Razer on Looking Ahead to a Future Shaped by COVID-19

Global gaming hardware company Razer, like many others, felt unsure about how profoundly the COVID-19 pandemic would impact its business. As the pandemic hit, traditional entertainment mediums closed, forcing many to search elsewhere for things to occupy their time. For more than a few, that search took them to a place that appears to be insulated from the shutdown effects of the pandemic–gaming and esports. Thanks to social distancing, stay-home-orders, and the close of traditional businesses,  Razer’s numbers have been on the rise. So instead of laying off employees, the company has been able to pivot quickly in dealing with the effects of COVID-19.

David Tse, global esports director for Razer shed some light on how COVID-19 has affected the company and what they are doing to help others cope during the pandemic.

“Due to our deep roots within the gaming sector and diverse ecosystem of hardware, software, and services, we were able to successfully navigate our business through the COVID-19 crisis,” Tse said.”The team at Razer is one of our greatest assets and has brought Razer to where we are today, so employee safety is always a top priority for us – and especially during these times. We implemented a WFH plan for all employees before many regional governments had declared it mandatory and we have continued to work alongside local health authorities to ensure that our employees are safe.”

The pandemic has forced companies to take a hard look at the juxtaposition of employee safety as it relates and the financial bottom line. For Razer, even with the fact that the company once transitioned one of its production facilities from hardware to surgical masks, it has seen better than expected numbers in terms of sales.

In H1, Razer showed in its earnings report that the company had its largest revenue to date at $447.5M USD, a 25.3% increase this far in its year-on-year growth. This has allowed Razer to launch a $50M initiative to support a three-tier ecosystem it is using to subsidize partners. One of those tiers being subsidized is Razer Fintech, a host of offline-to-online digital payment networks, which is seeing transaction fees being waived or reduced so that Razer merchants can keep more of the funds.

That isn’t all.

“During the pandemic, Razer has made numerous efforts to support partners and communities including transitioning product production lines to mask production lines and donating a total of 1 million masks to health authorities globally,” Tse said. “Gamers can also pledge masks using Razer Silver earned through Razer’s Paid to Play program. Additionally, we have supported local esports venues such as Esports Arena in Santa Ana, California, and Helix Esports Centers across New Jersey to produce digital esports events. “

One of the major effects COVID-19 has had on esports is that events both large and small have been forced to move to an online medium instead of in venues with fans. As TEO’s Trent Murray reports, gaming and esports viewership is up more than 50% in H1 2020. It stands to reason that viewership is up because of the switch to online formats, and this has actually been a boon for Razer. With events still taking place and more people staying at home playing games, the need for hardware is prevalent.

“We are fortunate that gaming is an electronic platform and the community hasn’t faced as much difficulty adapting to online only – after all, it’s electronic sports for a reason,” Tse said. “Razer was at the forefront of that change with the Razer Invitational – SEA qualifiers and finals held entirely online with athletes competing from the safety of their homes. Esports audiences and communities have always operated in both an offline and online fashion which is why I believe that the esports community will have no difficulty adapting to the new online normal. With the presence of well-established online casters and streamers in the ecosystem, I believe esports is at the forefront of online tournament capability, which will continue to strengthen audiences and online viewership.”

Additionally,  Razer has laid down some roots in Southeast Asia, having launched the successful Razer Invitational – SEA. Ten nations along with 500 teams played in the event featuring the games Dota2, PUBG MOBILE, and Brawl Stars–all played completely online. The success of this event has given Razer confidence in future online events even when guidelines surrounding COVID-19 are relaxed.

“Razer will continue to support initiatives such as the Razer Invitational in other regions because we believe the online format, with good communication and content, will drive sustainable engagement from our audiences, providing teams, players, and partners with new opportunities,” Tse said.

The reality for those in gaming and esports was that nobody could have predicted that the COVID-19 pandemic would actually benefit those in the industry. The lessons learned from the effects of COVID-19 are numerous and will permeate the space for years to come. Tse and Razer have already learned some of those lessons and are ready to use that knowledge going forward.

“The esports industry will fundamentally be shaped by the growth of the audiences and their consumption behavior,” Tse said. “Even with the current Covid-19 situation, we are seeing viewership continue to grow in the top core esports games, like League of Legends and Dota2, as those audiences have remained strong and loyal. I believe consumption behavior may change too, with both casual and enthusiast viewers, accelerated by the introduction of 5G networks enabling increased viewership from mobile devices. This in turn will generate more casual interest as barriers to entry are removed, further broadening participation in the ecosystem.”

Lastly, Tse believes that it was the pandemic that accelerated the strong crossovers between traditional sports and esports. When traditional sports were halted, it only made sense for networks to put their eyes on esports.  

“There will also be strong crossover, fueled by the new initiatives from the traditional sports during the current Covid-19 situation where we have seen growth of audiences and actual players from the traditional sports participating in esports, like F1 and Premier League,” Tse said. “This too will be a new growth area for esports, bringing in new communities to the ecosystem.”

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