Three years ago, the company made a strategic decision to shift its focus towards creation of high-value products for passionate, hard-core consumers. This shift has not happened overnight and is still ongoing. Initial success was evident in growing sales of our high-end Saitek flight simulation products, and more recently is demonstrated by a widely acclaimed Cyborg PC and Mac products, as well as our Tritton premium audio products. Each of these three brands generated sales growth in fiscal 2012. In particular, the sale of Cyborg products grew 40% to $19 million in net sales, and the sales of Tritton products grew 48% to $37 million in net sales. Total audio product net sales of $45 million accounted for over 38% of net sales, just shy of the 40% to 50% target for the fiscal 2012.

We also believe these high-end products have much longer product life spans and that the best way forward is we’ll reach a transition in the video game industry with casual gamers moving more towards tablet and smartphone gaming, leaving hard-core gamers who demand the best. We realize and understand that more growth in these key areas is needed and we’re committed to increasing our sales and marketing efforts to expand awareness of these products while keeping a sharp eye on operating expenses.

In addition to our focus on creating aspirational products, over the past few years we have expanded our geographic footprint as we continue to build a worldwide sales and marketing team. As games continue to cross geographic borders and the internet allows worldwide online competition, the company is committed to position itself as a leading provider of products that optimize the passionate video gamers’ performance on a global basis.

We opened our first international sales and marketing office in 2002 and now over 50% of our sales are generated outside the United States. Today we have sales and marketing personnel in the United States, the United Kingdom, France, Germany, Spain, Sweden, Japan, China and Hong Kong, working directly with retailers in their regions. And going forward, we plan to continue to invest in expanding our geographic reach.

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