The decline of the PC market and the mediocre effect of mobile phone transformation put Asustek in a dilemma
As the world’s largest motherboard manufacturer at present, Asustek has made great achievements in motherboard business and become a global LEADER in THE PC industry. However, as the digitalization and Internet wave hit one after another, Asustek, like many traditional PC companies, entered the winter of traditional core business. Since 2011, the traditional PC industry began to show a declining trend of varying degrees, until recent years, this situation has not stopped, but intensified.
In January last year, Sina Technology reported that market research firm Gartner released a report showing that global PC shipments fell 2.4% in the first quarter of 2017, with Asustek falling 14%. In addition, according to the agency in the third quarter of 2017 data disclosure, global PC shipments fell 3.6% year on year, and this has been the entire PC industry shipments declined for 12 consecutive quarters. Asustek shipped 4.8 million units in the quarter, down 9%. According to this data, whether it is the global PC market, or asus’s OWN PC business, the development situation is really not optimistic.
Faced with a declining traditional PC industry, Asustek had pinned its hopes on smartphones to find new growth. However, Asus entered the mobile phone industry, but due to a few years behind the market, the development situation is not satisfactory.
At that time, facing the emerging smartphone market, the market pattern had been basically formed when Asustek entered the market, and it was difficult to see a significant increase in mobile phone shipments, thus missing the golden period of market development. Asustek’s ZenFone line, launched in 2014, shipped just 10 million units in August 2017.
In order to find a new breakthrough, Asustek tried to enter the Indian market, but unexpectedly missed the opportunity again. At that time, Samsung and many mobile phone brands in the Mainland had already carved up the Indian market, and Asustek could not find a new entry point. Looking at the current domestic mobile phone market, has not been a few years ago “rush” situation, but into the “oligarchy” era.
Therefore, in the face of the decline of PC market, as well as the current situation of mobile phone business is difficult to break through, Asustek has to conduct business adjustment, in order to find a new breakthrough.
In the middle of last year, asustek was reported to be in the process of large-scale layoffs as part of a business restructuring plan. At the time, Asustek was already streamlining its product line, ditching its personal desktop and smartwatch businesses and shifting more of its corporate focus to corporate desktops and gaming PCS. Therefore, from the business adjustment of Asustek at that time, Asustek actually had a plan for the establishment of a game company.
The prospect of the game is promising and the hardware foundation is supported. Asus has certain advantages in entering the game
As mentioned earlier, asustek’s gaming subsidiary will focus on esports. However, compared with e-sports, which combines the characteristics of technology, entertainment and competition, what is also striking is how successful Asustek is in establishing a game company. Combined with the development prospect of the game industry and the business characteristics of Asustek itself, under the joint promotion of the two factors, Asustek actually has certain advantages in establishing a game company.
First of all, the development prospect of the game industry is promising, and e-sports games are also popular. According to the 2017 China Game Industry Report jointly released by Gamma Data (CNG) and INTERNATIONAL Data Corporation (IDC), the actual sales revenue of the domestic game market increased by 23% year-on-year in 2017, indicating a good development trend of the game market. In addition, data show that the number of users of China’s e-sports market was 170 million in 2016, and it is expected to reach 220 million in 2017. The game-based e-sports games are also attracting the attention of many users, and the e-sports market has great development potential.
Thus, Asustek’s entry into the game market not only shows its optimistic outlook for the development of the game industry, but also reflects its high attention to e-sports games. And asus seems to have made the right move, both in terms of the overall development of gaming in China and the number of esports users.
Second, Asus has its own strengths in gaming hardware. Asustek’s advantage in game volume shipments could help it gain some hardware base to enter the game market. According to a 2016 report by Digitimes, about 160 million laptops were shipped worldwide in 2016, of which 4.5 million were games, with Asus taking the top spot with 1.2 million units sold.
It can be seen from this that Asus games have relatively high recognition in the market, and this high trust has brought certain hardware foundation support for Asus to establish a game company. Asus in particular in the ROG motherboard brand strength, in the hearts of many game players have a certain influence. With the support of these advantages, Asustek is also conducive to quickly establish a position in the game market, and provide strong support for the integration of its ecological chain.
Late entry, lack of operational experience, Asus game road potential disadvantages
Over the past year, the game industry has gone through a series of transformations. From the fierce competition of mobile games, to the rise of esports games led to the high trend of esports live streaming, and now “Eat chicken” games are popular in the entire Internet game market, these changes are all showing a fact that “change” is the invariable truth of the Internet game market. The tuyere of Internet game is always one after another, can seize calculate lucky, can not catch can only wait and see.
Therefore, Asustek’s entry into the game industry undoubtedly shows that it is optimistic about the game market, especially the e-sports industry. But from the whole game industry chain, Asus this entry into the game industry, but also hidden some possible disadvantages.
First, Asus lacks sufficient experience and technical support in the development of game products. Asustek’s CEO previously said that asustek’s esports layout is not only to sell hardware products, but also to build an esports industrial chain and ecosystem. The establishment of the e-sports industry chain includes the development and operation of games. However, in fact, although Asus has a mature hardware technology foundation, it rarely gets involved in the development and operation of games.
In this regard, if Asustek decides to develop its own games in the future, it will undoubtedly enter the game relatively late and lose its first-mover advantage in market competition under the current situation of the game industry in China. And domestic game development companies are now also in the “oligarchy” era, it is not easy for new players to successfully enter the game, there is no user base not to mention, even the game development experience is relatively rare, it can be said that it is difficult to cut a figure in the game market.
On the other hand, if Asustek does not develop its own game products, it may lose part of its voice in the layout of the e-sports field due to the lack of game development genes, and it will be slightly difficult to achieve the goal of establishing the giant e-sports lion. After all, in the layout of esports ecological chain, Asus is equivalent to losing the right to speak in game development, and it is difficult to control how the game market changes.
Second, Asus lacks sufficient experience in the operation of game companies. As for the operation of game companies, Asus, which entered the game a little later, undoubtedly lacks certain experience accumulation. In addition, there are many enterprises in the front of the layout, no matter mobile games or e-sports games, the competition is equally fierce. And just entered the game asus, in the game company’s operation appears a little “immature” some, in the face of a group of “veteran” in the front, Asus will face a lot of difficulties are relatively big.
In a word, although the main business of Establishing a game company of Asustek is focused on the e-sports industry, there are still many unknowns in the overall planning of the layout of the e-sports industry chain due to the lack of sufficient game genes.
Internet tuyere uncertain, Asus into the game development prospects are still unclear
In general, the development of traditional PC industry is declining, so Asustek’s business transformation and expansion is undoubtedly the best choice. But it also learned a lot from its experience in the mobile phone industry at the time, having missed out on the best growth opportunities twice. However, due to the uncertainty of the Internet, the chances of Asus being able to judge correctly and choose the best time to enter the game may not be very good.
Therefore, the success of asustek’s move to set up a game subsidiary in the mainland is actually very uncertain. First, the mainland game market competition is fierce, each segment has a strong opponent; Secondly, the game industry is in flux, and the e-sports field is also in flux. Whether this move is right or not needs facts to speak for itself.
In the future, maybe Asustek will get it right and make a successful entry into the gaming industry. It may take a bit of a tumble, a bit of a turn in the game. However, in the later stage, if Asus can develop games based on the advantages of hardware facilities and product features, it can form a complete game ecological chain, which can not only bring users highly immersive game experience, but also contribute to its game business and become a real power player in the game industry.
More important, of course, is whether Asustek has made the right move to build a gaming company, or it risks repeating its failure to make the same move into mobile. After all, business opportunities are just business opportunities, the key is how to seize business opportunities and maximize their potential; And games are just games after all. The key is how to capture the consumer’s demand for games and successfully integrate the game industry into the market. You can become a power player only if you know your audience well.
Liu Kuang, meditation on the Internet, wechat official account: Liukuang110