HP to buy Kingston’s gaming unit HyperX for $425 million

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HP has entered into a definitive agreement to acquire HyperX – a gaming division of Kingston Technology for $425 million. HP said that the HyperX buyout will support its plan to grow and expand the company’s Personal Systems business.

However, this HyperX deal will not include Kingston’s DRAM, flash and SSD products for gamers and enthusiasts.

HP sees big opportunities in the peripherals market
Given HyperX’s wide product portfolio, HP is betting big on the gaming and peripherals for its Personal Systems business. HyperX’s gaming peripherals, including headsets, keyboards, mice, mousepads, USB microphones, and console accessories.

“HyperX is a leader in peripherals whose technology is trusted by gamers around the world and we’re thrilled to welcome their outstanding team to the HP family,” said Enrique Lores, President and CEO, HP Inc.

“We see significant opportunities in the large and growing peripherals market and the addition of HyperX to our portfolio will drive new sources of innovation and growth for our business, ” added Lores.

The PC hardware industry plays a major role in the overall PC gaming ecosystem. According to estimates, the PC hardware industry is to be worth around $70 billion by 2023.

While, the global peripherals market will grow over $12 billion by 2024, as per estimates. But gaming peripherals still represent a disproportionate share of this growth.

“HyperX products are designed to meet the most rigorous demands of all gamers – from casual to the most hardcore – giving them a winning edge and helping them stay on top of their game,” said John Tu, Co-Founder and CEO, Kingston.

“Both of our companies thrive because we focus on our employees and share the same core values and culture. David Sun (Co-founder and COO) and I saw the possibilities for the HyperX business and its employees and we both realized that this change brings a brighter future for HyperX,” added Tu.

HP’s HyperX buyout a good decision
Industry analysts and experts have backed HP’s move to acquire HyperX as it will have a significant impact on HP’s business and growth in future.

“HP acquiring HyperX gaming division ( without memory or storage) makes a lot of sense,” Moor Insights & Strategy’s Principal Analyst, Patrick Moorhead tweeted.

Moorhead cited three points in favour of HP’s decision of acquiring HyperX. “PC gaming is growing exponentially and it is being defined more by experiences with PC, software, services, accessories. Accessories (have) much higher margin than base products,” he said in the tweet.

Some key advise for HP
Certainly, these are key drivers for HP to pay $425 million to acquire HyperX not just to strengthen its market position but also make gaming a profitable business. But there are certain rules which the acquiring companies need to follow to make such types of acquisitions successful.

“The key to the long-term success of these types of acquisitions is to create an environment that doesn’t scare off the acquired employees or stifle innovation. And take pieces of the acquired culture you like and permeate the larger company,” Moorhead tweeted on how can HP make this deal a long term success.

HP aims to strengthen the Personal Systems business
Interestingly, the Palo Alto, California-based company is acquiring HyperX for its gaming peripherals to strengthen its Personal Systems business. But it also has its gaming portfolio under the OMEN brand.

The OMEN brand offers hardware, software, content, and services. Also, HP has gaming-specific products like the OMEN 15 gaming laptop and the HP Pavilion Gaming 16 laptop.

More so, the software aspect of HP continues to play a key role in OMEN Gaming Hub, which is the centre point for players to connect, customise and explore their gear and games.

And HP believes that adding HyperX to its broader gaming ecosystem will deliver new experiences to gamers across everything gamers see, hear, and touch.

HP will pay $425 million to acquire HyperX’s gaming peripherals portfolio. This deal is expected to close in Q2 2021 after regulatory review, approvals and other customary closing conditions.

(Image source – Medium)

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