Report: Amazon to double down on gaming with a new streaming service

Earlier this week, when Razer announced that it would integrate Amazon’s Alexa into its gaming platform, I wondered if this was a strong signal of how Amazon may be starting to lay the groundwork for its own strategy to do more in gaming. By coincidence, today The Information reports just that: Amazon is now developing its own streamed gaming service, according to its sources. It’s already talking with publishers to stream their titles on the platform, and it aims to launch it next year.

A streamed gaming service from Amazon not only would complement what Amazon is already offering in streamed media — which today includes video, music, photo storage and more — but it will put Amazon squarely in competition with those that are working on, or have already launched, their own streamed gaming efforts. Players include Sony’s PlayStation Now, Microsoft, Google, Nvidia and Electronic Arts.

To be clear, Amazon already offers streamed gaming in a limited format. Prime subscribers get access to “Twitch Prime,” which provides users with free games every month, along with select free in-game perks. This is separate to Twitch’s mainstay product, a video streaming service that works alongside other games creating a social network of sorts, where users watch each other playing and commenting on playing games.

When Amazon acquired Twitch in 2014, many wondered if that would lead to it launching a bigger gaming service. That possibility was bolstered when Amazon acquired U.K. cloud gaming backend specialist GameSparks (in 2017 as we first reported, although only confirmed by Amazon in 2018). GameSparks’ technology has already been deployed in Amazon’s AWS service — which has a dedicated business targeting games publishers, providing everything they need, from gaming technologies to server space, analytics, backend services and more.

That is also a strong sign of how Amazon has quickly integrated the tech into its infrastructure already, and already has all the tools it needs to build a consumer service of its own.

So it has definitely taken a while, but perhaps Amazon’s own, bigger, direct-to-consumer gaming effort is what’s finally taking shape.

The idea is that Amazon’s gaming service would go head-to-head not only with console-based gaming platforms, but also a number of other big players that are tapping into the boom we’ve seen in streamed media services. Consumers now have faster, more reliable and cheaper broadband connections and are using them to replace legacy hardware and services in areas like music, television and more.

For those who are selling services in those other areas — and Amazon is one of them, by way of its Prime-fueled Amazon Music, Amazon Prime Video and its Fire TV service — providing a gaming platform not only could make the overall service more “sticky” but could attract new consumer Prime subscribers who might come specifically for the games.

But those are not the only weapons Amazon has in its arsenal. As we noted this week, we’ve seen very little application of Amazon’s AI muscle — all the voice services that have completely excited consumers, and its work in augmented reality — in media services beyond the Echo devices.

In gaming, we are starting to see small moves there — such as Razer’s integration of Alexa voice commands to control its game console — but there are ways that you could imagine that technology being incorporated into actual gameplay, which could help set Amazon apart from the very big field of competition.

There are some juicy tidbits in The Information story around the bigger news that Amazon is eyeing up a streamed gaming service that point to some of the challenges it might be facing.

It notes that Jason Kilar, the executive who used to lead Hulu, at one point was being tapped to join Amazon — where he had worked in the past — to lead the new gaming effort. That never came to pass, however — perhaps one reason why a gaming platform has been such a long time in coming.

Another issue is getting games publishers on board to a service. For many, their bread and butter comes from the sale of games that are played on consoles — usually games that are specific to one particular proprietary console — so a service that is constructed Netflix- or Amazon Prime-style, where a consumer pays a single monthly fee to access whatever content they want, when she or he wants it, could eat into those margins.

That lament is very familiar: it’s the same one from the film and music industries, whose physical sales have been massively impacted by streamed services. In those cases, we’ve seen studios and labels gradually come around by way of licensing deals and simple market forces, so it will be interesting to see if that plays out the same here.

(Also worth considering is Amazon’s existing structure for Prime Video: some films are free, including the growing selection of Amazon-produced content, but there are many shows and films that you can only watch if you pay a separate fee.)

We’ve reached out to Amazon for comment for this story and will update as we learn more.