China’s e-sports industry drives growth for gaming hardware firms
Nation’s obsession with e-sports an opportunity for brands like Logitech and Razer to showcase their gaming products in front of millions of Chinese gamers
Gaming has reached fever pitch in China with its 600 million gamers almost double the population of the United States, driving an industry worth US$24.6 billion annually.
Gaming hardware suppliers such as Logitech are keen to tap into the massive market potential of a country where almost every other person plays a PC or mobile game. Known more for its computer mice and keyboards, the Swiss-based company doubled down on its gaming hardware business five years ago and today counts China as a key market for its Logitech G line of gaming accessories.
“[Although] we are also in the computer accessories and video conferencing market in China, the biggest driver [of growth] has really been gaming,” Quin Liu, vice-president and managing director of Logitech in the Asia-Pacific region, said in an interview.
Liu pointed towards the League of Legends World 2017 finals in Beijing as an indicator of the industry’s rapid growth. Held in early November, the finals for China’s most popular PC game were held at the Beijing National Stadium, an Olympic-size arena commonly referred to as the Bird’s Nest, with a maximum capacity of 91,000 spectators.
China’s obsession with e-sports has proven to be an opportunity for brands like Logitech and rival Razer to showcase their gaming accessories in front of the millions of Chinese gamers who watch e-sports competitions live or online. Logitech has sponsored professional gaming teams, including the winning South Korean team in the so-called World Cup tournament for popular PC game Overwatch in November. The thinking behind the sponsorship strategy is that gamers will be eager to use the same gaming accessories that top e-sports teams use for tournaments.
Hong Kong-listed Razer actively sponsors top Chinese League of Legends gaming team EDward Gaming, and has engaged celebrities like Hong Kong actor Nicholas Tse and actress Angelababy to help promote its products.
These efforts seem to have paid off. On JD.com, Logitech’s 399 yuan (US$60) G502 programmable gaming mouse is the top-selling product in its category.
“If you don’t have this mouse, you can’t call yourself a gamer in China,” Liu said.
“Three or four years ago the China market was more low end and price sensitive, but now that’s gone away,” he said, adding that gamers are now much more willing to spend on high-end accessories.
For Logitech, gaming accessories account for almost 18 per cent of its total sales globally, and is the third largest category behind its bread-and-butter business of PC mice and keyboards, according to its second quarter earnings report.
Razer, which has dual headquarters in San Francisco and Singapore, is also going head to head with Logitech when it comes to sales of gaming peripherals in China. During the Alibaba Singles’ Day shopping festival on November 11, Razer said it emerged the top gaming peripherals brand in terms of sales, with Chinese consumers mostly snapping up its Deathadder mice series and Blackwidow gaming keyboards. Alibaba owns the South China Morning Post.
In June, Razer chief executive Tan Min Liang said in an interview that Asia makes up a third of its business, with China being “a big part of that”. The country was also “a growing focus” for Razer, which went public on the Hong Kong bourse in November.