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KPMG: Car makers will lose $100B in 2021 due to semiconductor shortage

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KPMG: Car makers will lose $100B in 2021 due to semiconductor shortage

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The semiconductor shortage is putting the brakes on global automakers, and it could cost them $100 billion in lost revenues in 2021, according to a report by accounting firm KPMG.

The $100 billion in lost revenue is taken away from the approximately $2.1 trillion automotive market was expected to make in 2021, compared to its revenues of $1.65 trillion in 2020.

Nothing has demonstrated more clearly how much our economy and way of life depend on semiconductors than its current global shortage, KPMG’s principal chip adviser Scott Jones wrote in the report. A series of events — a perfect storm of natural and man-made events, including the COVID-19 pandemic — has created a serious shortage of semiconductor products that is expected to last well into 2022. Technological advancements and the increasing need for chips across industries have only worsened the shortage.

Chipmakers like TSMC and Intel are investing billions of dollars into new factories to boost production, but it takes time to build those factories, and new supplies will come too late to help automakers and other customers suffering shortages in 2021.

Slow-motion wreck

Above: KPMG said a perfect storm caused the chip shortage.

Image Credit: KPMG

It’s kind of a slow-motion train wreck. At the start of the pandemic, most automakers slashed orders of nearly all the components of their vehicles in anticipation of a major drop-off in demand for auto sales. Meanwhile, other semiconductor customers continued or increased purchases of semiconductors to meet the increased demand from work-from-home requirements, driving the need for more PCs, cloud compute capacity, and communications infrastructure.

When demand for vehicles started to accelerate, automakers were stuck behind a large backlog of orders from other larger semiconductor customers who had continued orders throughout the pandemic. Semiconductor companies were already running at near full capacity from the surge in those orders and had no ability to support the resuming automotive orders. Now, a shortage of a relatively inexpensive chip could hold off production of a $50,000 car.

KPMG saw that companies and manufacturers that use semiconductors cut production and trimmed earnings forecasts, with automakers clearly hit the hardest. While automakers account for only about 10% of global semiconductor sales, KPMG estimates that they will suffer about 80% of the $125 billion in lost sales due to the shortage — about $100 billion. Many leading automakers are predicting that production will be affected through the end of the year; semiconductor executives expect a 2022 recovery.

Beyond the more than $100 billion in lost revenue, KPMG estimated automakers will have to spend upward of $10 billion to $15 billion in a one-time cost to rebuild buffer inventory, upgrade the supply chain, and secure more capacity for the future. Additionally, KPMG expects an annualized cost increase on semiconductors to impact automakers by $1 billion to $2 billion annually.

While these costs and expected losses are large, automakers are mitigating the impact by shifting their production and focus to more profitable vehicle platforms. This shift aligns with current pandemic-driven consumer demand and expected emerging demands as many consumers shift to electronics-driven, smarter, and autonomous cars.

What went wrong for automakers?

kpmg 6

Above: A whipsaw in demand for chips.

Image Credit: KPMG/WSTS

Many automakers lack the close relationships with semiconductor suppliers that other customers have developed over time, Jones said. Despite the rising importance of semiconductors in their products, they haven’t adjusted their supply chain to reflect how critical semiconductors have become. They mostly rely on third parties, such as tier-1 suppliers, to deal with chipmakers, and they generally lack visibility into, and understanding of, the supply chain.

There are no quick fixes, but industry and government entities all over the world are taking steps to improve the long-term situation.

How can automakers avoid being caught short next time?

kpmg 7

Above: Cars use a lot more electronics than they once did.

Image Credit: KPMG

The pandemic was a once-in-a-century event — hopefully — but now it will be prudent for car makers to consider what to do next. Jones said they will have to collaborate more closely with semiconductor manufacturers and foundries. Instead of relying on tier-1 suppliers or on indirect supply-chain management, automakers should collaborate directly with semiconductor manufacturers.

They should consider making investments in chipmaking capacity, he said. Automakers can take an active role in ensuring that there is enough capacity for the chips they need by reserving capacity, guaranteeing demand, or making direct investments to increase capacity.

They should also use data-driven supply chain decision-making. As supply chains become more complex, planning by spreadsheet is no longer adequate. “Cognitive planning” can configure and integrate supply chain activities using machine learning and artificial intelligence.

And automakers should overhaul the process for selecting, designing, and sourcing. In the longer term, they can avoid supply problems by reducing reliance on custom parts and instead use standard parts that can be modified or updated via software. Selecting hardware that works with open source software can reduce costs and guarantee access to multiple suppliers.

They should also address organizational barriers to optimize the semiconductor supply chain. For example, they could use dedicated centralized teams to oversee electronics and semiconductor supply chains. The shortage is expected to last well into 2022; however, now is the time to plan for the long term to avoid problems in the future.

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Vungle agrees to buy influencer marketing platform JetFuel

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JetFuel cofounders JJ Maxwell and Tim Lenardo.

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Vungle has agreed to buy influencer marketing platform JetFuel for an undisclosed price.

The deal is the fourth acquisition that Vungle has made in the past seven months, and the first since it acquired playable ads firm TreSensa in May.

San Francisco-based Vungle is creating a mobile performance marketing platform and it believes that JetFuel can position it for the next generation of user acquisition by helping it reach audiences in the fast-growing creator economy, said Jeremy Bondy, CEO of Vungle, in an interview with GamesBeat.

A changing market

San Francisco-based JetFuel enables app developers and other advertisers to scale marketing campaigns across a network of over 15,000 fully-verified influencers, with a combined reach of over 4 billion Instagram followers, 1.5 billion TikTok followers, and 100 million daily Snapchat views. Influencers started out as a cheaper alternative to paid user acquisition via advertising.

“You have somebody who’s making an individual choice to tell the story of your brand in a really authentic way,” Bondy said. “And they’re using their own personal cachet and channel in order to tell that story. You’re not relying on this pure distribution algorithm across apps. It’s much, much more personalized. ”

Advertisers could cut deals with influencers to get them to hawk goods to their followers. And while influencers have become extremely, uh, influential, it’s hard to scale because it isn’t easy to cut deals with every single one of them.

That’s where JetFuel comes in, as it has made a platform to help automate the process of reaching influencers. As Vungle continues to expand the breadth of its mobile performance marketing platform, JetFuel enables Vungle to offer advertisers even greater reach in acquiring high-value users and the ability to target the increasingly valuable Gen Z market through engaging, influencer-owned viral content that drives action.

“This emerging and undeniably fast-growing influencer segment is increasing day by day, and it’s becoming more and more compelling,” Bondy said. “In our diligence, we found that every CEO of a gaming company that we talked to said that they had some form of influencer strategy, whether it be in the early stages or a mature team. And that directly ties back to our relevance within the overall gaming business. We started off just working with marketing and growth teams as a network. And then we expanded to data teams through AlgoLift, and then to game and product teams through GameRefinery, to design teams through TreSensa, and now to social teams through JetFuel.”

The global influencer market is expected to be worth $13.8 billion in 2021, up from $1.7 billion in 2016, a compound annual growth rate (CAGR) of 52%, according to a 2021 report by the Influencer Marketing Hub. Advertisers continue to invest a larger share of their marketing budget in influencer marketing each year. JetFuel has innovated in this space by automating campaign management and execution, removing the need for the time-consuming manual work that is characteristic of traditional influencer marketing. The company charges advertisers on a cost-per-action (CPA) basis, ensuring that advertisers achieve measurable outcomes with high ROI. JetFuel also empowers influencers to create authentic, custom promotions that drive strong results.

Above: JetFuel cofounders JJ Maxwell and Tim Lenardo.

Image Credit: JetFuel/Vungle

“The growth is undeniable,” Bondy said. “It’s a 52% CAGR with no slowing down in sight.”

Bondy said that JetFuel has a forward-thinking vision that influencer platforms like JetFuel can reach Gen Z audiences that are normally hard for advertisers to reach through traditional means.

“They empower influencers on the creator side as well as advertisers,” Bondy said. “The company has only been around for three years, and they built this massive following. What we found natural about the fit is that everything they do is performance. Every single advertiser engagement is set up on a cost-per-action (CPA) basis. It’s pure performance and so it scales really nicely. We think the infusion of our advertiser base could turn this into the next Vungle.”

JetFuel provides tools for influencers to build their business.

“They empower the creator economy with offers, recommendations for how to build their stories so that they can market products effectively,” Bondy said. . They can even offer financial products down the road. And this really feeds the scalability and virality of it. There are incentives for creators to bring on other creators. So it has that snowball type of effect. We anticipate investing very, very heavily in the growth of this business.”

A shopping spree

This acquisition means that Vungle is still closer to its goal of creating mobile performance marketing platform that addresses the complete app growth cycle. Combined with GameRefinery, AlgoLift, and TreSensa, the Vungle platform provides a suite of tools, including game design and development, marketing, playable ads, and measurement.

Apple has driven this change with the modification to the Identifier for Advertisers (IDFA), which helps track users for ad targeting. Apple has prioritized privacy over ad targeting, so it’s getting a lot harder to acquire users for specialized games such as strategy. The first three acquisitions that Vungle did were dealing with that IDFA change in some way.

“What’s interesting about this one, as relates to IDFA, is that you have a direct relationship with the creator, which is analogous to AppLovin’s ownership of content, or could be depending upon how deep relationships we build with those creators,” Bondy said. “So I think that’s probably the most relevant connection point.”

How JetFuel works

Tim Lenardo, CEO of JetFuel, said in a statement that there are huge benefits to pairing up with an ad tech leader like Vungle, as JetFuel is solving problems in influencer marketing now that are similar to those that Vungle has spent the past 10 years solving in mobile. Lenardo and JJ Maxwell, the cofounders, were app developers who previously built Boomerang.

JetFuel’s flagship influencer product, The Plug, offers a self-serve monetization for anyone with an online following and aims to be a comprehensive platform for influencer success. Simultaneously, JetFuel enables advertisers to scale influencer campaigns without time-consuming, manual work. JetFuel operates like a programmatic ad network, allowing advertisers to bid on results and optimize towards downstream metrics. To date, the company has delivered over 60 million app installs to it’s mobile partners and is the only influencer network ever recognized as a leading return on ad spend (ROAS) partner in AppsFlyer’s Performance Index.

Vungle wants to be the trusted guide for growth and engagement, transforming how people discover and experience apps. Mobile app and game developers partner with Vungle to monetize their apps through in-app ad experiences.

Advertisers depend on Vungle to reach, acquire, and retain high-value users worldwide. Vungle’s data-optimized ads run on over a billion unique devices to drive engagement and increase returns for publishers and advertisers ranging from indie studios to powerhouse brands, including Rovio, Pandora, and Microsoft. The company is headquartered in San Francisco and has offices around the world. Bondy said the JetFuel team would move into Vungle’s office when the timing works out.

This acquisition brings Vungle to around 350 employees.

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Lightspin: 46% of AWS S3 buckets could be misconfigured and unsafe

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s3 misconfigurations are big deal

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Cloud misconfigurations expose organizations to significant risk, according to a new analysis of Amazon Web Services (AWS) Simple Storage Service (S3) buckets conducted by Lightspin, a cloud security provider. In-depth research into 40,000 AWS buckets and their cloud storage permissions found that 46% of AWS S3 buckets could be misconfigured and should therefore be considered unsafe, Lightspin said.

Above: A diagram that explains how AWS evaluates access and assigns definitions to objects within S3 buckets.

Image Credit: Lightspin

Misconfigured S3 buckets can open your cloud environment up to a huge amount of risk. Public read access could lead to a data breach, while public write access can launch malware or encrypt data to hold your company ransom.

Certain AWS cloud storage permissions are currently complex and even obtuse, as one of the AWS access options is defined as “Objects can be public.” As AWS evaluates the access permissions of all files at the bucket level, rather than the object level, an object’s ACL is not considered. In short, the definition “Objects can be public” doesn’t allow organizations to definitively understand whether their objects are accessible or not. The diagram above can help to visualize which objects would be given this classification.

Lightspin’s research revealed that more than 40% of AWS S3 buckets have this definition attached, on top of the 4% that are defined as public. As part of this research, the company created a free, open source Python tool that scans the cloud environment in full and clarfies which objects are public and which are not.

Read Lightspin’s full research into the risks of misconfigured S3 buckets.

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Min-Liang Tan interview: Razer’s first AMD gaming laptop, a GaN charger, and 27-inch monitor

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Min-Liang Tan interview: Razer's first AMD gaming laptop, a GaN charger, and 27-inch monitor

Elevate your enterprise data technology and strategy at Transform 2021.


Razer took the wraps off some new products today, including its first-ever gaming laptop with a processor from Advanced Micro Devices. It also unveiled a new charger that uses gallium nitride, or GaN, rather than a traditional silicon-based charger. That makes it smaller and much more power efficient.

I talked to Min-Liang Tan, cofounder, chairman, and CEO of the gaming peripherals maker that has transformed itself into a “global lifestyle brand for gamers.” We discussed Razer’s decision to participate in this year’s online-only Electronic Entertainment Expo (E3) and the products that it’s introducing.

The products include the Razer Blade 14, with an AMD Ryzen 9 5900HX processor and up to an Nvidia GeForce RTX 3080 laptop graphics processing unit (GPU). It has a quad HD 165Hz display, Razer Chroma RGB backlighting, THX Spatial Audio, and Nvidia Max-Q tech. It is only two-thirds of an inch thick. The $1,800-and-up device has two fans, both of which have 88 blades that are 0.1 millimeters thick. Tan called it the most powerful 14-inch gaming laptop.

Above: Min-Liang Tan holds the Razer Blade 14 with an AMD processor and Nvidia GeForce 3080 RTX graphics.

Image Credit: Razer

With the laptop, Razer also announced its first GaN charging device, the Razer USB-C GaN charger for $180. (I wrote about the advantages of low-power GaN chargers here compared to silicon chargers.) It can provide up to 130 watts of power for smartphones or laptops. Tan said in the E3 event that it is “insanely small, insanely powerful.” It is 59% smaller and 17% shorter, small enough to fit in your pocket. It can charge four devices at once.

Lastly, Razer introduced its Razer Raptor 27, a new 27-inch monitor with a 165Hz display and a one-millisecond response time. It has QHD resolution and it has tear-free adaptive sync with both Nvidia G-Sync and AMD Free-Sync Premium. It’s the world’s first THX gaming-certified monitor. It has cable management in the back and it is VESA mount compatible.

Razer recently reported that it hit $1.2 billion in 2020 revenues, up 48% from a year earlier. It also turned a slim profit ahead of plan, and it announced how it wants to become a carbon-neutral sustainable company in the next decade.

Nothing about the past year turned out as expected. The demand for mask manufacturing actually drove Razer to develop a smarter mask for gamers, and it has taken a moment to redesign the new mask it was planning to ship, dubbed Project Hazel. The company closed last year with 123 million user accounts, up 54% from a year earlier. Tan expects further growth in 2021, as he believes that more people are picking up the gaming habit.

We talked about how the nerdiness of gaming transformed into coolness and now is being embraced by the mainstream. Here’s an edited transcript of our interview.

razer charger

Above: Min-Liang Tan shows off the Razer GaN charger, which can charge four devices at once.

Image Credit: Razer

GamesBeat: You haven’t spoken in an E3 program before, right? This is new. Why did it make sense to do it this time?

Min-Liang Tan: We’ve been with E3 for many years, even from the first year we were founded. We had a tiny booth in one of the halls run by one guy, myself, and somebody else. We’ve grown up together with them through the years. But it’s the first time we’ve been part of a keynote.

I’m covering a couple of things. One is how the brand has grown in terms of influence globally in gaming. It’s a huge step for us to be part of the E3 keynote. It’s also a great platform for us to get out there to the public. Last year, when E3 was canceled, everyone was a bit disappointed. What we did last year, we held Razer Con, and we had more than a million concurrent views. That was one thing that spurred a lot of other video game events. We all realized that there’s a huge pent-up demand from gamers who want to know what’s the latest and greatest. This year we’ll do both the E3 keynote, and we’re still going to hold Razer Con, because we see so much demand for that content.

GamesBeat: You also had the DevCon event.

Tan: Yes, but that was more focused on developers. It was very well-attended. Razer has one of the larger gamer ecosystems right now. We have more than 120 million gamers on our platform. We do payment services for gamers. We reach out to them daily. We help game companies acquire and connect to more gamers. Chroma is a smart home ecosystem. We’re seeing a lot of hardware companies and game companies connecting to Chroma. We thought it made sense to have these events to connect with the developers.

GamesBeat: You have flagship projects. I’m curious about the nicknames.

Tan: Nicknames are fun. It’s branched out a lot. We’re not only using favorite characters and things we’ve picked up along the way. But we have a couple of flagship products to announce at E3. We have the Blade 14, which we’re bringing back. It’s a strategic partnership with AMD. We’ve designed what we believe to be the ultimate AMD gaming laptop. We have a GaN charger, which personally I’m quite excited about. It’s going to be a massive hit. Some people say, “It’s just a charger.” But we’ve shrunk it down to less than half size. It might not be as relevant today, but if you travel a lot, you know how annoying it is to carry a big charger. Now we have a really tiny charger. I’m very excited about that.

Razer Blade 14 has a Chroma keyboard.

Above: The Razer Blade 14 has a Chroma keyboard.

Image Credit: Razer

GamesBeat: I spoke to the CEO of Power Integrations, and he explained GaN to me, about the chargers and how much smaller they can make them now. It’s pretty amazing technology. It sounds like that will be much smaller than what you usually have to carry.

Tan: Yeah, it’s super amazing. It’s way smaller, and we’ve packed in a lot more features. We’ve also added another form of charging port to it. It’s combining every single one of your chargers into something ultra-small. It works with Macbooks, with Dell laptops, what-have-you.

GamesBeat: Is this your first generation with AMD?

Tan: For the past 10 years we’ve always been with Intel. Intel still makes phenomenal CPUs, but one thing AMD has done very well in this generation is propelling the CPU to much greater heights. We’ve had a lot of our fan base ask us to make AMD-based laptops. This is the very first one. If you look at the specs, we’ve made it the most powerful and the smallest, which is difficult to do at the same time, with the Blade 14. It’s going to be a benchmark for all other gaming laptops, AMD laptops, moving forward from here. The expectation is that if this does well, we’ll make this a multi-generational product, and we expect it to do well.

It’s not just fast. It’s actually the most powerful AMD-based gaming laptop. It has both an AMD CPU and a 3080 GPU. Typically the ones out there are only 3060 in a 14″ form factor. The second thing is that it’s not just small. It’s actually the smallest. Typically when it gets more powerful, it needs to get bigger. We’ve managed to make it the most powerful 14″ laptop and the thinnest and smallest 14″ laptop. That’s why I think everyone’s so excited about it. It’s a quantum leap over pretty much every other 14″ gaming laptop out there right now.

razer gan

Above: Razer’s Gallium Nitride (GaN) charger.

Image Credit: Razer

GamesBeat: You mentioned two flagships and then other products. Can you explain which is which?

Tan: Well, I’m excited about all of them. But we have the Blade 14, and that by itself is a huge jump ahead. We have a Raptor 27 monitor, a refresh. The monitor is doing very well. We’ve put in a VESA mount. We’ve upgraded the display. The monitors have done incredibly well for us over the last couple of years, and this is the first time we’ve refreshed it. Then we have the GaN charger, and we’re doing an update on Project Hazel for the public, because there have been a lot of queries about Project Hazel, when we’re going to launch. Many countries are still in lockdown or opening and closing a bit, like Singapore. We’re providing an update on the design, some of the feedback we’ve taken.

We’re taking a long time with Hazel, candidly, because we’re doing a lot of certification and testing at the same time. Given that we make medical and surgical masks right now, we’re going through a lot of the same testing that we do with the surgical masks.

The fintech business, the payment processing, that’s grown dramatically through the pandemic. The sustainability side is still something we’re pushing ahead. It’s a big topic for us. Hazel is a part of the sustainability push. Recently we just crossed the 300,000 trees mark. We hope to get to a million trees by the end of the year.

GamesBeat: I’m curious about gamers and sustainability. Do you feel like that was more your corporate leadership that pushed sustainability? Or do you feel like gamers demand it from you?

Tan: We’ve been working on it for many years. I think we were a bit ahead of the curve, because it’s something we care about at Razer. We’ve become a leader in the environment and sustainability side. People look to us. We do investments in different things, offbeat things on that front. I think it’s a bit of both. On one hand, we were pushing sustainability, and on the other hand I think there was an awakening in our userbase about how important sustainability is, what’s going on out there.

razer monitor 2

Above: Razer Raptor 27.

Image Credit: Razer

There’s always that tension internally. People care about GPUs on one end, and you have miners on the other end using up electricity. But there’s a growing acceptance and understanding that sustainability is important. It’s not a big thing about gaming companies. Up front, I think we’re the only guys in the gaming space talking about it all the time. But I hope to see more gaming companies get into this. I expect them to look at sustainability as a big thing for the years to come. Maybe 10 years from now, like what we’ve done with the Blade — we’ve created these new industries along the way. Sustainability, I do think, will be a big talking point.

GamesBeat: What is ready? Is there anything that will be shipping soon that you have this summer?

Tan: The Blade 14 will be shipping. Right at E3, at the end of E3, we’re opening orders for the Blade 14 to ship immediately. The GaN charger we’ll be shipping within 30 days of the announcement, as well as the Raptor. All of them, you can place orders and we’ll be shipping them immediately.

Project Hazel, we’re getting everyone to sign up for it. Something about Razer products, typically every time we open an order, everyone comes in, it sells out immediately, and it leaves a lot of people unhappy. People will go out and scalp it on eBay, all that kind of stuff. One thing we’re doing with Hazel, we’re getting everyone to sign up, and then we’ll pre-inform everyone to do drops. We’re committing to launch it in early Q4.

GamesBeat: It sounds like even though there’s this big semiconductor shortage out there, you’re managing all right.

Tan: We’re also impacted like pretty much everyone else. Well, perhaps to a lesser extent, because historically we’ve always sold the most premium products. Our unit sales tend to be lower, but our revenues tend to be much higher given what we ship. But we’ve definitely been affected on the laptop side of things. On the peripheral side we still do very well. The laptop side, we’ve been impacted a bit, primarily because there’s been a bit of a shortage, and demand is through the roof. We’re trying to catch up with demand for laptops right now.

razer monitor

Above: The Razer Raptor 27 has a one-millisecond response time.

Image Credit: Razer

GamesBeat: As far as where we are in the pandemic cycle, if we had this big hardware boom that happened, I’m curious if you’ve seen a change in the pattern. At least in the U.S., it feels like it’s coming to an end.

Tan: We’ve been tracking this for the past couple of months. We have this gaming platform. We can see gaming activity across different games. We’re unique in the sense that our software platform allows us to see who’s playing, how long they play, and so on. We’ve been tracking the previous months, what’s happening with the markets, and some are opening up somewhat, like China. We realize that it’s trending up. But even as markets open up, the normalized rate is higher than pre-COVID.

I think we’ll see that this is a new norm, where digital entertainment has become so much of a part of everyone’s life. We have even more hardcore gamers now. Great games have come along, like Warzone. Then you have non-gamers in the past who’ve become gamers because of the pandemic. They’re not going to go back to being non-gamers just because life goes back to normal. They may cut down on their amount of gaming, because they’ll have access to different activities again. But the new norm, this has accelerated the growth of gaming quite a bit.

Here’s a bit of context. Prior to the pandemic we looked at double-digit growth. It was very strong. But with the pandemic it went up to triple digits in some cases. Now that it’s come down, we still see high double-digit growth moving forward from here, just because this is the new norm for all of us.

GamesBeat: I saw that IDC did a report on this, at least on mobile. They expected that the engagement levels were going to stay high. Some of it would drop off a bit, but most games will stay at their current levels.

Tan: That’s what we see on our software platform. We have 120 million gamers on the platform, and we still see sustained activity moving forward from here.

razer amd 3

Above: Razer is a lifestyle gaming brand.

Image Credit: Razer

GamesBeat: As far as the keynote goes, do you have a message that goes with the new products?

Tan: It’s primarily the new products. The key message for the AMD gaming laptop is what we’ve done over the past 10 years. Ten years ago we launched what we called the first true gaming laptop. There was a lot of controversy back then, because gaming laptops were thick and heavy. They weren’t really laptops. They were luggables. Exactly 10 years ago, 2011, we launched the first ultra-thin, ultra-powerful gaming laptop and called it a true gaming laptop. I think there was a lot of controversy as people said, “You have to be kidding. Gamers don’t want that.”

But 10 years later, every single gaming laptop is following in the path of the Blade. We’ve created an entire industry. Every single one of the vendors have pivoted across to doing exactly what the Blade is. We still maintain that benchmark. I’m proud of that, given that from a PC gaming perspective, we’ve continued to do incredibly well. We’re straddling mobile gaming and console gaming. The whole gaming lifestyle has come to the fore.

GamesBeat: These laptops are going to be pretty quiet. They used to be quite noisy 10 years ago.

Tan: One big thing that I’m quite proud of and that I’ll talk about, we’re using this next-generation vapor chamber cooling system. Our thermals continue to be the benchmark. The one thing we’ve also done over and above is we’ve redesigned the fan with our vendors. We have fans with 88 fins, ultra-thin blades. We’re talking about 0.1mm. Every blade is the width of a human hair. We’ve been able to bring down the heat and bring down the noise. It’s a revolution, what we’ve done with AMD on this front with the Blade 14.

GamesBeat: Has the desktop market ever looked very interesting to you? Do you see any trends there — anything you would like to do?

Tan: We do very few products at Razer, and we take our time to design them, quite a bit. We’re interested in the desktop market, but at the right time. We have our core ID engineering team, and we polish our products for many years before they get out into the market. We think the gaming desktop market is ripe for a new design from the ground up, but at this point we’re still focused on the laptops.

razer amd 2

Above: Razer Blade 14 and the Razer Raptor 27.

Image Credit: Razer

GamesBeat: Microsoft had an interesting talk with Satya Nadella. He was talking about how they’re all-in on gaming. It’s interesting to hear that from people who are perhaps more above the gaming industry, the platform people, the tech giants. A certain validation comes when people like that pay attention and see that gaming is one of the most attractive markets of all. Do you think there’s a difference emerging here between those mainstream brands and gamer-focused brands?

Tan: Everyone is all in on gaming. Many people call us the Apple of gaming. We have a core, very passionate group of people. There are two consumer tech brands where people get tattoos of the logo. Apple is one of them. We’ve got thousands of people with Razer logo tattoos. Many people ask me when we’re going to go mainstream. I’d say that gaming is already at that cusp.

If you think about the Apple user 40 years ago, 30 years ago, they were a bit different. They were quirky. They were design-focused. The gamer today is still considered, oddly enough, a little quirky, a little different. We have our own subculture with our own language. We have our inside jokes and memes. But I think it’s inevitable. As we keep growing, the mainstream will come to us. Esports is going mainstream. This growth is inevitable. Pretty much every tech company will be all in on gaming one way or the other, whether it’s cloud or accessories or hardware or software. It’s the main form of entertainment for millennial and Gen Z youth. Just because they grow up, it doesn’t mean that’s going to change.

That’s one reason why, as we expand our road map at Razer, we’ve always said that we’re for gamers, by gamers. Not because we’ve changed our products, but because gamers have evolved over the past several years. Gamers 10 years ago are still gamers today. They may be starting families, growing up, building careers, but they’re still gamers. Razer is not going to go mainstream, but the mainstream is going to come to us.

GamesBeat: You can still sometimes tell when the tech giants are pretending to be in love with gaming, though.

Tan: Well, it’s a bit of a start-stop thing. Sometimes it’s frustrating. But it’s not necessarily the tech giants. It’s just the non-endemics who don’t really understand gaming yet. I believe that at some point in time, inside and outside, their executives who are gamers will gravitate toward gaming. We’ve seen that with esports sponsorships, for example. They get excited one year and then the next year they’re gone. It’s the nature of a subculture, an industry which requires a lot of inside knowledge, unless you’re actually playing the games. If you understand that — some people are going to love games or hate games. Even if the guy’s a gamer, he may love this game or hate some other game. That’s just part of the culture.

razer monitor 3

Above: The Razer Raptor 27 runs at 165Hz.

Image Credit: Razer

GamesBeat: Coming back to E3, deciding to double down on E3 as opposed to going off and doing your own thing, was that an easy decision?

Tan: We’re still going to do our own Razer Con. Last year, as I mentioned, we had 1.2 million concurrent views, which made it one of the biggest virtual events of the year. It was massive. Supporting E3 came from a couple of different things. We have so many new products this year that it’s a great opportunity to showcase some of them. That’s one. But second, we want to be able to send the message that gaming is here. Whether it’s a virtual or in-person event, we want to bring that buzz back.

Everyone’s been cooped up a little while too long. Having E3 brings some level of normalcy. I hope that next year we get an in-person event, but I do hope that the virtual side remains. Not everyone can go to E3. But moving forward from here, I think we’ll see hybrid events. Likewise, with Razer Con, we’ll make sure we have hybrid events at the same time.

GamesBeat: One of the benefits of E3 — it used to feel like that was the one week CNN would show up. They would send their camera crews out and expose the world of gaming to a much wider mainstream audience. It’s interesting what kind of calculations the big companies are making now when they decide not to participate, like EA and Activision Blizzard and Sony right now. I don’t quite get the math on that. They can’t beat a billion eyeballs in a week.

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Above: Razer teamed up at AMD for the first time on a gaming laptop.

Image Credit: Razer

Tan: I can’t speak for other companies. But I actually don’t know whether the general press — don’t get me wrong. I have great respect for CNN and so on. But for gamers, because our market has grown so much, we know what publications we go to, what we read. I don’t know if there’s a need for the non-endemic press anymore. They’re the ones trying to get more news about gaming at this point in time. We read things like GamesBeat. We go to the Polygons of the world.

Today, E3 has become more like a gathering of sorts, to showcase stuff. The networking is missing, at least this year. It’s hard to do all that. That’s something I miss, running into everyone sitting there doing their own meetings. All the restaurants are packed every night. Maybe it’s the virtual side of things that has people more concerned. But having that buzz of real life is always going to be a big thing. That’s one reason why we used to hold our Razer Store events, which would gather people along the way. We hope to see that come back.

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