Business of Esports TV: The Gaming Chair Market

(Podcast #131)

In this segment, we discuss Herman Miller cornering the luxury gaming chair market.

The Business Of Esports brings you news, debates, and all the information you need to know about the gaming sector, the world’s fastest-growing market. With Paul “The Profit” Dawalibi leading the charge, and a variety of special guests, BoE TV is the only place to find insider information on the esports industry!

Check out the full podcast here:

Paul Dawalibi 41:24
William, let’s, let’s talk about a story that you know, we talked a little bit we’ve talked about this multiple times before. Yep. And a big segment of the gaming market seems to be like from a business standpoint. Yeah. Gaming chairs.

William Collis 42:30
Yes.

Paul Dawalibi 42:31
Come up multiple times. You know, we’ve had we’ve had Matt Hellman who like was who created Mavericks chairs like we’ve had even guests on the podcast centered around a gaming chairs. And, and so then I see this story in high snub high snob, I can’t even pronounce it. I snuck by it calm. And and the headline here is Herman Miller has quietly cornered the luxury gaming chair market and, and it’s an interview. Okay, it’s a white paper or an interview with john Campbell, who’s director of gaming at Herman Miller. And what’s interesting is they talk about their Aeron chair, the collaboration with Logitech, etc. And, and I think what’s interesting is the title here is so fascinating that in an in a nascent market, like gaming, growing market, like gaming, where if you look at gaming chairs, in sort of that mid segment, call it $500. And under, right, there are probably a dozen, at least manufacturers of gaming chairs that we could point to that are all doing well, right all have very sustainable businesses in the space. But when you look at the high end, there’s literally nothing there except Herman Miller. And there, they’ve managed to consume all the oxygen, all the mindshare around high end gaming. And I’m curious, like, why you think that is? And and do we think this high end of gaming furniture, let’s call it in general, is now like, a market that is impossible to break into as a consequence? Like, I’m curious how you feel about it, especially in the context of Herman Miller being not like an avant garde, you know, gaming brand, either. This is like a furniture studio that was founded in 1905. Huh.

Unknown Speaker 44:34
Like,

Unknown Speaker 44:36
the thing.

William Collis 44:38
The thing to say here is, I wonder if this is there’s a simple argument to discuss. I wonder if it’s the case of quality wins. You know what I mean? Like, this is a market that’s won by quality, because you’ve always said, so consistently, Paul, and I it’s really you I take the lead from that Herman Miller’s just the best Nobody can touch them. And you know, don’t even think that you stand a chance because Herman Miller is the future. And

Paul Dawalibi 45:07
I have to I’m sitting on one and I have another one. Right, right here.

William Collis 45:12
And, and, yeah, it’s, it’s like, yeah, and and this might be a case of look like, you use your gaming chair a lot, right, like a lot, right? And you’re probably a pretty good judge of if your chair is comfortable or not, you know what I mean? Like you? Could this just be a simple scenario of luck. Like, you have a very educated consumer base that’s able to discern quality. You have a case where the manufacturer has so much experience doing really comfy chairs, like that, fundamentally, there’s strong crossover between office and gaming, right, so they have a big quality advantage out of the gate. Like, is it not just the market solves itself then? And that’s a win. And I’m not trying to disparage other gaming chairs. I don’t know. I mean, but I I definitely get the sense at least from you that Herman Miller is just so far in a way above everyone else, right.

Paul Dawalibi 46:03
I think what’s interesting to me is they Yes, but I think they’ve bucked the trend in marketing in this space, which has been like, you know, we got to get courage and valparai to sit in the chair and then we have to run ads on Twitch and yeah, we got to hold him like,

William Collis 46:20
tournament like the lemon dragon chair, like it’s like,

Paul Dawalibi 46:26
and you know, the latest like valorant tournament sponsored by Herman Miller. And, you know, like, and yes, they’ve done you know, marketing with some key partners. I think they, you know, they did all the, I think it was Team Liquid in their facility, whatever, that they got their chairs, you know, and they partnered with Logitech so there was that but it hasn’t been like the kind of flashy big influencer big tournament big. You know, they weren’t cool air dropping Herman Miller chairs into the League of Legends finals. See

William Collis 46:59
what I mean? Like, yeah, yeah. Yeah.

Paul Dawalibi 47:02
Is there some is there some takeaway from that? But, you know, maybe the the way, everyone sort of thinks we need to reach gamers, well, is maybe not entirely the only way at least,

William Collis 47:14
it’s interesting, because a few people have said to me over the years, and I’m gonna paraphrase here, but something to the effect of everybody thinks gaming is a marketing driven industry. And it’s the exact opposite. Right? In and I think this is a really like, those comments are kind of sweet, because they’ve been people I’ve respected who’ve basically said that, and they point to all the pageantry, right, like, all the performance, all the stuff you’re talking about, like, you know, the ridiculous sponsorships and everything. And that is such high visibility. People believe that that drives, you know, but but that, you know, what the people said to me, again, you sort of paraphrasing here is, the reality is, gamers know what they like, and gamers are smart people with strong tastes. And you can’t like, this isn’t a group where like, you can mark it, it’s not like marketing and cleaning wipes. And like, is one white really better than the other? You know, like, it’s basically brand awareness and what shut what’s at eye level in the store? You know, what I mean? This is a case where like, like, if I tell you any game, let’s use games, an example cuz it was like, you have a very strong opinion about it, right? If I tell you, hey, Paul, let’s go play valorant you’re going to be tugging me to play Apex legends right away, and you’re going to be like, and every gamer is like that. And that level of knowledge doesn’t need to stop at the games themselves. It can go far, far deeper than that, right? I mean, even with you think about when we did the audio setup for this podcast, we were like, y’all don’t buy that mic that make this trash. You know what I mean? You got to do this. And like, there’s a real expertise and knowledge and domain expertise that gamers really have. And again, because gamers really do use the things they’re purchasing, like keyboards, mice, all of this stuff. And they’re Cognizant, like you have such immediate loops in gaming of your own performance. Like they have a very strong sense of what works and what doesn’t. And so, the argument I’d have here would be, you know, sort of so if you take that as a view, yeah, maybe what these people are telling me, you know, sort of paraphrase over the years is true is like, you can do all this marketing, and it can buy you some short term traction, it can certainly do things like create categories, like let’s be honest, I think it took marketing to convince people that gaming chair should be a thing, right? Like, I don’t think we would have gotten there. But at the end of the day, because you’re dealing with an educated consumer, the quality factor wins, if you have the best product, as long as you do enough to put that product in a consumers consideration set. That’s all you need to do, because the consumer will take care of it themselves. Right? I don’t know. It’s interesting, but

Paul Dawalibi 49:41
it is an interesting thought. And it’s, it’s like to me, I see multiple trends sort of converging with this Herman Miller story, right, which is, you see, call it older, more traditional brands, dipping their toes into gaming doing like, x y, z for gamers, right? The same way. Herman Miller did the mid chair which I have, you know, the original and I have the gaming the Logitech one behind me. Right. They did this, this version for gamers. Yeah. But also, they’ve hung on to sort of their more traditional Herman Miller, obviously quality but marketing as well, right. It’s not like Herman Miller was never the flashy marketer, in general, right? Like, you know, people who knew the brand love the brand bought the brand, but it’s not like they were running Superbowl ads, or, you know, like, it just wasn’t, it was not their DNA as a company. And so I see these trends of like, you’re right, they’re like, very authentic, kind of appealing to an educated gaming consumer, but also this sort of parallel path of like, traditional brands making stuff for gamers. And I think the brands that figure out sort of the balance between the four gamer while still maintaining what made their brands, you know, successful or special in the first place, because they are the ones who are gonna win.

William Collis 51:02
The various inventor Herman Miller is they did not rip off the Herman Miller branding, right. Like I yeah, I, you know, I and I think I even said it was a mistake at the time, I thought they needed to have a new brand, because and they could put a powered by Herman Miller, or from the makers of him or whatever on it to create the, you know, the lineage, but I thought it was a mistake, but again,

Unknown Speaker 51:23
and again, like,

William Collis 51:24
I mean, almost, that underscores the whole point, like if I were going to pitch you in a VC meeting, hey, you know, I’m going to give you an awesome, you know, gaming chair here, and the competitors are called dx racer. And like, I don’t know, what’s another one like Aurora, and like, you know, and mine’s gonna be called

Paul Dawalibi 51:41
Titan Titan lab. Yeah.

William Collis 51:43
Mine’s gonna be called Herman. Like, you’d be like, what? And I’d be like, no, it’s great. And people are going to associate it with office furniture. And you’d be like, you’re done. Get out of here, leave. But you know, all that says, I can’t believe I still stand by I can’t wait. Those weren’t drags on the business. I can’t believe those weren’t drags. Because if they had an inferior product quality, and it was called Herman and your first association was an office, you wouldn’t buy that chair either. It must be something to do with the underlying fundamentals of the comfort of the chair.