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World's largest gamer firm Razer unveils record-high revenue of $447.5m during pandemic

·Head of Yahoo Finance UK
·3-min read
Gamers play 'Overland' by Blizzard using hardware from Razer during the 2017 Consumer Electronic Show (CES. Photo: FREDERIC J. BROWN/AFP via Getty Images
Gamers play 'Overwatch' by Blizzard using hardware from Razer during the 2017 Consumer Electronic Show. Photo: Frederic J Brown/AFP via Getty Images

Global gaming ecosystem giant Razer (1337.HK) just unveiled record high revenue of USD $447.5m (£339m), representing 25.3% year-on-year growth during the coronavirus pandemic period.

The HKD $15bn group, listed in Hong Kong with the second most successful IPO in 2017, told Yahoo Finance UK in a statement that results across the board showed a surge in growth in the six months ending June 2020.

  • Gross Profit Margin: Improved to 22.0%

  • Positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA): $3.2m, beating expectations fuelled by exceptional revenue growth and continued cost efficiency improvements

  • Cashflow from operating activities: Turned positive to $66m

  • Cash balance: Over $500m with no debt.

“2020 has been a year like no other for all of us around the world. Despite the global market uncertainty caused by the COVID-19 pandemic, Razer has had a spectacular start to the year, driven by dominant brand position, user base expansion and stay-at-home trends,” said Min-Liang Tan, co-founder and CEO of Razer.

Chart: Yahoo Finance
Chart: Yahoo Finance

Razer is most famous for its elite gaming hardware but has evolved over the years to include other services including payments, as well as software and fintech.

E-sports is a form of sport competition using video games, often taking the form of organised, multiplayer video game competitions, particularly between professional players, individually or as teams. Optimal gaming hardware is just as important as connection.

READ MORE: Razer CEO on how the gamer giant plans to spend its $500m cash amid record results

Since the spread of coronavirus across the globe, lockdowns and travel bans have meant people have been stuck at home — which has driven gaming volumes up to new heights.

Marketing intelligence service WARC revealed that global advertising spend on e-sports is expected to rise to $844m in 2020 and is forecast to top $1bn in 2022. The focus will be on the application of advertising in mobile gaming, streaming and e-sports.

The research forecasts $615m is to be spent on the sponsorship of competitors or e-sport tournaments. A further $229m will be spent on spot ads during e-sport broadcasts, representing a 1.7% rise at a time when traditional television advertising is set to fall by 13.8%.

“The global ‘stay-at-home’ situation has boosted user engagement with gaming and e-sports to record levels. With our gamer/youth-centric ecosystem of hardware, software and services, Razer is well-positioned to capture the opportunities of these secular trends,” said Tan.

“The fundamentals of our business remain as solid as ever, thanks to our entrenched brand leadership, compelling offerings across hardware, software and services and strong execution. We are confident that these factors, coupled with our strong operating cost discipline and our strong cash position of over $500m, put us in good stead, even during times of challenging global economic conditions,” he added.

A volunteer touches an illuminated keyboard at the booth of Razer during a press day at the IFA, the world's leading trade show for consumer electronics and home appliances, in Berlin on September 4, 2019. Photo: TOBIAS SCHWARZ/AFP via Getty Images
A volunteer touches an illuminated keyboard at Razer's booth at the IFA trade show. Photo: Tobias Schwarz/AFP via Getty Images

E-sports are most popular in Asia, with 30% of viewers, 20% of e-sports viewers are in Latin America, 14% in Europe and MEA, respectively, and 13% in North America.

Uptake is greatest among Gen Z at one in four (27%) and stands at one in five (20%) among millennials.

Since it’s IPO in 2017, Razer has doubled down on dominating the gaming space in hardware as well as acquiring and launching services that tie into the gaming experience. In 2018 it fully acquired e-payments platform MOL for about $61m and later that year made its debut in Malaysia by launching an e-wallet service called Razer Pay.

Over the last year, it has also rolled out some huge hardware releases, tapping into the appetite from veteran gamers and newbies to the industry.

Last month, it released “the new triple threat in esports” — the Razer BlackShark V2 — and the Razer Huntsman Mini 60% keyboard for gaming and esports.