Dreamgear, an electronics accessories company, has picked the hottest markets to piggyback on. It manufactures peripherals for video games and iPods.
The Torrance-based company has seen consistent growth in revenue since it launched in 2002, reporting a 25 percent increase again this year to $33 million.
“We just had the good fortune of hitting extraordinary growth markets,” said Richard Weston, the company’s co-founder. “We’ve just been at the right time and the right place.”
The 50-person company’s products include GameBlaster, a Wii accessory; ShredMaster V, a wireless guitar controller for PlayStation 2; and a Plug n’ Play guitar video game.
Plug n’ Play is what Weston calls a “poor man’s video game” that can be easily connected to a television. For a fraction of the cost of a console system, it offers interactive games such as pingpong and tennis.
“It’s for the value-conscious customer more for a Target and Wal-Mart customer rather than a Circuit City customer,” said Jonelle Marquis, a buyer for Hollywood Entertainment, parent company for Game Crazy and Hollywood Video stores. “The cheapest console you can get is about $250. For a quarter of that price, you can get a 6-year-old a Plug n’ Play and he thinks he’s playing the same thing as the older brother playing the PlayStation upstairs.”
The accessories market is a rapidly growing segment within the booming $12.5 billion video game industry. It has grown by 57 percent to $1.3 billion, based on year-to-date sales data compared with the same period last year.
L.A.-based Nyko is the sector’s leading company, another third-party accessory manufacturer that sells video game accessories at discounts of up to 20 percent off the price of first-party manufacturers such as Sony or Microsoft.
Dreamgear, only five years old, is a rising star in the sector, said Marquis. She increased her business with them more than 100 percent last year.
The cyclical nature of the young business evened out a few years ago when Dreamgear added an accessories line for iPods. The channels of distribution, from Sears and Kmart to Toys “R” Us and Circuit City, were already established through its video game accessories. ISound, a high-end speaker set for iPods, comes in sleek, gray hardware.
“Our secret is maintaining competitive pricing and innovative design,” Weston said. “Everything is made in China these days and they look like they’re made in China. We’ve got American design.”
