Between an e-book business, a TV studio, and gaming streaming service Twitch, Amazon has all of the pieces to build a video game franchise with cross-media potential.
Now all it needs is that hit game
Amazon is getting another chance to deliver. The Seattle online retailing giant on Tuesday released a new set of games for its mobile devices. The fall lineup is a mix of original titles and collaboration with other game developers, all made specifically for Amazon’s devices. It includes The Unmaking, a shooter game developed solely by Amazon; CreepStorm, a role-playing game; and Tales From Deep Space, an adventure and puzzle game. Amazon’s Fire Phone, despite a weak start, also gets its own dedicated game in adventure title Til’ Morning Light.
Amazon is eager to tap into the $75 billion gaming market, both because it is a potentially lucrative source of revenue for the company, but also because its own line of devices, from its tablets to a streaming TV box and smartphone, desperately need hit exclusive games to draw in consumers. Gaming hasn’t been an easy category to crack. Since launching in 2012, the company’s game-making arm, called Amazon Games Studios, has yet to produce a hit title.
But Amazon has gotten more serious about gaming in the last year. The company hired experienced talent and acquired gaming studio Double Helix in February and live video game-streaming site Twitch in August. Furthermore, its new games will get support from different parts of Amazon’s sprawling empire, including its advanced servers, and — for two of its games — its Audible.com audio books and its graphic novels store Comixology. Amazon’s disparate acquisitions has brought together the makings of a major media company, able to sell a strong brand from game to movie to toys and beyond.
“It’s all about driving the eyeballs one way or another,” said Patrick Sweeney, a video game industry attorney at the IE Law Group. The result is that Amazon is bringing together its various pieces to create a broader strategy. “You can have that stuff exclusively on Amazon and you’re driving people to that and they’ll stay for other things.”
Born on the notion that people wanted to buy books online, Amazon has always bet on content. From books and CDs to e-books and digital music streaming, the company has focused on delivering products to customers. While it’s no Netflix, its efforts on Prime Video are starting to turn heads with its original programming.
In the last half of 2013, Amazon has indicated that it signed up millions of Prime members because of its video streaming service, CRT Capital analyst Neil Doshi said, which means exposing more consumers to Prime’s free two-day shipping, in addition to its multiple media services.
“It’s like a drug, once you realized how great it is, you’re going to want to keep using it,” he said. “Ultimately, you forget about the $99 price tag.”
Whether Amazon is able to become a large video game media empire — or even launch a single hit — is yet to be seen. It currently is a small player in the industry, with three studios making games for its tablets, smartphones and set-top boxes. It also has a smaller number of apps compared with Google, which delivers more than 1 million apps through Google Play, many of which are gaming apps. Amazon’s Appstore has 300,000 apps total. Amazon’s devices use a custom version of Android, and are unable to access the Google Play store without heavy tinkering. Instead, users rely on the Amazon Appstore for their games and programs.
Multimedia powerhouse, under one roof
The ultimate goal is for Amazon to launch a franchise of the same magnitude as space-age shooter Halo, which has rung up billions of dollars in toys, books and games, of which 50 million units have been sold since it debuted in 2001.
Microsoft, which purchased the franchise and its maker Bungie a year before its launch, has been at the heart of Halo’s media empire. But that has also meant managing book publishers, toy makers, movie studios and retailers.
While Amazon has no Halo-like hit yet, it has assembled nearly all those tangential businesses under one roof. One of its newest additions is an Internet technology that allows intricate-looking games to be played on a high-end server, with the detailed images streamed to a customer’s smartphone or tablet. That technology, which is like an interactive version of Netflix’s video streaming service, has struggled to catch on in the market, but Amazon believes its games will make it compelling.
The one business Amazon hasn’t yet entered is toys, an industry that video game companies is increasingly targeting. Amazon does run one of the biggest marketplaces on the Web, however, making it easy to cross-promote products through all manner of advertising and in-app advertisements.
Audio books and comics could just be the start.
Ian Vogel, a studio head at Amazon Game Studio, said the key is tapping into what he calls the “Amazon sandbox” of services. The former design lead on Age of Empires for Microsoft, Vogel has been as Amazon for about a year.
“As we continue to make games, we will continue to look for ways to integrate our sandbox features so customers are engaged and having fun,” he said.
Til’ Morning Light, and adventure game based in a haunted mansion, is made specifically for Amazon’s Fire Phone.The e-commerce empire could easily use its other assets to birth a gaming franchise. The company has Amazon Studios to create TV shows or movies, and its most recent purchase Twitch to promote live gameplay viewing.
“They are clearly deeper into gaming,” said Doshi, adding that Twitch is a particularly good fit, given the access to hardcore gamers. Amazon could fold Twitch into its Amazon Prime subscription service, which Twitch users are already asking for, and use it to attract marketers to its advertising platform. He said he expects to see Amazon use rely more on its other assets to bolster gaming.
While the company says it won’t be changing anything about Twitch or integrating the service anytime soon, the potential is there.
“We definitely hope to learn from them, share customer information,” Vogel said.
A gaming gold mine
It’s easy to see why Amazon wants to get into the gaming business — particularly in the app world. Games dominate Apple’s App Store and Google Play. They’re also among the top revenue generators, with titles such as Clash of Clans, from Finnish game-maker Supercell, reportedly bringing in $15.15 million in sales earlier this year from its 29.4 million daily active users.
Fellow Finnish game maker Rovio is an example of a company that has built an entertainment franchise around its series of Angry Birds games, which include toys, backpacks, clothes, and an upcoming movie. But Rovio also stands as a cautionary tale for a company that failed to back up its multimedia aspirations with continued success in its core business of games. Earlier this month, Rovio said it would slash up to 130 jobs, or 16 percent of its work force.
And while Halo represents a model in creating a video game franchise, its success was built upon console and PC gaming, and not mobile. Few mobile games have seen the longevity of Halo, which has lasted 13 years and spans nine games.
For Amazon, it all comes back to what the company does best: selling people everything they can imagine. It just needs people to start imaging the online retailer as a hub for gaming too.
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