Logitech has sold more keyboards and mice over its 36-year-history than any other company, but a lot of those hardly got a second thought, connected to boring beige boxes in countless offices and homes.
Five years into current chief executive Bracken Darrell’s tenure, the old-school Swiss peripheral maker now has a $300 million business selling high-performance accessories to gamers, now its third-largest product segment. That’s slightly smaller than the total revenue of competitor Razer, which just made a splash in its Hong Kong IPO.
Quartz spoke with Darrell at the Web Summit conference in Lisbon to find out how Logitech went from staid supplier of accessories to hip purveyor of digital pro-gaming gear. The conversation has been edited and condensed.
Quartz: How did you end up getting up to speed about professional gaming?
Bracken Darrell: I had the biggest advantage there is, which is kids. Before I came here, Logitech had reduced the investment in gaming. We always made mice and keyboards, and our products were used for gaming forever, from very early days, even in the ’90s, but for some reason the management at the time, they really pulled back. My kids-I have two boys and a girl- said, ‘wow, Logitech had such a good opportunity but it looked like they stopped doing good products for gaming.’
How old were they then?
My kids were 18, 16, and 13. The 18 and 13-year-old were really serious gamers. So I came in and immediately one of the first things I did, I reduced the resource on the PC peripheral side, the productivity stuff, and I moved a bunch of resources into gaming and we immediately started developing products for gaming again.
And then we got very focused on e-sports. It was a natural and logical extension. We started developing products with e-sports teams like Cloud 9 and TSM-actually I’m here with Andy Dinh from TSM-and so we just got more and more into it. We have a team of such avid hardcore gamers that you couldn’t help but be in the middle of where the action is, which is e-sports. Especially League of Legends and CS:Go.
Has getting into e-sports changed Logitech’s culture in any way?
First of all, at that same time we also started going into other categories. We entered Bluetooth speakers through Ultimate Ears-that Red Bull can-like product. We entered video conferencing, which really was an enterprise business. We started going into different businesses, but every time we did it, we set up a completely separate team run by someone who is a passionate advocate for it. So the guy I put in charge of our gaming business was a guy from Nvidia, who had been running gaming for Nvidia, so he was deeply in it. And then we already had people in the company who were perennial hardcore technology people, or game advocates, and then we kept adding.
How big is your gaming team?
We don’t disclose numbers like that, but it’s big. If you walk in there you feel like you’re in somebody’s basement. Laughs It’s dark. There’s a lot of neon lights.
What are your thoughts on Razer’s IPO?
We love competition, we love our competitors, Razer has certainly been a great competitor. Without competition you don’t get as much attention, so we love the fact that they’re now going public. In a way, it’s a really good thing, it just brings more exposure to the business.
Remember, we started out as a technology company in the PC peripherals space, so we are very invested in technologies, so we will keep doing that-to try to make gaming a better experience. And we’re also very invested in design, so comfort and some of those things that a lot of people don’t totally get in gaming. Comfort is such a big deal, so we like the fact that they’re trying to push us and we gotta be better, so it’s good.
Gaming peripherals designed by Razer have a certain look to them. Do you think they have captured the aesthetic of this industry?
I guess I have two answers to that. Our gaming products have a different look-they’re a little edgier than anything else we do. They’re more playful, and I think that comes from the products. But in the end, I’ve never been a big believer in “design language” because I think you build the best product you possibly can for the user in that category you’re building for. I don’t think they’ll all look the same, but I think you’ll see some similarity.
How do you guard against injuries from gaming while using your products?
I mentioned comfort, and I think ergonomics and comfort are the big ones. One of the things we try to do, for example in our mice, you’ll notice if you go through our lineup, we don’t have one structure to a mouse. Some people like some structures, some people like the other one, and you know, injuries happen in every sport.
Are there guidelines on usage that you communicate to users?
I have to say it’s remarkable to me, first of all, how few injuries there are-at least that we hear about in that field. Given the number of hours people are playing. On the extreme end, the number of hours are really daunting. But it’s interesting, you don’t have a lot of injury.
If you think about it, a mouse or a keyboard is super ergonomic, because the amount of motion, the range of motion, is very, very limited. In a keyboard, you’re not using the full keyboard while gaming, so it’s a very limited range of motion. So you’re more likely to get injured with repetitive motion injury here gestures to me, typing than a gamer is.
Gathered for some serious thumb twiddling.
Can you explain how the gaming peripherals business fits in the e-sports industry? How do all the pieces go together?
If you grew up in my generation, it’s a little bit like the NBA or college basketball. The average person watched the NBA or watched good college basketball and then would go out and play on the weekends, or even play some organized sports. And that’s where gaming is going. You’ve got the real pros, who are obviously gifted and they spend a tremendous amount of time developing themselves. People like Faker who plays League of Legends in Korea. These guys are obviously a different level than almost anybody. And everybody enjoys watching that.
But then the cool thing about it is that everybody can play, it’s a very accessible sport, all you need is a PC. Anybody can afford the peripherals for it, and anybody can have a PC, so anybody can play. It’s not quite as inexpensive, but it’s a little bit like soccer, where all you need is a ball and two people, you know. All you need is a PC and yourself. If you wanted to invest in it-of course, we love when people do-and get better and better equipment, you can do it. So it can also become like cycling, where you can really invest and build the best thing.
There’s now a proliferation of voice assistants, virtual reality headsets, and augmented reality devices. Are we in a moment of fluidity in user interfaces?
I think there there’s always been a bounce back and forth between different user interfaces. It’s kind of the same thing as computing devices, which is every new thing you add, something doesn’t go away-it’s on top. When phones came out, they didn’t replace computers, in fact you used the computer almost the same number of hours today as you did 15 years ago, but you use your phone on top of that for tremendous amounts of time, or a tablet. So the same thing so far is happening in user interfaces.
When you add voice, and I’m sure eye-tracking will come into this, you’re still using a keyboard and a mouse, because when you sit back at a desk, you’re not going to say, “put me in cell 7F”, so there’s a role for all these things. So you used the right word to me, which is “fluidity”, which is how do we make all this super fluid, how do you make it really easy and seamless?
|Product segment||2017 revenue|
|Pointing devices||$501.6 million|
|Keyboards and combos||480.3|
|Source: Logitech 2017 annual report|
What do you think about voice interfaces?
We love it, it’s been great for us. The personal assistant space has been very interesting. We’ve integrated our Harmony remote controls with Alexa and Google Home, so you can operate your TV or any legacy device you’ve got in your living room using your voice. We launched Bluetooth speakers now that are not only Bluetooth, they are also Wi-fi, so you can take them in and out of the home, bring them in and out of the Wi-Fi network; they’re Alexa enabled, so you can take Alexa out to the pool, or take it to the car.
We see our business as, we’re not peripheralizing PCs anymore, we’re peripheralizing cloud services. Obviously, personal assistants are a huge cloud service.
What about AR and VR? Is that an area Logitech can enter?
Yes. It’s one of the very few seeds, or new categories, that we’ve talked about publicly. So we’ve been working on that for two and a half years, we’re very interested in mixed reality, augmented reality, virtual reality. And we think that’s going to develop a whole new range of things we can do. We’re kind of testing the waters to figure out what we can do.
We quietly launched a developer kit for a way to integrate a keyboard into a HTC Vive VR headset. We’re not launching that, it’s just to see if developers can do things with it. When you talk about gaming, you can’t imagine needing a keyboard in a virtual reality world; but in a world where you’re doing productivity work, some people need a keyboard, so we believe that’s one of the tools. That’s one of the side projects we’re working on.
E-sports are particularly big in Asia. How important is that region to Logitech?
We’ve been there 25-plus years. We have a great business in China, and we have a great gaming business in China. If you ask me what will be the biggest region for the company one day, it’ll be Asia for sure.
It seems to be easier for an international firm to be a hardware business in China instead of a search engine or social network.
It’s true, and we’re trying to think of ourselves as a Chinese company in China. We just started to build a small team in China trying to create new categories for China, not for the rest of the world.
What sorts of products?
It could be anything, we don’t disclose these. But my general view is, some of the top innovation in the world is now moving to China, so rather than sit out and wait for it to come out of China and go to the rest of the world, I’d rather be doing the same thing in China for China, where innovation’s happening. We’ll be a Chinese company.