Razer buys audio-visual firm THX to cash in on growing Chinese cinema market
THX working with Chinese authorities to help improve the quality of audio and video in domestic movie theatres
Razer Inc, the California-based gaming device provider, has bought audio-visual entertainment company THX for an undisclosed amount, and now plans to help the firm expand into the growing Chinese cinema market as well as combine the two companies’ strengths in developing virtual reality technology.
Tan Min-Liang, Razer’s chief executive and co-founder, said the start-up had acquired the majority assets of THX, including its intellectual property.
Razer has 20 million gamers worldwide using keyboards, high-performance laptops and other paraphernalia for computer games.
San Fransisco-based THX, founded in 1983 by Star Wars filmmaker George Lucas, will continue to run independently, Tan said.
China’s cinema market is expected to surpass the United States in terms of box office revenue by 2017, according to PwC estimates.
“One of the big opportunities is that you’re seeing a massive, massive upswing of activity in cinemas in China and THX is well poised to be one of the biggest entertainment brands in China,” Tan said.
“As cinema goers [in Asia] get more and more affluent they’re looking for a better experience.”
PwC estimates Chinese box office revenue will hit US$15.08 billion by 2020, up from US$6.3 billion last year. Cinema admissions are expected to reach 2.5 billion in 2020, from 1.16 billion in 2015.
Equipment in China’s cinemas is relatively new and advanced with 86 per cent of screens configured for 3D films.
The country is the world’s largest 3D box office market worth US$2 billion in 2014 and is the second-largest and fastest-growing market for film format IMAX, according to Cecilia Yau, PwC China and Hong Kong entertainment and media partner.
Bloomberg reported in 2015 around 15 new cinema screens opened in China each day.
THX is already working with China’s State Administration of Press, Publication, Radio, Film and Television to develop new cinema standards for the domestic market to help improve the quality of audio and video in movie theatres springing up around the country.
Tan said the acquisition will also allow Razer to combine its VR technology with THX’s audio expertise to provide a richer experience for users.
“Some of the fundamental problems in virtual reality, for example visual fidelity, audio spatial awareness, these are things that THX has a lot of fundamental IP that can feedback to the VR industry,” Tan said.
Razer launched a VR platform earlier this year called Open Source Virtual Reality providing a set of open hardware and software designs developed by Razer and its partners to facilitate VR functions.
Research firm Juniper predicts the VR hardware market will be worth US$50 billion by 2021, up from the expected US$5 billion revenues for this year.
Razer was founded in 2005 and produces systems, software and hardware for gamers.
Earlier this year, it raised US$75 million in funding from Hangzhou Liaison Interactive Technology, bringing its valuation to a reported US$1.5 billion.
Last month Razer launched a US$30 million venture fund called zVentures to invest in start-ups developing technology around the Internet of Things , or connected devices, virtual reality, alternate reality, robotics, analytics and e-sports.