The next day, Lin Baicheng accompanied Chen Gao to visit the three arcade assembly factories.
Since all three had only been in the industry a few years, the facilities and equipment were fairly new. The main differences lay in their scale and workforce.
Lin chatted with each of the owners and learned that while arcade assembly wasn't unprofitable, the real profits went to the foreign game companies that granted licenses. Their factories were operating in the black; they weren't selling out of failure.
This puzzled Lin, so he asked outright why they wanted to sell.
The answer was the same across the board: arcade assembly earned "hard money" but not "big money." A few years earlier, just after the economic crisis, it had been a safe and steady business when other ventures were risky. That's why they had gone into it then.
Now, however, the Hong Kong economy was booming and other industries were far more lucrative. Compared to textiles, trading, or finance, assembling arcade machines no longer looked attractive.
All three owners wanted to switch industries but couldn't sell their factories at the high prices they hoped for—everyone knew arcade assembly wasn't as profitable anymore. Lin wanted to buy, they wanted to sell; the sticking point was the price.
Still, since the factories remained profitable, the owners weren't desperate. They all demanded a premium. Lin didn't reject this out of hand; his concern was which factory to acquire.
The two smaller plants were much the same. He had enough cash to buy either and still fund development of his own game afterward.
The large factory, though, was different. Its asking price was HK$3 million, more than Lin's available cash. Ordinarily he wouldn't consider it. But he did.
Why? Because it was the largest operation, with the most experienced workers, and—crucially—the factory building and land were owned outright. That meant expansion would be easy. Plenty of open space surrounded the property; with enough money he could extend it further.
Even more impressive, the owner had foresight: he'd hired two scouts abroad, one in Los Angeles and one in Tokyo. Neither was highly educated, but both were seasoned gamers who haunted arcades. Whenever a hot new game appeared, they could report back immediately, allowing the factory to seek licenses and start assembling units for Hong Kong.
For Lin, these foreign employees were valuable assets. Once he produced his own games, they could help him sell not only in Hong Kong but also break into overseas markets quickly.
After much thought, Lin decided: he would buy the large Kwun Tong factory.
His liquid cash was about HK$1.1 million. The novel rights had brought in HK$1.5 million, but taxes had cut into that, and he'd already spent HK$200,000 on another major purchase.
Short on cash, he turned to his 25% stake in Star Daily. Rather than selling, he used the shares as collateral to secure a HK$2.5 million bank loan. The shares were worth more, but banks only lent about 70–80% of value.
Lin chose not to sell because he planned to continue Wind and Cloud: Conquering the World with a sequel serialized in Star Daily, sustaining and even growing the newspaper's readership and share price. Besides, the loan amount was enough for now.
Five days later the bank released the funds. Lin, accompanied by Chen Gao, signed the acquisition deal: HK$2.85 million for the Kwun Tong factory and its 2,000-square-meter property.
Even if his arcade venture failed, the land itself would rise in value—making this a near risk-free investment in the long term.
"Mr. Lin, congratulations!"
"And I must thank you, Mr. Qin, for transferring the factory to me," Lin replied.
Both men shook hands, equally pleased. Lin had secured his foothold in the arcade industry; Qin Xiangyang could now take his money and pursue the textile industry, which he saw as more promising.
Qin said, "Mr. Lin, I'll walk you through the handover. I'll be taking a few relatives with me, but the rest of the workers—it's your call whether to keep them or let them go."
"They're skilled workers," Lin answered with a smile. "As long as they have no issues, I'll keep them on."
That pleased Qin. "Good. It would weigh on me if they lost their jobs right after the sale—they've been with me two or three years." He had no plans to take them along, since textiles required different expertise.
Together, the two men went to the workshop floor and gathered all the employees.
The workers already knew the factory had been sold and were nervous. A new boss often meant layoffs, and for ordinary people with little education, stable jobs were hard to find in crowded Hong Kong—even in a recovering economy.
Their faces showed unease. They worried about their livelihoods, and the families depending on them.