Logitech bets on future of E-sports with $150 mouse

LOGITECH International SA unveiled a $150 black computer mouse designed with E-sports exclusively in mind, the clearest signal of the company’s bet on the competitive, flashy and fickle personal-computer gaming industry.

Backed by megahits like Fortnite and competition mainstays like League of Legends and Overwatch, E-sports is at the vanguard of the resurgence in PC gaming. E-sports generated $1.5 billion in revenue last year, according to SuperData, which tracks the industry. Its popularity has also led Logitech’s expansion. Sales in the company’s gaming division increased 57% in the past year, making it Logitech’s fastest-growing and largest division.
The Swiss company spent more than two years, and consulted with over 50 professional gamers, to develop the new G PRO Wireless Gaming Mouse, according to Ujesh Desai, general manager of Logitech gaming. At 80 grams (2.82 ounces), it weighs less than a deck of cards, important for high-level gamers from whom speed is paramount.
“We dug in really deep in the area of E-sports, because we saw that it was quickly going to reach a tipping point and go mainstream,” Desai said.
The introduction Tuesday of the mouse is a remarkable reversal for Logitech’s gaming division. When Chief Executive Officer Bracken Darrell started five years ago there were about four employees left in Logitech’s gaming division. The old management had cut the division from about 125 people in a diversification effort.
“Logitech was a fantastic case of mismanagement” said Torsten Sauter, an analyst at Kepler Cheuvreux. “They really had market dominance in this space and they lost it. They are basically fighting themselves back in to the business, and I think they are doing super well.”
Darrell set out to rebuild the division because of what he saw as a potential demographic windfall. The generation with the highest proportion of E-sports consumers is still young, which means they’re only going to spend more over time, he said in an interview.
“The people who were there at the time didn’t see it,” Darrell said. “E-sports is going to keep growing. It’s blowing away numbers for every sport except the Super Bowl, Formula 1, and FIFA.”
PC gamers aren’t typical consumers. They care about things the normal computer user won’t care about, like the latency on a mouse or the switches in a keyboard’s keys. They care about the experience of opening a product, sometimes as much as they care about what’s inside the box.
So Logitech revamped its gaming line. The boxes were made sleeker. New switches went in the keyboard’s keys, and they developed new, faster wireless mouse technology. Last year they bought Astro Gaming, a popular maker of gaming headsets, for $85 million.
The company started sponsoring some of the biggest E-sports teams, like Team SoloMid, or TSM, and Darrell started attending major gaming championships. They have flown members of TSM to the company’s engineering center in Lausanne, Switzerland, to consult on design, said Andy Dinh, TSM’s owner.
The effort has paid off. Logitech’s gaming division’s sales more than tripled to $492 million in fiscal year 2018 from five years earlier. Today, the gaming division has more than 200 employees, according to Desai.
“Logitech has now positioned itself to exploit the success of E-sports,” said Tom Forte, an analyst at D.A. Davidson. — Bloomberg