The agreement between Aiwa and Nintendo was before the launch of Aiwa’s learning machine, Aiwa will not let Nintendo use its distribution channels in China.
China had allowed the importation of video game console. Nintendo wants to enter the China market earlier than Sega to prevent the latter from controlling the Chinese market. As such, Nintendo helped Aiwa to manufacture a batch of learning machines first. As for the game cartridges, China’s factories will be producing for them. The games were mainly games that involve idioms, words, languages, etc.
At the end of May, Aiwa Learning Machine was launched in China. Feng Yu had set the retail price at 3,288 RMB per unit, and the wholesale price at 3,000 RMB per unit. The cost price per unit was only about 1,500 RMB. This was still the cost of having Nintendo manufacturing for him, and it includes the importation taxes and transportation cost. If it were manufactured by China’s factories, the cost would be lowered to about 1,000 RMB.
Nintendo had also introduced a few models of game consoles for different consumer segments. The prices range from 1,000 to 3,000 RMB. Nintendo wishes to occupy China’s market with these products. Sega also introduces a few different models to counter Nintendo.
Both Nintendo and Sega think little of Aiwa’s Learning Machine and The Little Tyrant. They felt that their consoles were cheaper, had better quality games and more beautiful. Their consoles would take over China’s video game industry in no time. This would be just like when they penetrate the US and European market.
Nintendo was still doing well as they had cooperated with Aiwa and had access to their distribution channels. Those distributors were willing to try to sell their products. They want to know if Nintendo consoles and games could let them make any profits. But as they were only treating this as a trial, they did not order too many goods from Nintendo. On the other hand, Sega was not doing well. No retailers wanted to bring in their products. It was because no one in China had heard of this brand and it was still pricey. Everyone felt that this product would not sell in China!
When Sega’s person in charge of the Chinese market heard these reasons, he almost cried. Sega was also one of the top Video game consoles, but in China, Sega was only considered the second rated product. What’s wrong with our brand? Our products were popular in western countries!
But soon, Nintendo and Sega realized that China was full of cheap game consoles. They bought some of these consoles back and found out that these consoles were using their patented technologies. Even the exterior designs were imitating them. These companies had not paid them for using their patents!
These companies were illegally using their technologies!
Nintendo and Sega start to complain to the Chinese Government. They wanted the Government to stop these companies from selling those consoles, and at the same time compensate them for their losses. However, the Chinese Government sided with their own people. What patents are you talking about? Did you apply for the licenses in China? Did you apply for the patents in Asia? We are not aware of these in China.
Asia was very different from Western countries. In the West, there were treaties and all those countries abided by the agreements. This includes the patent protection. This was the reason why patents were more protected there, compared to Asia. This was mainly so for South East Asia. The patent needs to be applied in different countries. For instance, Japan’s patents were not recognized in China.
When Nintendo and Sega were negotiating with the Chinese Government, Aiwa Learning Machine’s advertisements started to air on CCTV.
The star of this commercial was still Jin Ming, China’s most famous child actress. No one was more popular than her. Her endorsement fees were also not high.
Feng Yu was also the one who thought of the idea for the commercial. Jin Ming was at home. On her table was Aiwa Learning Machine connected to a TV.
On the TV screen, there were a few birds with English words on them flying about. Jin Ming was typing on the keyboard, and those little birds start dropping like they were shot.
A middle-aged woman walked in and passed an apple to Jin Ming: “Dear, how do you call this apple in English?”
“A-P-P-L-E, apple! So easy!” As Jin ming was spelling the word out, she also made an “OK” sign.
The woman hugged Jin Ming with one hand and pointed the Aiwa Learning Machine with the other: “Since I had bought Aiwa Learning Machine for my child, I do not have to worry about her studies.”
The camera panned and zoom in to Aiwa Learning Machine on the table, and Jin Ming’s voice could be heard in the background: “Aiwa learning the machine, learn at your own pace!”
The screen changed to a picture of Aiwa Learning Machine with Aiwa’s slogan: “Aiwa Electronics, I love China!”
……
“Dear, shall we buy this Aiwa Learning Machine for our child? Our child had scored lower than next door Old Zhang’s child for his English!”
“Fine. Tomorrow you go to the mall and check it out. We really supervise our child’s studies. His teacher had reprimanded me whenever I see her!”
……
“Mum, I want that Aiwa Learning Machine.”
“What do you want that for? You are also not learning English.”
“There is an idiom game in it too. I want to learn idioms. Furthermore, this can also be used to learn to type. Our teacher had told us that in the future, everyone will be using computers for typing.”
“Then you go and ask your father. If he agrees, I will buy one for you.”
……
“Dad, I am going to Xiao Ming house. His father had bought Aiwa Learning Machine. I am going to study with him.”
“Will your grades improve when you use that thing?”
“It is better than nothing.”
“Go ahead. We will also buy one this weekend at the mall. In the future, you can stay at home and study.”
……
“Eh, your father had bought Aiwa Learning Machine for you? Are you staying at home on weekends studying?”
“Shhhh…… Video game cartridges are also compatible with this Learning Machine. I have been playing Contra!”
“Huh? This Learning Machine can also be used as a video game console?”
“That’s right. My father did not want to buy video games for me. But this time, he had bought this Learning Machine for me. My father is outstation, and my mother is working night shift tonight. You want to come over to my house to play the game?”
“Ok. I will tell my mum that I am going over to your place to study!”
……
The advertisements at CCTV were very effective. The VCD player was not launched yet, and the advertising slots Feng Yu bought were all airing Aiwa Learning Machine. Within 3 days, the distributors were calling Tai Hua Trading to order more goods.
There were only 10,000 units of Aiwa Learning Machine for the first batch, and each distributor got only 300 to 500 units. From the current situation, their stock would be sold out within a week!
Wu Zhigang immediately contacted Fu Guangzheng. Aiwa Learning Machine was also imported into China through Hong Kong as the taxes were lower. Hong Kong Aiwa Co. had also exported this product to Taiwan and Malaysia.
Luckily Aiwa had been expanding their factories. When Feng Yu said that he wants to launch the Learning Machine, they bought two more production lines. These were all in Japan and had started manufacturing the Learning Machine. Nintendo was manufacturing for Aiwa as a contractor.
When the second batch of 20,000 units was delivered to China, the Learning Machine had also gained popularity in other South East Asia markets.
This Learning Machine was using 486 processors. It has some functions similar to a computer, and it was only selling for 600 USD! Aiwa’s technologies were outstanding. No wonder Aiwa Walkman was better than Sony. This was the power of technology!
At first, Heitaro Nakajima does not think well of this Learning Machine. But Feng Yu was insistent and had even asked him to pay Nintendo to manufacture for them. Now, from the sales figures, Feng Yu was right. If this Learning Machine were produced by others, they would have missed out all these profits.
Moreover, Heitaro Nakajima had wanted to enter the computer market. This Learning Machine was a test of his technicians’ abilities!
Along with the growing popularity of the Learning Machine, Aiwa Walkman sales in South East Asia had increased further. This was the benefit of branding! As long as a brand have a successful product, the consumers will also take notice of the other products!
Aiwa Learning Machine was a success!
Translator’s notes: Jin Ming, born in Beijing, is probably the most famous Chinese child star of the past two decades. Dubbed “China’s Shirley Temple,” Jin, with her sweet and cute looks, was favored by millions of Chinese in the 1990s when she shot a series of TV hits adapted from the novels written by well-known Chinese romance author Chiung Yao, including “Wanjun” (1990), “Longing for Husband to Return” (1990), “Grass by Riverside” (1992) and “Plum Blossom” (1993).
Jin’s1989 portrayal of the wholesome girl Wanjun when she was only nine years old, made a long-lasting impression on her fans, pushing her into the box of “China’s child star forever.” Yet, Jin gradually lost her fame as she grew up. She has become a rather unknown or vague figure in the showbiz world since the age of 18. Jin began to work at the Chinese Coal Mine Art Troupe after graduating from the School of International Studies, Peking University, in 2003. It’s reported that she tied the knot with Chinese film promoter An Yugang in September 2012.
