The first loss after Ichitaro Office 8, the job cuts and Sony’s investment (1998)

A repayment plan entrusted to 1.8 million copies

What was put in question in 1998 was not how to rebuild a product but how to decide the size of a company. The new head office completed in June 1997 cost ¥10.5bn, bank borrowings rose in one year from ¥3.1bn to ¥11.1bn, and their repayment had been entrusted to the over-the-counter listing that October and to the sales of Ichitaro Office 8, launched in September. The listing brought in ¥7.5bn; Office 8, against a target raised in November to 1.8 million copies, reached 770,000. When two premises failed at the same time, what collapsed was not the product’s economics but the path of repayment.

That said, placing Microsoft at the centre of its reckoning was also what gave the company the strength to field a full line. It could enter the office-suite market as the last arrival only because it had built everything itself down to the Sanshiro spreadsheet, and that line-up had been added to for the reason that the opponent had one. What president Ukigawa Kazunori regretted about the intensity of his rivalry concerned the products — but the same rivalry had also set the size of the company at 1,700 people including contractors. What remained after the cut to a little over 1,000 and ¥7.5bn of cost reduction was a yardstick the company had not previously possessed: measuring its own scale by the number of copies it could sell, rather than by another company’s catalogue.