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The PC industry isn’t faring too well at the moment as it recently suffered one of the worst declines on record (opens in new tab). Though many will see the decline as a return to normalcy after the pandemic boom years, there are some serious headwinds. Corsair, one of the best-known names in the PC gaming industry, isn’t immune. It’s expecting a preliminary unaudited loss between $10 million to $11 million for the quarter ended June 30, 2022.
Andy Paul, chief executive officer of Corsair, via a press release (opens in new tab), said, “The first half of the year has been a challenging time, as we expected, with macroeconomic headwinds affecting consumer spending on gaming gear, especially in Europe. This has caused a build-up of inventory both in our warehouses as well as in the retail channel, thus causing our channel partners to delay ordering while they clear this excess.”
Excess inventory levels are a worry. Much of Corsair's product portfolio lies outside of the core PC and in times of economic hardship and slower PC sales, gaming peripherals are an area that’s going to suffer more than most. A good mouse or keyboard from five years ago is still a good one today.
Paul goes on to talk about how he expects the gaming PC market to bounce back towards the end of the year when new GPUs and CPU launch, leading to a fresh round of upgrading. He expects this trend to continue in 2023 as mainstream parts are launched.
Corsair’s Amazon Prime day sales were positive, according to Paul. Corsair will release its full second quarter results on August 4, 2022. It will discuss its financial outlook for the year ahead. As a gaming focused company, its forecast could prove illuminating for the wider market.
After the massive growth work from home related PC sales, there was always going to be a post bubble decline. The gaming market is waiting for next generation products. This will surely benefit Corsair, as more powerful cards require higher wattage power supplies. Corsair’s DDR5 sales can only increase once the DDR5 only Zen 4 launches, and new systems need cases to house them too.
The outlook for the peripheral market is less certain. Corsair’s biggest problem might be its competition. The gaming market is very crowded. Products such as keyboards, mice and headsets are widely available and they are often carried over two or more upgrade cycles.
As ongoing pandemic related disruptions and inflation pressures take hold, not to mention the effects of the Ukraine war, discretionary buys like a new mouse or keyboard are ones that are likely to be put aside once money becomes tight. Corsair will be hoping that the global economy pushes upward and that new systems include plenty of Corsair gear. It won’t want to experience losses for any longer than it has to.
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