Min-Liang Tan
Auto Added by WPeMatico
Razer hooks up with Tencent to focus on mobile gaming
Razer is summoning a big gun as it bids to develop its mobile gaming strategy. The Hong Kong-listed company — which sells laptops, smartphones and gaming peripherals — said today it is working with Tencent on a raft of initiatives related to smartphone-based games.
The collaboration will cover hardware, software and services. Some of the objectives include optimizing Tencent games — which include megahit PUBG and Fortnite — for Razer’s smartphones, mobile controllers and its Cortex Android launcher app. The duo also said they may “explore additional monetization opportunities for mobile gaming,” which could see Tencent integrate Razer’s services, which include a rewards/loyalty program, in some areas.
The news comes on the same day as Razer’s latest earnings, which saw annual revenue grow 38 percent to reach $712.4 million. Razer recorded a net loss of $97 million for the year, down from $164 million in 2017.
The big-name partnership announcement comes at an opportune time for Razer, which has struggled to convince investors of its business. The company was among a wave of much-championed tech companies to go public in Hong Kong — Razer’s listing raised more than $500 million in late 2017 — but its share price has struggled. Razer currently trades at HK$1.44, which is some way down from a HK$3.88 list price and HK$4.58 at the end of its trading day debut. Razer CEO Min Liang Tan has previously lamented a lack of tech savviness within Hong Kong’s public markets despite a flurry of IPOs, which have included names like local services giant Meituan.
Nabbing Tencent, which is one of (if not the) biggest games companies in the world, is a PR coup, but it remains to be seen just what impact the relationship will have at this stage. Subsequent tie-ins, and potentially an investor, would be notable developments and perhaps positive signals that the market is seeking.
Still, Razer CEO Min Liang Tan is bullish about the company’s prospects on mobile.
The company’s Razer smartphones were never designed to be “iPhone-killers” that sold on volume, but there’s still uncertainty around the unit with recent reports suggesting the third-generation phone may have been canceled following some layoffs. (Tan declined to comment on that.)
Mobile is tough — just ask past giants like LG and HTC about that… and Razer’s phone and gaming-focus was quickly copied by others, including a fairly brazen clone effort from Xiaomi, to make sales particularly challenging. But Liang maintains that, in doing so, Razer created a mobile gaming phone market that didn’t exist before, and ultimately that is more important than shifting its own smartphones.
“Nobody was talking about gaming smartphones [before the Razer phone], without us doing that, the genre would still be perceived as casual gaming,” Tan told TechCrunch in an interview. “Even from day one, it was about creating this new category… we don’t see others as competition.”
With that in mind, he said that this year is about focusing on the software side of Razer’s mobile gaming business.
Tan said Razer “will never” publish games as Tencent and others do, instead, he said that the focus is on helping discovery, creating a more immersive experience and tying in other services, which include its Razer Gold loyalty points.
Outside of gaming, Razer is also making a push into payments through a service that operates in Southeast Asia. Fueled by the acquisition of MOL one year ago, Razer has moved from allowing people to buy credit over-the-counter to launch an e-wallet in two countries, Malaysia and Singapore, as it goes after a slice of Southeast Asia’s fintech boom, which has attracted non-traditional players that include AirAsia, Grab and Go-Jek, among others.
Powered by WPeMatico
Razer doubles down on Southeast Asia and payments with acquisition of MOL
Gaming hardware maker Razer, which went public in a big IPO in Hong Kong last year, is doubling down on payments after it announced a deal to acquire MOL, a company that offers online and offline payments in Southeast Asia.
Razer made an initial $20 million investment in MOL last June to supercharge its zGold virtual credit program for gamers by allowing them to buy using MOL’s online service or its offline, over-the-counter network of retailers that includes 7-Eleven. Now Razer aims to gobble up MOL in full by acquiring the remaining 65 percent, which will allow it to grow its alternative revenue streams by pushing fully into payment services by merging MOL’s virtual payment platform with zGold.
It’s worth noting that the deal is an intention to buy MOL. It’ll be subject to review from shareholders, but Razer said it has already secured support from major shareholders. The transaction gives MOL, which delisted from the Nasdaq in 2016 following a bumpy two-year spell, the same $100 million valuation it held for the initial Razer investment.
The acquisition will boost Razer’s recently announced online games store, which rivals services like Steam, but first and foremost it is focused on growing the firm’s share of online sales in Southeast Asia’s growing e-commerce and payment space. To that end, Razer recently launched a store on Lazada, the Alibaba-owned e-commerce service in Southeast Asia, something that Apple did earlier this year.
“We are already the No. 1 gaming brand in the U.S., Europe and China, but Southeast Asia is still nascent and a very small part of our business,” Razer CEO and co-founder Min-Liang Tan told TechCrunch in an interview. “We see this [deal with MOL] as stuff we can do immediately.”
Tan said that, in particular, working with MOL saw revenue grow “dramatically” while MOL itself surpassed $1.1 billion in GMV across its payment network last year.
“This is the perfect opportunity for us to not just be a minority shareholder, but to combine the business and continue scaling from here,” he added, reiterating that he believes the deal gives Razer the world’s largest virtual credit system for gamers based on user registrations. “That’s a huge opportunity for us.”
Away from its core business, the push will also help Razer in Singapore where it has applied to develop a unified e-payment system that would be used across the country, which is the Razer CEO home nation.
Tan said he has kept an ongoing dialogue with regulators, adding that he believes this deal “makes it clear that we don’t just have the scale, we also have the right technology.”
Beyond the Singapore opportunity, where Razer is a new entrant and thus considered an outsider for the license, Tan said the focus is on enabling cash-less payments right across Southeast Asia.
The blockchain has been widely touted as a building block that can help develop financial inclusion platforms in emerging markets, but for now Razer isn’t talking about whether it will hop on that wagon.
“We are excited about blockchain and the technology it brings, but we don’t have anything to comment on at this juncture,” Tan said.
The Razer chief was more vocal on the company’s wider goal, which he said is to develop “an entire ecosystem for our games partners.” The goal is to offset Razer’s impressive hardware sales business by constructing services that span game payments, game distribution and analytics on gamers and their behavior.
That optimism isn’t shared right now by investors in Hong Kong, however, which lured Razer as part of a push to attract more tech listings. Despite a surge when it when public in November, the stock traded at an all-time low of HK$2.44 today, down from its initial list price of HK$3.88.
Tan said he is focused on growing the business and its services regardless, but he did admit there’s a need for “the Hong Kong investment public to be more educated on tech companies.”
Powered by WPeMatico
Razer, the billion-dollar firm often labeled the Apple of PC gaming, is finally opening its first concept store in the U.S. this weekend.