Going for Gaming: An Interview with MSI VPs Charles Chiang and Ted Hung on Gaming and Strategyby Ian Cutress on December 18, 2015 9:00 AM EST
MSI’s march on the gaming market has been well documented with plenty of pushes into notebooks, motherboards, graphics and an attempt to move the barrier forward with both brand recognition and user experience. One of the great things about going to trade shows is that we can often organize some special interview time with the individuals that actually make the decisions about products and corporate strategy within the companies that we talk about all the time. Way back at Computex, I had a rather extensive and wide ranging interview with two VPs from MSI deeply involved in product and strategy, and we were joined by a long-time contact with AnandTech who is now a regional MSI President.
On the left is Ted Hung, the VP of Motherboard Sales based at MSI's headquarters. In the middle is Andy Tung, a long time contact of AnandTech who is deep into the MSI structure and the President of MSI Pan America. On the right is Charles Chiang, the Corporate Executive Vice President and General Manager of the Desktop Platform Segment business unit. The interview was split into two halves, with Charles in the first half (this page), and Ted in the second half (next page). Andy was present throughout.
Part 1: Charles Chiang and Andy Tung
Ian Cutress: Computex this year has been busy with the launch of Intel Broadwell, AMD’s Kaveri Refresh, the NVIDIA GTX 980 Ti and AMD’s upcoming graphics as well as Carrizo. What has been the focus for MSI this show?
Charles Chiang: Like last year, our focus this year is gaming products. We believe we have the most comprehensive line in gaming, from notebook to motherboards, graphics cards and gaming all-in-ones. Our focus is always on gaming as well as unique features, making sure we have lots of features.
IC: When you talk gaming, there are obviously different categories of gaming: smartphone gaming, eSports gaming and high end gaming. Which market do you think is most important?
CC: For us, they’re all very important. If you classify the gamers, you find the hardcore gamers and casual gamers. From our point of view, we want to create the deeper and wider gaming products, targeting each segment accurately. We want our users to get the best gaming experience out of that product. If you see our GT line, the pricing fits in with the user experience expected. No matter what type of gaming you do, we want to have an MSI product in our portfolio. In my point of view, in the PC industry right now, gaming is the only segmentation that still has momentum to grow. That’s what we see in the market, so that’s why we put a lot of effort into gaming. We’re not providing the hardware only – we provide the total user experience. We partner with companies to dig deeper to give the best user experience, such as Steelseries for keyboards/peripherals, or Nahimic for audio. We also have a gaming app to create an ecosystem and be the best company to provide the best user experience. I think that is very important.
IC: You say gaming has the momentum – what keeps the momentum going?
CC: New gaming titles. Each one requires more and more performance, and for quality it demands more and more. It really is the gaming titles driving it. If you speak to Jen-Hsun (CEO of NVIDIA), he will say the same message. He’s waiting for 30 million people to upgrade their graphics. You know we talk with NVIDIA, we talk with AMD, and even with Intel – with the PC industry we need to find the killer application to boost demand. Gaming is a killer application. If I’m a gamer and I want to play the new gaming title, then perhaps I need to upgrade to a new class of system, then people will refresh. Today the technology moves so fast, so today you can buy a notebook and it lasts 4-5 years and not change because there is no reason to change. With a smartphone, people change in 1-2 years. We need to find the killer application to urge the user to change and upgrade. We need to rethink how we can make it but at this moment MSI is seeing gaming as the driving force to boost the demand so we are very focused on that.
IC: What about when it comes to Virtual Reality – one of the vectors that everyone talks about driving growth over the next 3-5 years is VR. Oculus has published the recommended specifications for a relatively high end gaming PC, for example. What can MSI do with VR to help the business?
CC: Personally I am still very excited about virtual reality. I keep watching the progress. From the technology perspective, it still needs to put more performance inside. For example if you play the game, you don’t want too much lag to give the best user experience. I think the performance still needs the next generation or the generation after that to get to the best user experience. So personally I believe that it will happen in late 2016 or after that. But we watch it very closely and hopefully we can contribute with some products in this space.
IC: Apart from pure products, is there anything specific you can do with VR? If you take the GPU business, NVIDIA makes the GPU then you buy it, perhaps give it some overclock and strap on an MSI cooler with features. What can MSI do with VR?
CC: At this point we are still learning about the technology. We have people to look at that, and we need to work out what sort of role we need to play. When you talk to NVIDIA or AMD, you get a design kit and make your own design – at this point we think about making MSI products different to our competition. Until a vendor in VR comes out with a reference design, I don’t think we can do much to contribute here. But still, I would like to say we have a team focused on gaming and I urge them to really think about how we can play a major role in VR.
Andy Tung: I think that as Charles was saying; with VR we notice devices like the incoming Microsoft Hololens coming to market soon, or the Oculus systems. Those are the good reference or base prototypes, even though we are not very detailed in things like the Hololens. However, where MSI fits into this is if you consider that Oculus is 960x1080 per eye, so two eyes becomes 1080p. Based on that, the experience should be ‘ok’, so we need to consider what feature MSI can add to make it better. This is the part we are internally developing, and right now I would say that there are not a lot of choices out there. I agree with Charles, we’re looking at late 2016 and beyond will be the time to have a more mature product.
CC: We will see the product coming, but the question will be will they deliver a good enough user experience? That’s another big problem.
IC: Have you personally tried any of the VR headsets?
AT: Ask the obvious! If you look back to the mobile conferences earlier in the year, the cellphone brands from Korea and Taiwan have also put a sort-of hairband with a smartphone, so everyone is trying to get into the VR things. Internally we have tried Oculus, we haven’t tried Hololens yet. We have some models from Sony with that ‘inside 50-inch’ type of thing – it’s ok. Right now it’s how we incorporate with the application we are focused on. We will see different types of VR – right now it’s almost just the display, and we can make a higher frequency display to make it smoother, but your eye might get tired. So we will see what we can do. Right now it is still in the early development stage.
CC: I have tried Oculus, but not for long. Everyone has a different user experience, but I still think there is time for development. But one thing for sure is that things like 3D glasses will be totally different. VR is more exciting, and you can find more applications than just gaming. It’s about finding the applications. We’ve seen software where people can design things like motorcycles together, and that is really cool.
AT: Not only VR but also this year we demoed an eye tracking system, Tobii, on our laptops. So no matter whether it is VR or hands-free type of controlling a system, it’s what we try to do and try to find the best possible technology that makes sense for the user.
CC: Andy also mentioned how we are thinking about how we can put VR products with our gaming notebooks, and how we can provide a better user experience with this combination. It’s another topic we are discussing. I would like to say that definitely when the VR technology is becoming more and more ready and more mature, later in the timeline, that is when MSI will really discuss about integration with those products to make our own brand to give the better user experience. That is one way to go. We are a very open-minded company to what we see in this industry, so just like our eye-tracking notebook, if that can really come out as a great technology then we will put it in our products and draw the market together. So with VR we are open minded, and we are talking with NVIDIA and AMD and the other guys in the industry so we can find the best way to provide our products.
IC: So the world’s first VR capable gaming notebook?
CC: You can expect this – we want to be number one.
AT: Once my boss asked me about gaming cellphones. I told them to look at the games running on iOS and Android – they don’t require a lot of horsepower. So no matter how fast your GPU is, unless the application can use it, you can’t really overpower the system to much benefit. So we were teasing each other on the gaming phone!
IC: Imagining powering a smartphone with a discrete graphics card?
AT: That was a dream of the green company – superphones! I think it really depends on usage, so I asked my boss if that was really the usage we wanted to deliver. A key part of our research is finding the usage before we make a new product.
IC: So at the show you introduced your partnership with Nahimic, the French audio company with a background in 360º audio systems for the military. Can you explain about the nature of that relationship and how you want it to grow?
CC: I think Nahimic is a very important to our audio future at MSI. We have already been putting the software on some of our notebooks for a couple of months already. Nahimic audio is value we can bring to the gaming user, and the technology is simple. If you want to hear the sound coming from a different direction to normal, with the technology when you hear a step you can pretty much say if he’s 15 meters away or 100 meters away. It’s a technology from a company of professionals – they build the 360º sound simulator for the French Air Force, and we want to bring this technology to the PC. So with gaming, this is the best area we can focus this software and if it is to get the best sound effect when you play the game, you need the good hardware and software together. But also when you want to communicate with your team against all the noise, or if you want a very good audio recording to publish online or wherever, then Nahimic can help with that also.
Before our problem is that we have a very good audio solution, audio boost, but it did not get a good reception and people don’t feel that it is bringing value to our products. So this is why we are partnering with Nahimic to put the solution there, and the gamer can really enjoy the Nahimic and MSI experience. So I have to say that MSI, when we started targeting gamers more than before, our vision of the gaming ecosystem was maybe not as clear as it is today. But after three years you can see our gaming notebooks are selling quite well, and we get a lot of endorsement from gamers. We listen to them, and give them what they need to solve their problems and provide a better solution. So whether it is audio like Nahimic, or keyboards like Steelseries. With Steelseries we are not just working on the notebook side, we work with them on the component side as well, and you can expect that kind of solution will come in and we will provide it.
It is not so much about selling the hardware today, about the CPU or the GPU inside the system. We want to be using the gaming language to communicate better with our users. We want to provide a total user experience solution. These days a lot of people say ‘hey, we want to jump into the gaming field’, but MSI is gaining momentum so then they just copy our product and put an animal as a logo which they then go out and sell. Personally I think we need to address the gamers directly, rather than copy others. So maybe our products need to implement feature better, and be more accurate for the users. But you still need to deliver sales on the business side, so we really want to put the gaming genes into our employees, either as new hires or the long time staff.
We encourage our employees to play games, to join our internal competitions. We sponsor gaming teams and even host gaming tournaments. We really want to contribute something to gaming and the community. I think that you can feel this in the way we represent our gaming brand, and continue to meet the gaming requirements. That is very important.
IC: What games do you play, personally?
CC: I love the fact that my son plays the deep games, but I am more of a casual gamer. I keep notes on our internal teams, and we hire hardcore gamers for it. So our gaming notebook marketer is a hardcore gamer, and he will play games most nights until midnight. With my team doing the testing, they will play a game, and I will ask them to play the latest games on our notebooks. Sometimes we get early versions of games, so we can give feedback on performance with our products, both with gamers and developers. We speak with gamers and ask what kind of performance or configuration they are looking for, and then cater the product to them or put it in our next generation. I mentioned that personally I don’t need to be a very good gamer, but we need to make sure we have top gamers in our team. Our gaming team is just outside my office, and I want to see them scoring the best. It’s really like you need to have a lot of professional people and you need to trust them, you need to listen to them, and the most important thing you need is to invest both time and money into it. If you keep investing over time, you can see a lot. Even something simple, like MSI employees wearing gaming t-shirts, or my son who I always ask about his opinion.
AT: My son also likes to test! We like to get family involved as well.
CC: Your son keeps saying he is a tester!
AT: Tester, evaluator, whatever you like to call it – he likes to play a lot of MMOs and first person shooters, which develops an element of working in a team. You need to play your part, and play every chance you get. I love that idea.
IC: Which games are you currently playing?
AT: Right now, the latest one was Battlefield Front Line, but I think that looking ahead I’ll be playing Rainbow Six, or the next Call of Duty. For me it’s all about pick up and play.
But circling back to Nahimic, I think to enrich Charles’ thinking is that in 2013, we just thought everyone was just copying everyone else, no-one was actually pushing the quality up but trying to undersell everyone else. So we decided to focus on facts. A couple of facts came up immediately. The first one, even for gun shooting games, is the fact that you have a teammate and you need to communicate with them clearly. In this case, microphones become a key factor. The next factor was streaming, so whatever you are playing, we like to know that the video we recorded is smooth, meaning high definition is also a factor. So who is the best in that line – a lot of people will emphasize Adobe. So we find out about this French company that used to cooperate with the military – they own the technology and all the elements. We arranged a demonstration which was really good, so this is the reason I think we went into partnership with them. These elements will be key factors in 2016 as well, so that’s why we partnered with Nahimic this year.
CC: This is just one feature we bring for our gamers – we will keep improving and evolving. At the minute we have Nahimic version one, and we will come out with version 2 and 3 in time, bringing more and more features that gamers are looking for. It’s just like our partnership with Steelseries, we’re on the third generation. So we will keep building these features, and the gamers really like them so we will keep pushing. We need to make sure we have the product and not just the hardware. We need to deliver the best gamer user experience, and no matter what the gamer wants in the product, then we can really provide a good solution to that. So you expect that and more exciting feature will be coming.
IC: Are you ready for Skylake?
CC: I’m ready for Skylake. We think Skylake can really boost demand from the market. But Q1 and Q2 is going to be tough for everyone.
IC: Oh? How so?
CC: I’d like to say that it is for many different reasons, but a big one is exchange rates. So like the Euro – we are seeing the Euro exchange rate is a real affect for us. Last year the highest is 1.30 and the lowest is 1.01, which is nearly thirty percent. So we can see that our customers/distributors are hesitant in doing inventory. So if before they wanted 1000 pieces, now it is more like 100 or even 10. They want to minimize their inventories and overhead, and now the exchange rate is not good, some are not wanting to do business until it gets better. That is Europe and especially Russia. The US exchange rate is OK, so in Q1/Q2 we are seeing this business is quite stable. But this is macroeconomics. If we have a new product and a new platform to boost the marketing name, I think business will come back and faster.
IC: Moving into 2016, AMD is planning to release their new x86 platform based on the Zen microarchitecture. What are your thoughts based on what you know about Zen?
CC: AMD has not refreshed their platform in four or five years, which means it is currently not meeting the right demand. But we talk with AMD for sure, because you need to have one or two years for a platform refresh to teach people and urge them to switch to the new platform, otherwise everything is driving down the ASP (average selling price) continuously. But we also talk with Intel and NVIDIA as well. Customers are always looking for a balance between power and performance, so we are seeing that people are looking for quieter and quieter product, but with good performance. With MSI making gaming products like this, it aims for that kind of customer. So with AMD, I ask for the next generation to make sure you find the best thing. Compared to others, AMD always use the turbo to drive the performance, which is not always a good strategy. If you have two cards that are the same performance, the AMD GPU is always hotter than NVIDIA, which is another problem. I tell this to AMD, and they say to test the next platform which will be a lot better in performance. The gamers don’t want AMD to have poor performance because of competition and innovation – they don’t want others to become the monopoly.
IC: I have heard that if AMD changes significantly, then Intel might have to be split apart?
CC: I don’t see that as true – if you go to China or some other country, they have a government bidding process where they allow people to submit solutions and for those some competitors are certainly ARM. So I think that competition is important for innovation and that the winner has most of the market share. If you ask my opinion, we still support AMD – they are growing a good product and then we will also delivery it to market. You will see AMD gaming products soon - the energy we put on NVIDIA, we also will put into AMD for Carrizo and new GPUs.
IC: Over the past couple of years, MSI has integrated the gaming brand across its product range. Usually these product areas, such as laptops and GPUs, are separate within a company and a different business unit. We have seen in other companies that these units do not talk to each other. So at what point did you decide that MSI’s gaming brand should be an umbrella over the business and what were the difficulties in that integration?
CC: I would actually say that the decision was not difficult. Personally I don’t feel it difficult to push the team in that direction. I just shared with AMD that maybe three or four years ago, people were talking about MSI saying that our technology is good and the products are good. But we were thinking about what MSI looks as a whole – do we have a clear branding image to tell our customers what kind of company we are? When we saw that gaming driving more and PC gaming is driving the momentum at the time, management together decided we should position ourselves as a gaming company.
At that time we started to drive, although from a different business unit. But we were starting to be called a gaming company and moved across to all the business units. We then hold a regular meeting where we sync our strategy with the corporate marketing and defined the direction. We looked at our status to make sure that we were delivering the right product on time and align the gaming synergy in our brand. So things like Nahimic – we moved it onto our motherboards, our all-in-ones and our notebooks. Same thing with Steelseries. Even though we are putting it to our desktop and the components in a different way, we decide that the gaming is our direction. Every month we still report to the CEO with our status.
It’s really about deciding a strategy and pushing the status, making sure we can roll out our products on time. I don’t see that it is too difficult to drive people towards this direction and I believe that all the business units get the advantage for gaming. If you ask people what MSI is today, people will say we are a gaming brand. We are leading in gaming. This makes it easier to do business, unlike before. So every business unit benefits from this strategy. I still believe we make the right choice three to four years ago and we will keep moving forward at the right time.