Razer hooks up with Tencent to focus on mobile gaming

Razer is summoning a big gun as it bids to develop its mobile gaming strategy. The Hong Kong-listed company — which sells laptops, smartphones and gaming peripherals — said today it is working with Tencent on a raft of initiatives related to smartphone-based games.

The collaboration will cover hardware, software and services. Some of the objectives include optimizing Tencent games — which include megahit PUBG and Fortnite — for Razer’s smartphones, mobile controllers and its Cortex Android launcher app. The duo also said they may “explore additional monetization opportunities for mobile gaming” which could see Tencent integrate Razer’s services, which include a rewards/loyalty program, in some areas.

The news comes on the same day as Razer’s latest earnings,  which saw annual revenue grow 38 percent to reach $712.4 million. Razer recorded a net loss of $97 million for the year, up from $164 million in 2017.

The big name partnership announcement comes at an opportune time for Razer, which has struggled to convince investors of its business. The company was among a wave of much-championed tech companies to go public in Hong Kong — Razer’s listing raised over $500 million in late 2017 — but its share price has struggled. Razer currently trades at HK$1.44, which is some way down from a HK$3.88 list price and HK$4.58 at the end of its trading day debut. Razer CEO Min Liang Tan has previously lamented a lack of tech savviness within Hong Kong’s public markets despite a flurry of IPOs, which have included names like local services giant Meituan.

Nabbing Tencent, which is one of (if not the) biggest games companies in the world, is a PR coup, but it remains to be seen just what impact the relationship will have at this stage. Subsequent tie-ins, and potentially an investor, would be notable developments and perhaps positive signals that the market is seeking.

Still, Razer CEO Min Liang Tan is bullish about the company’s prospects on mobile.

The company’s Razer smartphones were never designed to be ‘iPhone-killers’ that sold on volume, but there’s still uncertainty around the unit with recent reports suggesting the third-generation phone may have been canceled following some layoffs. (Tan declined to comment on that.)

Mobile is tough — just ask past giants like LG and HTC about that… — and Razer’s phone and gaming-focus was quickly copied by others, including a fairly brazen clone effort from Xiaomi, to make sales particularly challenging. But Liang maintains that, in doing so, Razer created a mobile gaming phone market that didn’t exist before, and ultimately that is more important than shifting its own smartphones.

“Nobody was talking about gaming smartphones [before the Razer phone], without us doing that, the genre would still be perceived as casual gaming,” Tan told TechCrunch in an interview. “Even from day one, it was about creating this new category… we don’t see others as competition.”

With that in mind, he said that this year is about focusing on the software side of Razer’s mobile gaming business.

Tan said Razer “will never” publish games as Tencent and others do, instead, he said that the focus on helping discovery, creating a more immersive experience and tying in other services, which include its Razer Gold loyalty points.

Outside of gaming, Razer is also making a push into payments through a service that operates in Southeast Asia. Fuelled by the acquisition of MOL one year ago, Razer has moved from allowing people to buy credit over-the-counter to launch an e-wallet in two countries, Malaysia and Singapore, as it goes after a slice Southeast Asia’s fintech boom which has attracted non-traditional players that include AirAsia, Grab and Go-Jek among others.