The Singaporean technology giant, which sells consumer electronics, gaming hardware, and some services like the Razer Gold digital currency, has historically been focused on hardware.
In its latest earning call, Razer’s chief financial officer Chong Neng Tan said that hardware contributed to 90 per cent of the total revenue of the company, “but going forward, we mentioned we actually see huge opportunities in the Services segment, and that’s where we’re going to reinvest to actually grow our Services segment”.
That move from the physical to the digital is one that Tan says will become a great “dichotomy” in future, between “the user who believes in the digital world and the metaverse … being as real as the physical world” and those that say there is no substitute for the real world.
Metaverse advocates will argue that the digital world is just as “real in inverted commas” as the real world, he continues, a view that will be encouraged by an older generation of ‘digital natives’ – young people who have grown up more comfortable with technology than their ancestors, exacerbated by the coronavirus pandemic and the subsequent increase in digital services.
“Maybe there will be a generation that says the virtual world is actually more important than the physical world. The mind boggles, I think, to the extrapolation of that thought process, but I think it will come to pass”. Tan says that he personally gravitates towards the middle ground.
Tan says that he spends more time in the virtual world than another, and Razer has tools and interfaces to access the virtual world – mice, keyboards, laptops – and payment mechanisms to facilitate the transition.
“As a metaverse kind of company, we are preparing for the metaverse to a certain extent. We’ve got all aspects of the hardware, the software platform, the services, and that’s where we’re really moving toward a real balance between the physical and the virtual worlds”, Tan says.
It is that context which makes Razer’s push towards services understandable, a move similar to Apple’s own transition. The gaming company has 150 million users on its software platform and Razer Gold can be used to purchase games, subscriptions, and more on numerous platforms including Steam, Tinder, Blizzard’s games, Tencent’s games, and more. Razer also has a fintech industry, like a credit card processor. Asked whether, in a ‘gun to the head’ situation, Tan would take Razer down a dedicated hardware route or a software and services path, the CEO chose the latter.
“We could continue to push into the software and services side of things because fundamentally that’s what we’ve been doing from day one … even as we were building our hardware” but added that it’s not about focusing on one area but building up, and that “services has come a little later”.
Unlikely Apple, however, Tan prefers more interoperability to the famed walled garden of the smartphone behemoth. “I think from a gaming from a gamers perspective, we’ve always liked open ecosystems and, you know, we continue to, to ensure that a lot of our software is open to as many people as possible, being whether it’s a hardware company or software company”, he said.
It’s an attitude closer to that of Mark Zuckerberg, who is also making attempts to pivot Facebook into a “metaverse” so that its “software will be everywhere”. With recent demonstrations of virtual working, upcoming AR glasses, and the Oculus VR headset, the social media company does appear in the lead compared to the other members of the ‘Big Five’ – Apple, Google, Amazon, and Microsoft.
Tan, however, says everything is still to play for. “I think there is space enough for any of these big five to create their own [metaverse]”, he says, and while there is an advantage for first movers it is “big enough” that “even a new start-up [could] come along” and disrupt it.
“It’s going to be literally a parallel universe to the physical universe, and we haven’t even tapped what’s possible in the physical universe It’s still growing, new ideas come out, and we’re going to see that in the virtual universe”.
Many technology companies paint the metaverse as a benevolent way to overcome socioeconomic barriers of the physical world. “Research … shows that the zip code in which you were born and raised is highly correlated with your future mobility and what your income is going to be”, Mr Zuckerberg has said. “I think that that just goes against the sense that we have in this country that people should have equal opportunity.”
Critics, however, point out that the origins of the metaverse is Neal Stephenson’s 1992 Snow Crash, which paints it as “a poor, desperate nation that is literally governed by corporate franchises”, Vice’s Brian Merchant writes.
“In the world of Snow Crash, the metaverse is not viewed as particularly cool—it is necessary, because the real world has become so unbearable.”
Merchant also highlights that the development of a new reality could also be a way to protect against criticism for tech giants’ failings in the current one, especially as the wealth of Jeff Bezos, Bill Gates, Mark Zuckerberg, Larry Page, and Elon Musk increased massively in a pandemic that forced more people online. It is likely to increase further with the development of metaverses.
The debate between the value of the real world and the digital one, Tan believes, is unlikely to be solved. “In the future, the guys who think the physical world’s more important are going to say everyone else … in the virtual world [has] something’s wrong with them, and vice versa.”
But as for which side of the aisle Tan, Singapore’s youngest ‘self-made’ billionaire, falls, the CEO fields this question with a vague answer that sceptics of tech executives’ vast wealth might find ironic.
“Everything in moderation,” he says. “Who’s to say what’s right or wrong?”