Amazon and Gaming

Amazon is, supposedly, thinking of releasing a game console. First, my comment on the Passive Voice below:

This would be a huge challenge. The last time a console entered the market it was the Xbox…thirteen years ago. There have been some other attempts (most notably the Ouya, which failed for its own unique reasons not applicable to Amazon) but not any that were successful.

Two things they have going for them, first they’re Amazon and they already have a marketplace set up. They have the money to buy their way into the market in the same way Microsoft did. They could offer a Steam-like service that allows developers to directly load up while also selling mainstream games, just like they do with the Kindle.

There is also the dwindling Nintendo market share. In the next few years we’ll see them go the way of Sega (that’s only my guess, but it’s not a unique one). That leaves a bit of a gap.

But the difficulties are HUGE here. First, you think publishers in the book industry are bad…introduce a major barrier to industry that sees millions, even hundreds of millions, of dollars required to make a game. Developers like EA and Ubisoft own the market, chewing up and spitting out Developers. They’ve controlled price and, at times, even the console makers themselves. A lot of the controversy that arose with the Xbox One was the way they were catering to Publishers at the expense of the consumer.

Now, a lot of people have been predicting the next generation to be one that didn’t see consoles. It is looking like more and more that Steam is looking to take advantage of this, basically providing a console that allows you to stream/download game directly. This is a DRM measure but one that consumers have really responded to. Amazon can take advantage of this, but they’ll be fighting Steam, who is really, really good at what they do, to gain market share.

I think their is a situation in gaming very similar to literary publishing. The Publishers have the big name developers over a barrel because of barriers to entry and cost. Some have pulled out to start their own companies, basically giving up on Triple A titles to make games with smaller scope. Steam has already begun to take advantage of this and Amazon could do a great job. Just like literary publishers, game publishers are easily put into financial instability.

Consumers also want more value. It’s insulting paying $60 for a bad game, close to that for games that have been out for years. They don’t understand discounting or sales any more than literary publishers do.

So, to recap, if Amazon can wrestle their way in between Sony and Microsoft, fight off Steam, be prepared to release a solid product and coax developers into making very good exclusive titles, they may have a shot.

If anyone can make a console and duke it out in this market, it’s Amazon, but this is a merciless industry with little patience for dabbling. They have to go all in. Their methodology for the Kindle is a great start, but more will be required. There are many who’d argue the Xbox would have failed without Halo. Here’s the big difference between Kindle and the ZonBox (or whatever it’ll be called). Amazon has pushed around the publishing industry. Did they sick the Justice Department on them for colluding? Not necessarily, but they can’t act like they didn’t have anything to do with it. It was justified, but it was also a business move on their part. While I’d be willing to say that game publishers are doing a very similar act, the fact that no one has called them on it leads me to believe there is a legal loophole I’m missing.

The other big is there are a ton of other retailers for gaming. GameStop, all the big box retailers, tons of dedicated game retailers, they own this space. Amazon does a huge chunk but it’s nothing like it is for books.

Let’s not forget either, the console makers are also publishers. They essentially have their own kindle equivalent funneling games. They don’t sell them exclusively (at least not very well) but if Amazon took this leap they’d be the first to be a) the hardware maker b) the marketplace c) the developer/publisher. This puts them in the crosshairs of a LOT of people.

As a consumer, I’d like to see a shake up in that industry as we’ve seen with books. Games are too much and the gambling nature of development is ruining the industry. Triple A titles are the only thing keeping it up and every developer/publisher gambles on these. Games like Tomb Raider, which was excellent and sold millions of titles, are a failure because they didn’t recoup the cost of development. I understand and appreciate the desire to further the industry, to innovate, but all they’re doing is throwing money at the issue. Burn more money to make a flashier game. They’re not thinking creatively, it’s all about specs and visuals.

Good development houses have failed because of these games. This gamble is pushed on them. Publishers are turning away games that “have no market”, requiring “sure things”. It’s why you see the market inundated with a certain genre or theme of game.

This results in higher costs, higher risk, more burnout. Eventually, the industry will reach a critical mass.

It has happened before and it can happen again.

Sorry, bit of a tangent, I know. Amazon tends to be a bit of a slate blanker, that is, they clear the board. They end up on top, while those that were struggling (and maybe earned that struggle) die.

Amazon has a big challenge ahead if they pursue this. Developers are quick, they won’t be caught off guard by technical innovations, the new marketplaces that would rise, the new ways of doing business. Publishers, they’ll fight for control. Console makers (who are also publishers, let’s not forget that) will fight harder with retailers fighting the hardest. It won’t be a one-sided battle like the one with B&N and Borders. GameStop is a business that came about in the past decade as it absorbed…well, everything else. They know how to play, know pun intended. The other retailers are Wal-Mart (who is steadily expanding their gaming category) and the major electronics stores.

This all launches into the idea of digital games. Consumers, myself included, are very hesitant about the way console makers and publishers have pushed digital distribution. There’s no discount, which might be more fair since most of the cost is development, still, there’s no attempt to help the consumer on cost. There is also the push on micro transactions, downloadable content, and freemium content. Imagine if you had to pay for the epilogue of a book, or pay to turn a page more frequent than every minute. Gamers are getting milked harder and harder, adding to those $60 price tags.

Amazon has an opportunity here. There weakest area is as a developer, their strongest of course is as a marketplace. My prediction is they’ll come out with something similar to a SteamBox, something that will be able to download PC content directly. Anything above that would really require them to be a publisher, if not a developer themselves, to make their own exclusive titles.

This would be a big undertaking. Honestly, I don’t think they would do it. Just doesn’t seem profitable. But then, I guess that’s what a lot of people probably said about what they did with literary publishing.

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About enathansisk

My name is Nathan Sisk, and I am a writer and aspiring author.
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