suspicion, even if the deal goes through eventually, it would require a higher price than usual.

Fortunately, Chen Yiyang conveniently had his own gaming company.

"You know, I own several gaming companies. I’m planning to create a fighting game, and SNK’s fighting IPs are pretty good. Rather than negotiating for licensing fees, it’s simpler to buy the company. The company isn’t worth much now, right?"

"That’s true." Chen Yiyang’s reasoning convinced Toyota Osamu. "I heard that mobile games in your country are quite profitable now. If you only negotiate for licensing, should the game become popular, you’d have to pay much more during license renewal."

"Exactly." Chen Yiyang agreed, "So why not just buy the company directly?"

The reason Chen Yiyang provided was entirely rational.

Quite a few domestic mobile game companies have suffered losses in this area.

For example, Meihe, when it produced the Harry Potter mobile game, failed to notice this situation. As a result, when the game became popular, renewing the license became extremely difficult.

Meihe simply cashed in and ultimately did not renew the license, opting to shut down the game.

At present, SNK is valued at around 100 million dollars.

While a domestic mobile game, if it becomes popular, could generate tens of billions in revenue annually.

In this comparison, spending 100 million dollars to directly buy the company and calculate it into the game development cost is indeed quite a lucrative deal.

Toyota Osamu quickly arranged connections and helped Chen Yiyang’s company get in touch with SNK.