Epos scales back Sennheiser gaming headphone business as it winds down operations

Epos, the company that took over Sennheiser's gaming products division in 2020, has announced its exit from the gaming headphone business, shifting its focus to enterprise communications products due to the ongoing weakness in the wired consumer audio market.

Epos will be focusing on enterprise communications products.
Demant plans to expand its product range for businesses and forge new distribution partnerships.
Demant expects operational expenses in Communications to decrease to DKK 450-500 million ($65 - $72 million) annually.

Epos, the company that took over Sennheiser’s gaming products division in 2020, has announced its exit from the gaming headphone business. Instead, the company will be focusing on enterprise communications products. This decision comes as a result of the ongoing weakness in the wired consumer audio market, particularly in the gaming sector.

When Epos was established as a separate entity from Sennheiser, hopes were high for its gaming division, considering the growing popularity of gaming in recent years. However, the division’s performance fell short of expectations in 2022-2023. In light of this, Demant, the owner of Epos, has made the strategic choice to cut its losses and shift its attention to enterprise communications.

Social media posts from Epos staff members have revealed that all employees in the gaming division have been laid off. However, the company has assured customers that it will continue to provide support and sell off existing inventory in the coming months. This process is expected to extend into 2024.

Søren Nielsen, President & CEO of Demant, acknowledged the challenging market environment faced by the gaming business since the separation from Sennheiser. He explained that the gaming market experienced a significant slowdown after a surge in demand during the pandemic. Without substantial investments in products, brand, and distribution, creating a profitable gaming business became an unviable option for Demant.

Looking ahead, Demant’s main focus will be strengthening its position in the enterprise solutions market. The company plans to expand its product range for businesses and forge new distribution partnerships.

While there will be some one-time costs associated with this shift in 2023, Demant’s overall financial forecast remains stable. The Gaming division accounted for approximately 15% of the Communications segment’s revenue in the first half of 2023. By 2024, with the combination of this phase-out and previous cost-saving measures, Demant expects operational expenses in Communications to decrease to DKK 450-500 million ($65 – $72 million) annually. This reduction is anticipated to lead to improved margins and a more favorable financial position in the near future.

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Background Information

About Sennheiser:

Sennheiser, founded in 1945 in Germany, is a audio company. They are known for producing high-quality audio equipment, including headphones, microphones, and other audio solutions. Sennheiser's commitment to delivering premium sound experiences has established them as a respected brand in the audio industry.