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Volume 22 No. 35
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Company Watch: HyperX

HyperX gets active in esports, leverages host of crossover stars

From the moment esports started filling arenas, the sports industry has watched carefully for signs of commitment from traditional non-endemic sponsors, believing the brand crossover would indicate true staying power.

That’s happening gradually, but one of the most aggressive attempts at jumping the cultural gap between video games and traditional sports is coming from the reverse direction. Meet HyperX, a maker of computer equipment that’s leveraging the video game boom to find new buyers among traditional sports fans, casual video game players and anyone else wanting high-end electronics.

First launched in 2002, HyperX is the high-performance gaming division of Kingston Technology, an Orange County-based, privately held hardware maker. Kingston books more than $6 billion in annual sales but has mostly steered clear of sports in its three-decade history. Now, it’s spending heavily in a sports-style sponsorship portfolio.

“We’ve built this reputation as endemic to the PC gaming space and to the overall esports community, but our next real big venture is for being known for all things good in gaming,” said Dan Kelley, corporate marketing director, who joined in 2015.

HyperX uses a cadre of compelling stars to push its gaming products, from JuJu Smith-Schuster to Post Malone.
Photo: image courtesy of hyperx

The first HyperX-branded products appeared in 2002; they were memory devices that help your PC move faster in high-demand situations. But in 2014, HyperX launched a gaming headset, dropped the “Kingston” from the logo and went to work developing a full line of peripherals — mice, mouse pads, keyboards and the memory-assisting devices.

It quickly went to work developing a big roster of esports teams, for which it supplies tools that the stars literally touch for 12 hours a day. But its creative use of people from other walks of life who love gaming makes it stand apart. Brand ambassadors include young pro athletes like the Pittsburgh Steelers’ JuJu Smith-Schuster, the Boston Celtics’ Gordon Hayward and the Sacramento Kings’ De’Aaron Fox. More recently, it signed recording artist Post Malone.

In January, it launched a major campaign called “We’re All Gamers” and acquired presenting rights to ESPN’s “NBA Saturday Primetime on ABC” to boost the effort. The campaign stars Smith-Schuster, Hayward, Fox and others alongside gamer-streamers “Shroud,” “Rush” and “Pokimane.” The endorsers have been chosen for their ability to help bridge the cultural divide.

“We’ve been really seeking out these unique individuals who are really from one of two worlds, but they can advocate for and respect other worlds,” Kelley said.

If successful, the branding push will open up a much larger market. Esports — world-class gamers playing as teams under contract with teams in organized leagues — is still a niche industry, with global revenue around $1 billion. But video games, inclusive of everything from the League of Legends World Championship to your grandmother’s solitaire, is a $100 billion industry.

HyperX

The high-performance gaming division of Kingston Technology

Founded: 2002 as a gaming and overclocking memory brand; 2014, shipped first gaming headset and fully separated the brand from Kingston.

U.S. headquarters: Fountain Valley, Calif.

No. of employees: 250

What They Do: Manufacture and market a line of premium computer peripherals designed for gaming, including headsets, keyboards, mouse pads, mice and memory enhancement devices.

Key executives

Mark Leathem
HyperX general manager

Dan Kelley
Director of HyperX corporate marketing

John Tu
Kingston co-founder and president

David Sun
Kingston co-founder and COO

HyperX’s sponsored properties are also eager to play well to both worlds, and see the brand as offering strategic positioning along with fees. In 2018, HyperX bought the naming rights to the HyperX Esports Arena Las Vegas, a deal that puts the HyperX logo on the Luxor Hotel & Casino’s pyramid on the Las Vegas Strip, perhaps the most prominent physical asset in all of esports.

Arena owner Allied Esports was always looking for an endemic brand to take the naming rights, said CEO Jud Hannigan, believing that credibility with the core fan base was critically important when building the arena in such a mainstream location. But through its crossover cultural ambassadors, Hannigan said, HyperX now also plays to Peoria.

“It’s bigger than just gaming, it’s more lifestyle,” Hannigan said. “We’re now able to do exciting things with that pool of talent HyperX is signed with. That’s powerful for us, not only on the property side of the business but also on the event side of the business.”

Fox’s marketing agent, Catalyst Sports & Media vice president Brandon Curran, said the HyperX association helps convey to gamers that Fox is not merely a pro basketball player who enjoys the occasional video game.

“The gaming community is very discerning. They say, ‘OK, this has been my passion for my life and now it’s finally cool so all these brands get involved,’ so they’re always wary of what they view as outsider,” Curran said. “What they see from De’Aaron, from his passion for ‘Call of Duty’ from literally 2007, and all the Dragon Ball Zs, and how he styles his hair, they say, ‘OK, this guy is legitimately a gamer.’”

Fox has the second-most YouTube subscribers in the NBA, behind only Kevin Durant, a number driven by gamers as much as basketball fans.

The “Fortnite” phenomenon gave HyperX’s attempts to go mainstream a huge boost, Kelley acknowledged. Fortnite’s cartoony, casual feel and strong connection with non-competitive gaming streamers such as Tyler “Ninja” Blevins has boosted a general gaming culture more than it has the elite competition circuits. “That’s certainly helped this endeavor,” Kelley said.

While careful not to suggest HyperX has equaled Nike’s success, Kelley mentions the shoemaker as the inspiration for what he hopes to accomplish: become a lifestyle brand while not losing the connection with its core users.

It will get harder soon, though. Esports teams and gaming personalities are many times more expensive than they used to be; keeping its current level of coverage will cost much more to renew. Also, Kingston’s period of “over-investing” in the HyperX division is coming to a close and the brand’s budget growth will need to be justified by business growth, Kelley said.

“Now we’re in the turn, if you will, toward becoming a lot bigger entity within Kingston, and a lot of that is focused on long-term viability and profitability,” he said.

For more coverage of the business of esports, visit our partners, esportsobserver.com.