Huge Loss for the Gaming World? HP Absorbs HyperX
So it’s official – HyperX is under full control of HP management, which makes me nervous for the future of one of the most recognizable names in gaming.
Why is that? Well, HP has failed to gain a noticeable foothold in the gaming arena – despite their attempts with headsets, mice and keyboards. What, you’ve never heard of HP gaming accessories[1]? Not surprising. I mean who equates gaming gear with HP? Nobody I know of. So they do what big companies do best after a “perceived failure”? They buy a successful company, try to fold them in – and eventually kill them off. You can find loads of examples just in HP’s list of acquisitions[2].
Here’s the bit from the press release that’s really telling: HyperX will be run under HP‘s “Personal Systems business” (or PSG – Personal Systems Group). For me, this is cause for concern.
When HyperX was with Kingston, they were given the freedom to make their own rules that made sense for their market; branding included. There were of course synergies like leveraging Kingston‘s manufacturing prowess in memory chips and storage, and the legal small print “©Kingston Technologies”.
But that was the extent of it. Kingston did well to understand the importance of brand autonomy.
HP on the other hand has an unappetizing habit of pigeon-holing every acquisition into some part of its existing line. As stated in the press release, this process has already started with HyperX being thrown into their existing PSG line to “drive growth in its Personal Systems business.”[3] The problem here is that the guy running PSG already has plans for the various groups he runs from business to consumer PCs and handhelds. Now he’s got to figure out how this new company is going to benefit his existing product portfolio as a whole.
It all makes sense from a management perspective, but from that point of view, how likely are the chances that HyperX is left alone to keep the pulse on the gaming world? Not very likely at all – though there’s the smallest glimmer of hope if he’s a gamer himself (come on, it’s possible; most engineers I knew played games in their university years.)
Also, let’s not forget that HP killed off Compaq, Palm, and a host of other companies they acquired, all of them with big brand recognition in their day. But every single one was eventually killed off to conform to the “HP way”. Some weren’t killed off immediately – remember Voodoo PC? It was the Alienware or Razer of its day, and it too eventually died (slowly but surely; they let it live for about 8 years) before morphing it into their Omen brand.
Having worked at a Fortune 5 company that’s dealt with American HP execs, I feel a very high likelyhood for the above to happen. But I really hope I’m wrong. And I mean it when I say that I like the folks at HyperX and what the brand represents. They have great name recognition in e-sports and the gaming world with products that seem to be in sync with what the community wants.
But if the “I know best” thought process of HP’s managers is still prevalent (even if they have no idea what they’re doing – which I’ve experienced, smh), the end results will not be pretty.
Alas, at the end of the day, this is just my own personal analysis and opinion. But I’ll call it as I see it.
Full press release below:
HP Inc. Completes Acquisition of HyperX
PALO ALTO, Calif., June 1, 2021 – HP Inc. (NYSE: HPQ) today announced the completion of its acquisition of HyperX, the gaming division of Kingston Technology Company.
The acquisition supports HP’s strategy to drive growth in its [3]^Personal Systems business, where gaming and peripherals are attractive segments.
“We are delighted to officially welcome the incredible people of HyperX to HP. HyperX has built a loyal following among gamers and we look forward to further strengthening the HyperX brand,” said Alex Cho, president, Personal Systems, HP Inc. “This acquisition further advances our ability to create the compute experiences of the future, expand into valuable adjacencies, and unlock new sources of growth.”
HyperX’s award-winning product portfolio spans a range of gaming peripherals, including headsets, keyboards, mice, mouse pads, USB microphones, and console accessories.
As previously announced, the purchase price of the transaction was $425 million. The acquisition is expected to be accretive on a non-GAAP basis to HP in the first full year following closing.
About HP
HP Inc. creates technology that makes life better for everyone, everywhere. Through our product and service portfolio of personal systems, printers, and 3D printing solutions, we engineer experiences that amaze. More information about HP Inc. is available at http://www.hp.com.
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More Info: https://press.hp.com/us/en/press-releases/2021/hp-inc-completes-acquisition-of-hyperx.html
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