NGF history and snk buyout details

[Dion]

Since we're all but sold out of all the neogeo stock, and we are no longer involved in wholesale and the retail sales of the neogeo, I thought I would shed some light on our history and even give some details on our famous buyout we did when we cleared snk of their entire neogeo aes/cd inventory.

I started buying/selling aes cartridges from snk back around 1994. It was nothing more than buying extra quantities as to offset the costs for my own personal collection. (started buying 6 of every title, then 12, etc...). Other people started this way too (javier from Visual Rush is one example)(shawn from neo-geo.com also did this after playmore took over)

So after many years of doing business with snk, we developed a good business relationship together. I would frequently see snk-japan and snk-america employees at the various trade shows, plus I would visit the offices in california from time to time.

Around that time, Chris and myself were taking things to a higher level, buying more and more quantities. From then on, we made agreements that we would be an authorized distributor for the aes consumer market. This led to the development of NeoGeoFreak/NGF-USA as a name, and later a brand, circa late 1996/97. These deals would eventually lead to NeoGeoFreak/NGF-USA becoming the exclusive and only consumer aes distributor for the entire US market (snk had agreements with another distributors for europe, south america, africa, etc...)

To elaborate, it meant that for every title snk would release for the neogeo aes, NeoGeoFreak would be the exclusive and only ones selling it (we would buy the inventory and then sell to other retailers nationwide/north america). SNK did this with their mvs division as well, but we were not involved in arcade sales.

Meaning, SNK could/would only sell directly from their own web sites to consumers at full retail, but they would not sell mass quantities to other retailers. NeoGeoFreak/NGF-USA was the middle man for wholesale aes sales. We were both a wholesaler and also a retailer. We sold wholesale quantities to retailers and various online sites, and we also sold one off orders to consumers.

(more to details to come later, but feel free to ask any questions)

[ASSEMbler]

Do you know what kind of royalties they were getting per unit?

[Dion]

Do you know what kind of royalties they were getting per unit?

At first we were buying cartridges in lots for $159.00 each (priced to include pallet shipping per unit) and we would wholesale them for $179.00 and retail them for $199.99

Later, SNK started charging us $169, $179, $189, and it reached a high point at $250 per unit. (KoF2000 is a different story/details later).
So wholesale and retail prices went up to a high at $270w/$290r.

Generally we always kept the model of $20w/$40r royalty per unit sold.

After Playmore took over, rom chip prices dropped, so aes cartridges probably started to get down to $180 or lower again, but at that point the neo aes market was dying down thanks to the next gen systems (ps2, xbox, wii), and NGF didn't want to move or have anything to do with playmore. That company was run by morons and all they would do is rehash the same metal slug and kof series.

[forever gaming]

I could never understand why there is so much hate for you over on THAT "other" site. I was on there before comming here and and I got know your name as it was associated with all types of evil over there lol. Its nice that your hear a first hand account of part of the neo geo"s history. 8 have one question though. Why did snk give you permission to be a retailer? Wouldn't it have been more profitable to cut out the middle man ( you ) and sell directly to the public with possibly slightly raised prices ( the prices you would have charged)

[Dion]

I could never understand why there is so much hate for you over on THAT "other" site. I was on there before comming here and and I got know your name as it was associated with all types of evil over there lol. Its nice that your hear a first hand account of part of the neo geo"s history. 8 have one question though. Why did snk give you permission to be a retailer? Wouldn't it have been more profitable to cut out the middle man ( you ) and sell directly to the public with possibly slightly raised prices ( the prices you would have charged)

Thanks for the kind words. That other site actually forced members to flame NGF, Chris, and myself. (members/friends sent us various emails from the owner and moderators telling them to flame us). NG.com always felt a bit threatened by us. I never understood why cause we were just distributors/resellers and NGF sold him (ng.com) his entire personal collection, aes stock inventory on multiple orders, and if I recall correctly, something like 1000-2000 neo cds.


To your question on SNK and cutting out the middle man:

As for why snk allowed us to be a retailer, and not do it themselves... SNK did do retail orders direct from SNK-America offices (torrence and later san jose). NGF's exclusive rights were as the exclusive wholesaler/distributor, not for retail. Many retail stores/online sites sold AES cartridges, including NeoGeoFreak, SNK-America, Babbages, Japan Video Games, Nation Console, Dragon Video, GameDude, Video Connection, and many, many more all sold retail. We handled all those accounts. WE made the phone calls, took orders, received payments, and shipped the games.

Here's how it works:
Go to any business, doctors office, etc... if those places are buying water, doing advertisement, etc... they are dealing with a middle man or someone who has that account or maybe a sales representative/account manager.

another example: TVs.
You can go to walmart and buy a Sony tv. Do you think it would be wise for Sony to only sell direct and cut out the middle man?? Of course you don't. That's not the smart thing to do.

It's more convenient to have someone else do the sales in their specific area, with their own specific clientele. That is why we would give the special wholesale prices to people/companies buying in quantities of 12 or more. The lower wholesale price would allow that place to make a profit. They could reorder as long as supplies lasted. That's how it works for almost all businesses.

[Daytime Dreamer]

I am a member of that other site since 2005 and when your name came up it was always for a "bad" reason. There seemed to be so much hate for NGF and I never understood why. You seem like a really nice guy after all.

Question : Did you do anything to the AES's carts inserts? I am not sure but i remember various people saying that you somehow "destroyed" the inserts by putting NGF logos in the inserts. I could be terribly wrong here, it was something i read years and years ago

Finding people with so much love for the Neo is quite rare. Even though I own 30 AES carts and most of them are quite common in terms of rarity and value, the Neo Geo is and always will be my favorite gaming platform. So much quality in everything

Your AES collection must be breathtaking I'm sure. Never part with it and always keep it safe. Its nice that people like you exist from my point of view.

I bought some items from Cray from ngfusa 6 months ago and everything was more than ok. Just wanted to point this out to everyone in here :)

[Alchy]

I've read around and I'm curious about the insert thing. It seems like Dion was accused of taking stock, removing the original covers/inserts and inserting NGF ones instead. That does seem questionable behaviour to me.

Don't mean to bring the thread down into shit-slinging, just curious really.

[ASSEMbler]

Neo people seem to take picky to extremes, like obsessively collecting new in box mvs cartridges exclusively.

[Hewitson]

How is expecting an original insert and non-defaced manual on a brand new product extreme?

[spoonman]

I think it's big of Dion to defend his name. Most people would just say to hell with it and move on.

Personally I'm not sure what to think. I bought only 1 Neo-Geo Freak game and was a little upset on the quality of the insert. The MS3 insert seemed to be a color laser copy. I sold it off and bought an English AES MS3 from neo-geo.com. I was under the impression of this being the only way to obtain an English version of the Metal Slug 3 AES cart so I was happy that I was able to buy it. I didn't have any death threats on Dion though.. Some people were going a little too far on that stuff.

Dion, can you clear that part up for us? Was it true that you threw out or destroyed the Japanese AES inserts/stickers/manuals and replaced them with your own versions? Were all the inserts laser copies or just the Metal Slug 3 insert?

Thanks

[Hewitson]

[Core]

I've read around and I'm curious about the insert thing. It seems like Dion was accused of taking stock, removing the original covers/inserts and inserting NGF ones instead. That does seem questionable behaviour to me.
Don't mean to bring the thread down into shit-slinging, just curious really.

lol, NGF was not accused of this, they BOASTED about it. It didn't stop with that either. They saw fit to post shred SNK inserts at one of the CGE shows and then post pictures of it (as seen in the post above) on the net to rile up fans.

The valid criticism with NGF "policy" and (business) model with these "corrected" inserts is that they shoved it down people throats by making it mandatory. You did not have the option to keep the original euro style insert (if it contained what ngf refered to as an "incorrectly" colored genre stripe) or pay more to have both.

ngf would say that we have no rite to crititicize it because we were not forced to buy games from them which is ironic as he has openly stated that he wanted to become the sole distributer in the states. This would allow NGF to push thier corrected BS on those buying from them direct but more importantly, it would allow them to prevent companies like NCSX and Video Game Depot from getting thier hands on the large stock of NOS Neo Geo games that SNK had left and was trying to unload.

here is an excerpt taken from another forum:

QUESTION: "I wasn't here at the time, but didn't the Freaks fuck over a shit load of people? SNK ended up suing them?"

REPLY: "Bah, it wasn't the B.S. lawsuit - SNK lost that. SNK is not the brightest bunch of people collectively, never have been. They can't even remember who they sell/grant rights to.

It all stems from a laundry list of things including (but no limited to):

- Shreding (so called official) home cartridge inserts at one of the early 2000 CGE shows and then posting pictures of it on the net all to deliberately instigate and irritate the fans.

- Doing a "tar and feather" job to Shawns $20,000+ order of neo home carts and CD's (stock for the neo store) by putting NGF stamps and stickers (just like the ones that Game Dude is known for applying) in all cart manuals and on the backs of inserts all to screw him for speaking out against them in the past (around that time there were other bulk orders to retailers sent to those such as NCSX and VGD and none of those were stamped/stickered).

- Dion "assaulting" a kid (less than half the size and many years younger than himself) at one of the CGE shows some years back (there are pictures of this) and Dion has admitted to it.

There is a signifigant amount more. I mean, it's been years since all of this drama and BS went down so I will leave it up to some others to contribute.".

And Alchy, you don't need to be apologetic about asking a simple question, thats not bringing thigs down. Your just trying to get clarification and thats what one should do.

[Dion]

It seems people still have questions of the NGF inserts. Remember, everything we did was 100% official and fully authorized by SNK-Japan and SNK-America. As per Playmore's press release after their failed attempt at a frivolous lawsuit, Playmore confirmed that SNK fully authorized NeoGeoFreak/NGF-USA to sell NeoGeo cartridges with repackaged inserts.

So, to answer the insert question:

Yes we replaced the inserts, but only on certain games that either had the incorrect genre stripe (fighting/action/shooter/puzzle/racing/sports) and/or didn't have an official English release. (originally Metal Slug 3, Blazing Star, Pulstar, Magical Drop 2 and 3, Waku Waku 7, Kabuki Klash, etc...) We did this for fans looking to complete their english collection.

Pulstar with official fully authorized English repackage: INSANE RARE!!!!



NeoGeo Cup 98: Japanese version



NeoGeo Cup 98: official and authorized English version:
(previously unavailable)(Beautiful English insert)


The games we would send out would be NEW/Mint condition.

Other distributors also replaced or had their company logo on the manuals as well. It's a smart way of doing business.

Guillemot International: branded manuals:

[Alchy]

And it remains questionable behaviour. Shredding inserts in public?

Really?

[Dion]

And it remains questionable behaviour. Shredding inserts in public?

Really?

It depends on how you look at it.
Some people mod their cars, change the paint, change the engine. If you're the owner, you have the right to do whatever you want. Wouldn't you agree?

The Neo fans we sold to were more or so looking for the NGF or genre correct style inserts. At the cgs show, as customers bought the games, we all shredded the inserts. It was in sorts sending the message for games to be "genre" or "insert" correct.

About 7 years later, ng.com started doing the same thing with their "classic inserts." Have you guys received any proof or verification from playmore that he's allowed to do that?

I don't think people made such a stink about it cause the facts came out that NGF had the rights to do so, maybe ng.com was also granted the same rights.

[SuperGrafx]

Nice shirts.

[ASSEMbler]

Look, everyone knows what the disputed things about NGF are.

Please ask questions that haven't been asked already.

The insert thing is history. Any further comments about inserts will be removed.

-------------

Warranties: How many carts ever came back for warranty issues?

[Alchy]

Look, everyone knows what the disputed things about NGF are.

I really don't.

Please ask questions that haven't been asked already.

Nobody had asked such questions.

The insert thing is history. Any further comments about inserts will be removed.

Why?

Dion, is it so rude to ask for clarification on these issues?

[Dion]

Now the title of this thread is "NGF History and SNK buyout."
I mentioned some of the NGF history, now I'll go into some details of our SNK stock buyout:

NGF: SNK buy-out/liquidation
Since NeoGeoFreak had such a good business standing with SNK-Japan and SNK-America, we were given the first right of refusal on a massive inventory liquidation buyout of both Japanese and English aes cartridges and cds, as well as systems. Since we are no longer selling neogeo items as a business, I'll open up on the buy-out pricing:

SNK-Japan accepted NeoGeoFreak/NGF-USA counter offer:
The offer from SNK-Japan was double or triple on every price. NGF sent a counter offer for less than half of the original asking price from SNK-Japan.

example: SNK offer: 5000 aes cartridges $30.00 - we offered $10.

We felt strong to offer that price since we were willing to buy almost everything in cash, and not on consignment. Money talks.

Accepted counter offer:
5000 various AES cartridges for the price of only $10.00 each
5000 various Neo CD titles for only $3.00 each.
83 KoF99 (japanese and english) for $100 each.
1000 NeoGeo Pocket cartridges for $5.00 each (we didn't accept)
10 Neo AES systems for $100.00 each
100 Neo CD systems for $50.00 each

5000 aes x $10.00 = $50,000us
5000 cds x $3.00 = $15,000us
83 KoF99 aes x $100.00 = $8,300us
10 AES systems x $100.00 = $1000us
100 Neo CD systems x $100.00 = $5,000us
6 Super Neo 29 cabinets x $700.each = $4,200us
3 Super Neo 29: Type II x $900.00usd = $2,700us
1 Irritating Maze full size original cabinet - $1000us
shipping - roughly $3000us

total cost for everything: only $90,200.00us

We wholesaled most of the common aes cartridges (minimum lot of 100) for $30-$40 and the cds (minimum lots of 100) for only $6/retailed $15.00.
Uncommon aes titles went for $50-$80.
Rare AES - $100-$150
KoF99 we wholesale priced at $130.00/retail $150.00
Neo cabinets sold for $1000.00 (i sold a regular and a type 2 for a special price of $500 each to jeff kurtz not long ago)(gave him a great deal).

Since we had all that new stock, we were able to offer our mass releases of 6 games: Bang Bead, Bust-a-Move, Diggerman, Irritating Maze, ZedBlade, Zupapa. On those 6 titles we took in $325,000us!!! And that was only 1000 aes carts sold from 5083 aes stock. We still had another 4000 aes carts, 5000 neo cds, aes and cd systems, etc... to add up. And we still sold various conversions, inserts, collectibles, etc....

All in all, NeoGeoFreak/NGF-USA made over $4million on our buy-out. It was a wild ride and an even wilder time. I was only 31/32 years old. Chris was only 30 years old. We've both been semi-retired ever since. Both Chris and myself still keep my eyes open for all types of deals.

I now do real estate. My semi retired status has a lot to do with looking and securing good real estate investments, but it's on my own time. When I do find deals, I work full time rehabbing and improving the property. I've learned quit a bit from the crash in both our economy and housing market (I fell victim to losing close to $1million in real estate crash). I'll be the first to admit, that being so young and getting lucky with a few investments doesn't mean you'll always be so lucky. I made my share of mistakes. Not just in regards to the neogeo, but in life and other business ventures as well.

If I ever offended anyone in the neo scene, you have my sincere and humble apologies.

[ASSEMbler]

Were you even really a neo gamer or was it just an investment?