Amazon goes “all in on video games”
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Amazon goes “all in on video games”

According to Amazon Game Studios, the Ecommerce titan’s video game segment, it sees “gaming becoming the largest entertainment form on Earth.” That’s why the company is making aggressive inroads into the industry. There are currently over 100 job openings listed on the Amazon Jobs site, and Amazon has been poaching industry veterans from places like Sony and Electronic Arts to close the knowledge gap between itself and their former employers.

Amazon’s share price is up 18% so far this year

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SOURCE: Yahoo Finance

Gaming is fast becoming a dominant form of entertainment. This is becoming apparent not just in the size of the industry (which is already worth vastly more than the music industry and box office revenues taken together) but also in the amount of time Americans are spending on it. In 2016, players spent 43 billion hours playing Activision Blizzard’s games online – a figure comparable to Netflix’s 45 billion hours of streaming TV watched. However, unlike Netflix, it is likely that time spent playing Activision’s games offline would add billions more hours to that figure. Add in industry titans like Electronic Arts and Take Two Interactive, and the outperformance of the gaming industry becomes obvious.

Amazon understandably wants a piece of this action, and is well positioned to capture it thanks to its acquisition of game streaming site Twitch. In September last year, the company sought to integrate this service further into the Amazon ecosystem by launching Twitch Prime – a standalone service for Twitch users, which is also available free of charge to Amazon Prime subscribers.

Amazon has also released its own game engine, Lumberyard. This powerful software allows developers to create games with built in integration to Twitch as a platform, and Amazon Web Services (AWS) as a cloud hosting service. In tying up its services, Amazon is making a play for the emerging field of eSports: create a game on Lumberyard, and it will be available to millions of players on Twitch, where the focus is competitive multiplayer gaming. And AWS provides the cloud storage that developers require to connect multiple players of online games. In creating this ‘sandbox of innovation”, as a holistic gaming service aimed at professional developers, is Amazon going to be able to ride the top of the eSports wave?

Disclosure

Dominion holds Amazon in its Global Trends Ecommerce Fund.


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