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Epos Shifts Focus from Gaming to Enterprise Communications

Epos, the gaming products division of former partner Sennheiser, has announced that it will be exiting the gaming headphone business to concentrate on enterprise communications products. The decision comes as a result of the continued weakness in the wired consumer audio market, particularly within the gaming sector.

Since its establishment in 2020, Epos has been responsible for shipping a number of notable gaming headsets. However, the gaming business performed weaker than expected in 2022-2023, prompting Demant, the company that owns Epos, to make the strategic decision to discontinue the gaming division. This move comes as additional investments would be necessary to sustain the gaming business.

As a result, Epos has laid off all of its gaming division employees but has assured customers that it will continue to support them and sell off existing inventory in the coming months. The process of selling off inventory is expected to extend into 2024.

The President and CEO of Demant, Søren Nielsen, expressed regret for the impact this decision has had on affected employees. Nielsen stated that without significant investments in products, brand, and distribution, it was not possible to create a profitable business in the volatile gaming market.

Looking ahead, Demant will focus on strengthening its position in the enterprise solutions market. The company plans to expand its product range for businesses and grow its distribution partnerships. While there will be some minor one-time costs in 2023 due to this shift, Demant's overall financial forecast for the year and beyond remains stable.

In the first half of 2023, the Gaming division accounted for approximately 15% of the Communications segment's revenue. With the phase-out of the gaming division and previous cost-saving measures, Demant expects operational expenses in Communications to decrease to DKK 450-500 million ($65 – $72 million) annually by 2024. This reduction in expenses is anticipated to lead to improved margins and a more favorable financial position for the company.

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