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Kingston Notches Firsts With Microsoft Deal

Kingston Technology Inc.’s new licensing deal with Microsoft Corp. highlights how far the Fountain Valley company has come since introducing its first gaming accessory less than two years ago.

Its HyperX division, which targets hard-core and casual gamers, e-sports players and their loyal fans, will manufacture headsets for the Xbox One, marking another milestone for a company best known for its ubiquitous USB and flash drives.

“The beauty of this is when we first got into the headset space about a year and a half ago, it was PC gaming,” company spokesman David Leong said. “Having a partnership with Xbox puts us firmly in the console gaming space now. That’s a big step for the evolution of HyperX.”

Customers, partners and members of the media got a sneak peak of the HyperX CloudX headset this month at a private demonstration at Caesar’s Palace Las Vegas Hotel and Casino during the CES electronics and technology trade show.

The accessory features a detachable microphone, memory foam cushioning, and 55-millimeter drivers for improved sound quality on the battlefield, at the stadium or in chat forums.

The silver-and-black color scheme mimics the style of the Xbox Elite controller, a heavily sought-after device that costs $150 and features customizable button plate covers.

“We were having a hard time just getting them for this demo area,” said Dan Kelley, who recently left D-Link Systems Inc. in Fountain Valley to lead HyperX marketing at Kingston.

The CloudX, which holds many of the same features as Kingston’s first headsets—Cloud 1 and Cloud 2—will be available in June. Pricing hasn’t been announced yet.

Kingston opted for three vignettes set in virtual reality to showcase the new audio technology: a sunken ship on the ocean floor where the user comes eye-to-eye with a passing whale; a paintbrush exercise where the artist can walk under, through and around glowing strokes created with a hand controller; and a desert landscape littered with zombies in a first-person Wild West shootout.

The Xbox deal will open a new revenue stream for the HyperX unit, which was established in 2002 to make gaming products, such as solid-state drives, and to improve computer performance and ultimately game play.

“This is the beginning of a pretty big relationship,” Kelley said.

The Xbox One has sold an estimated 15 million consoles since its 2013 launch, which is about half the unit sales of PS4 consoles manufactured by Sony Computer Entertainment Inc.

Redmond, Wash.-based Microsoft reported its Xbox Live platform had 39 million monthly active gamers in the September quarter.

Sales of HyperX-branded products are making up a bigger percentage of sales every year at Kingston, the world’s largest memory products maker for computers and consumer electronics.

The company had an estimated $5.9 billion in revenue in 2014.

HyperX has signed partnerships with Ubisoft Entertainment, the French video game maker behind the Tom Clancy franchise, and Cyprus-based Wargaming Public Co. Ltd., which is known for its historically accurate online military games.

Kingston’s Latin American unit is working with counterparts at Blizzard Entertainment Inc., OC’s largest software company, with annual sales topping $1.7 billion.

The latest promotion with Ubisoft, which has annual sales of about $1.6 billion, includes a free game with a headset purchase, a first for Kingston.

Stylin’

The company has closely tracked the booming gaming sector for more than a decade, linking consumer demand with stylishly crafted products.

It contracted street artist Sloth last year for the design of a limited-release headset model.

The CloudX is TeamSpeak certified and Skype ready, features expected by gamers who use chatting programs to communicate with fellow players.

The straps on the CloudX are made of aluminum, a feature audiophiles associate with quality sound. Another version released in the summer will feature Dolby sound, which also is treasured by gamers.

“These are things we learned as we do more and more of the headsets,” Leong said. “They want that style.”

Even Kingston’s 6,000-square-foot ballroom at Caesar’s had more edge than an adjoining suite showcasing the company’s more traditional memory products.

1The black carpet, sleek kiosks and modern furniture decor was designed by Variant Displays in Walnut to be “a little more hip and cool,” according to Leong.

Kingston didn’t hold a gaming tournament in the suite this year and chose to put the HyperX line and Kingston brand in separate rooms, both firsts for the company.

“We’re really trying hard to keep that differentiation going,” Leong said. “Even in the look and feel of the rooms.”

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