Global gaming company Razer has exceeded predictions with a record-high revenue of USD 447.5 million in the first six months of 2020, securing strong year-on-year growth of 25.3%, according to their financial results released yesterday.
A leading global lifestyle brand, the Singaporean-based company has developed a loyal consumer base within the gaming and e-sports community. As of June 2020, revenue on a year-to-year basis for its hardware products increased by 26.0% to USD 382.7 million, while user accounts for its software rose by 42.8% to approximately 100 million monthly active users.
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Razer co-founder and CEO Min-Lian Tan credited its impressive performance to the COVID-19 pandemic, which has caused many to stay home. “Razer has had a spectacular start to the year, driven by dominant brand position, user base expansion and stay-at-home trends”, says Tan.
With e-sports also gaining momentum due to widespread cancellation of physical events, the pandemic has positioned Razer well to capture growth opportunities despite challenging economic conditions. “The fundamentals of our business remain as solid as ever, thanks to our entrenched brand leadership, compelling offerings across hardware, software and services and strong execution” he adds.
Fuelled by cost-efficient improvements and increases in service contribution, the company continues on its upward trajectory, recording positive adjusted EBITDA of USD 3.2 million and gross profit margins of 22.0%.
Similarly, Chinese competitor Tencent delivered very encouraging results in its second financial quarter, with one of its fastest revenue-growing quarters in two years. Online gaming was one of its best-performing segments, with a reported revenue growth of 40%.
Razer remains confident in its outlook for the remainder of the year, with its ecosystem expected to continue growing, driven by “exponential growth in software user metrics and phenomenal growth of services”.
In addition to its e-sports and gaming hardware arms, Razer hopes to continue to expand the scope of its existing FinTech services. The company’s subsidiary Sea Ltd is currently one of the 14 candidates shortlisted in a bid for one of five digital banking licenses to be granted by the Monetary Authority of Singapore (MAS) later this year, according to Vulcan Post.
The licence would allow Razer Fintech to offer digital banking services to youths and millennials that are currently underserved by traditional financial institutions. “If we get the digital banking licence, we should be able to pivot very quickly from just being a digital payments business to running a digital banking platform” Chief Strategy Officer Lee Li Meng commented.