Razer CEO says Covid-19 has accelerated path to the ‘Metaverse’, where content, commerce and networking exist in true virtual world
- Min-Liang Tan says Razer is gearing up for the metaverse, an interactive, 3D gaming world
- Fortnite, Roblox and Minecraft have become popular destinations for social interaction during the recent pandemic
Min-Liang Tan, chief executive of gaming company Razer, said that the Covid-19 pandemic is driving the internet to the next stage of its evolution – something called the ‘Metaverse’ where cyberspace becomes more of an interactive 3D space with commerce and networking alongside content, much like the worlds in popular games such as Fortnite and Roblox.
Moreover, businesses and celebrities are getting in on the act by hosting product reveals and virtual concerts, driving the commercial potential.
First coined by science fiction writer Neal Stephenson in 1992, the metaverse has gained traction in recent months as mammoth gaming hits such as Fortnite, Roblox and Minecraft have morphed into primary destinations for social interaction amid lockdowns and social distancing in the real world.
The metaverse was also given a further push by the 2018 sci-fi movie Ready Player One, directed by Steven Spielberg, in which every member of society wears a virtual reality headset and can plug into a virtual world.
Tan said the Covid-19 pandemic has vastly inflated the number of gamers, making the metaverse concept more realistic than ever.
“We're not there yet but we are really stepping up for it,” said Tan in an interview with the Post this week. “Covid-19 has accelerated the path to the metaverse … primarily because those who typically would not have been a gamer, have now become gamers … and we believe that the first citizens of the metaverse will be gamers,”
Singapore-based Razer has benefited from a gaming boom during Covid-19, along with Chinese names such as Tencent Holdings and NetEase, and is also in the midst of transforming itself from essentially a hardware manufacturer – from gaming PCs, to headphones and mice – into a company that can serve the entire market with online services, including its digital gaming currency Razer Gold.
Game consultancy firm Newzoo estimates that 2.7 billion gamers worldwide will spend around US$159 billion on video games in 2020, making video games a bigger industry than movies and music combined.
Razer CEO says pandemic will change sports and entertainment forever
Epic Games’ Fortnite has often been often cited as the closest thing to the metaverse the world has seen so far, and the company’s founder Tim Sweeney is a vocal proponent of the theory.
With over 350 million registered players, 100 million of which were added in the past year, Fortnite has become a platform all on its own, hosting concerts for singer Travis Scott and debuting a scene from Star Wars movie The Rise of Skywalker.
Silicon Valley-based gaming platform Roblox is also a metaverse player.
Users logged 3 billion hours on Roblox globally in July alone, according to data compiled by its makers, Roblox corp, and The Economist. Due to the Covid-19 pandemic, the game’s number of monthly active users has soared from 115 million in February to 164 million in August. Many gamers are children and the company says that three-quarters of American kids between 9 and 12-years’ old play the game.
Tan said financial services are key to unlocking the possibilities of the metaverse for Razer.
“Now with [both hardware and software being ready], you also have to think of the whole economy of the metaverse at the same time,” said Tan. “And that’s where things like payments, digital currency and all that come in.”
The company’s digital currency, Razer Gold, can now be used to purchase virtual goods from games such as PUBG Mobile and Monster Hunter: World. Other online services such as live-streaming platform Twitch and dating app Tinder have also started to accept Razer Gold as a form of payment.
Moreover, Razer Gold is now being sent to content creators as part of Razer’s Covid-19 charity campaign and it was used in a number of virtual clubbing events held by the company. Tan pointed out that Razer is different from the likes of Epic Games, Roblox, Tencent and Nintendo as it is not a game developer.
“When game companies compete, they tend not to want interconnections of virtual credits. But we don’t guard our users jealously like the game companies,” Tan said, “Razer is unique in the sense that we are not publishers and we are not developers. That‘s why Razer Gold has been so readily accepted by so many game companies out there.”
Razer’s new Pikachu earbuds are unleashed from a Poké Ball charging case
The Hong Kong-listed company this week announced that total revenue in the first half increased about 25 per cent year-on-year to a record US$447.5 million. Gaming companies such as Tencent and Nintendo have all logged record level revenue during the pandemic.
“To its credit, Razer has gradually increased the percentage of revenue from software and services from zero in 2016 to 14 per cent in first half 2020,” said Arun George, co-founder of London-based Global Equity Research, on fintech platform Smartkarma. “Software and services gross margin rose from 41.7 per cent in the first half last year to 46 per cent this time, due to the increase in gaming activities and utilisation of Razer Gold.”
Razer’s fintech business has also become a major growth driver, reporting a 114 per cent year-on-year increase in total payment volumes in the first half.
Razer applied for a full digital bank licence in Singapore in January this year – in a consortium comprising Sheng Siong Holdings, technology company LinkSure Global, automotive marketplace Carro, insurance services firm FWD and Insignia Ventures Partners – but Tan said progress on that front has been delayed due to Covid-19.
