Becoming Rich with Daily Scavenging APP-Chapter 424: The Imminent Expiration of Licensing Rights
"Hello, Mr. Li." Chen Yiyang met with Li Qibing, the president of Card Draw Games, in his office.
Chen Yiyang was very courteous to Li Qibing.
Generally, when investors meet with entrepreneurs, they tend to be a bit cold to apply psychological pressure on the entrepreneurs to secure better investment terms.
But Chen Yiyang didn’t have that attitude toward Li Qibing.
Because he couldn’t understand why Li Qibing was seeking external investment.
After inviting Li Qibing to sit down, Chen Yiyang straightforwardly asked.
"Previously, my assistant sent me your company’s information. From the publicly available information, it seems that Card Draw Games is currently operating well and is in a profitable state.
Moreover, there’s no company in the domestic market that occupies the same niche creating competitive pressure on you, so why are you suddenly seeking external investment?"
"There are many reasons." Li Qibing candidly shared the situation of his company with Chen Yiyang.
"Currently, the cards produced by Card Draw Games mostly rely on various classic IPs like Ultraman and My Little Pony, which are beloved classic images among children.
Card Draw Games is currently collaborating with seventy IPs, but the best-selling are still just a few leading classic IPs.
The authorization for these IPs was negotiated quite early on and, at that time, we agreed on authorization for two to three years at a time, and these authorizations are about to expire.
When we negotiated, the authorization for a top-tier IP was approximately two to three hundred million. Back then, we hadn’t grown large, and it was unclear to outsiders if we could be profitable, and we ourselves weren’t very sure either, so the prices were relatively low."
"Have you developed any original IPs?" Chen Yiyang inquired.
Chen Yiyang could understand what Li Qibing had just said.
Because when I initially invested in Marte Bubble, it also had to painfully transition to producing original IP dolls due to the increasing demands of the IP licensors.
And when facing the IP copyright holders, Card Draw Games is likely at an even lower position than Marte Bubble was back then.
After all, Marte Bubble’s dolls had at least a bit of their own technology.
If the IP licensors lost Marte Bubble’s production capabilities, and they themselves had to find a factory to produce the dolls, fans might not be satisfied.
This was evident when Marte Bubble transitioned to making original IP dolls and the licensors who demanded high authorization fees from Marte Bubble back then couldn’t find a doll factory as capable as Marte Bubble.
Now, those IP licensors probably regret pricing Marte Bubble out of the market since their IPs can’t fetch a good price anymore.
But when it comes to Card Draw Games, those IP licensors aren’t worried at all.
Because Card Draw Games’ products are just cards.
No matter what flash or laser effects are added, they are essentially cards, and any standard printing house can replicate the technology for cards.
And now these IP licensors are aware of Card Draw Games’ profitability.
Once the current IP authorizations expire, there’s no way these licensors won’t exploit Card Draw Games.
It’s even possible that Card Draw Games might end up working directly for the IP licensors.
Because IP is unique.
For instance, if Ultraman’s IP licensors don’t authorize Card Draw Games, they have no similar IP to replace it.
And Ultraman’s licensors can even find a printing company themselves to release their card packs.
So the negotiation positions of both parties are very unequal.
"We’re currently developing an original Three Kingdoms IP, but so far, the results haven’t been great." Li Qibing answered Chen Yiyang’s question.
"That’s normal." Chen Yiyang nodded.
Marte Bubble’s original IP dolls will sell as long as they’re designed to be cute.
But if Card Draw Games prints their own original characters on a 1.7-yuan card, even elementary school students would think you’re just trying to make money off of them.
"Actually, Card Draw Games still has a way out."
Chen Yiyang thought and said, "Card Draw Games needs to hold some valuable IPs themselves.
In case negotiations with those top-tier IPs break down, they can temporarily use other IPs to fill the gap.
The top-tier IPs themselves need time and energy to make cards. Typically, IP licensors are reluctant to get their hands dirty with the hard work themselves."
"That’s why I approached your company hoping to obtain the authorization for Nezha’s IP, isn’t it?"
Li Qibing stated his reason for previously seeking Nezha IP authorization from Chen Yiyang.
Currently, for Card Draw Games, Ultraman and My Little Pony are indispensable top-tier IP authorizations.
Most customers also come to buy the cards for these two IPs.
But if they could obtain the Nezha IP authorization, Card Draw Games would at least have some leverage in negotiations with these two licensors, avoiding being completely exploited.
Chen Yiyang, after listening to Li Qibing, realized that Card Draw Games’ current profitability was actually based on securing many classic IPs at low prices in the early stage.
If there were renewal issues with these IPs, the company’s profitability would significantly decline.
However, on the other hand.
Whether investing in a company will be profitable isn’t solely dependent on the company’s profitability.
If the company can go public, the money made from stock could match the hard-earned profit the company might make over a decade or more.
"Does the company have plans to go public?" Chen Yiyang asked.
"Yes." Li Qibing said, "Before meeting Mr. Chen, I also met with people from Red Mountain Capital.
Their condition for investment is that Card Draw Games must go public within a specified timeframe."
After chatting with Li Qibing, Chen Yiyang first let Li Qibing return to the hotel.
He then called Wu Changxun.
"Is Yiyang Automobile’s first model about to launch? What made you think of calling me?" Wu Changxun asked curiously.
"No, I recently spotted a company with good potential and was wondering if Tengxu is interested in investing."
"Any company that catches your eye must have infinite potential."
When it comes to this, Wu Changxun quite trusted Chen Yiyang’s judgment.
This guy went from finding investment gems to becoming a billionaire purely through investing.
Such achievements mean the capital market can fully count on his judgment.
Wu Changxun even thinks if Chen Yiyang joined Tengxu as head of investments, Tengxu’s top management might even tolerate Chen Yiyang losing more than one trillion.
Don’t be misled by how big this number is.
But, for someone with precise vision, if they can invest in a company like Alibaba, then even if all other investments fail, it’s acceptable.
Of course, it doesn’t include people like those back then who invested in Tengxu, but before Tengxu’s rise, transferred and sold their shares cheaply—like foolish sons of landlords.
