Amazon takes on Google, Facebook, Microsoft, and Nvidia in a new battle to become the dominant force in the cloud gaming sector.
During an Alexa hardware event in September, the entertainment giant revealed its brand-new cloud gaming service, Luna. The device, set for release later this month, will put Amazon in direct competition with Google’s Stadia, Sony’s PlayStation Now, Nvidia’s GeForce Now, and Microsoft’s xCloud just when this new gaming ecosystem is primed for a takeover.
2020 has changed the gaming landscape
The gaming industry was already on the rise at the start of the last decade, having been building towards mainstream integration since the console era. Now, in 2020, however, it has truly exploded in popularity.
In the year to date, $29.4 worth of billion video games have been sold in the US alone, up by 23% compared to 2019. Key games like Activision’s Call of Duty: Warzone, and EA Sports’ FIFA collectively pulled in 42 million new players during the March to August period this year, while Nintendo’s profits have been “soaring” thanks to the global boom in the popularity of Animal Crossing: New Horizons and Super Smash Bros. Ultimate.
Mobile gaming is leading the way at the head of the pack, with iOS game sales rising by 44% and 20% in Japan and the EU respectively during July 2020.
Alongside the surge in mobile gaming, other key segments like iGaming have also experienced a boom during 2020. One of themost popular online platforms, betfair casino reported a 35% year on year increase in revenue during the first half of the year, and even platforms in newly emerging markets are reporting record levels of growth.
Gaming has now become the global consumer’s most popular form of entertainment, creating the lucrative arena where the latest rounds of Tech Wars take place.
The Amazon/Ubisoft tag-team
In a bold power move, Jeff Bezos’ ubiquitous corporation has teamed up with top gaming publisher, Ubisoft to create a gaming channel that’s exclusive to the Luna platform. So far unnamed, the channel will give subscribers access to Ubisoft’s stable of games on the day of release, including titles like FarCry 6 and Assassin’s Creed Valhalla. Besides running in 4K res, these games will also be playable via mobile devices – enabling Amazon to tap into yet another lucrative sector of this booming market.
This partnership shows that, unlike Stadia, Luna will not be a free platform in which gamers can sign up at no initial cost and pay to access individual games. Instead, Luna will probably take a “gaming channel” approach, requiring gamers to sign up for individual subscriptions to access its publisher partners’ channels.
It’s expected that each of these channels will have varying prices and offer different perks and restrictions, but how gamers will react to this model remains to be seen. It may well be a template that Amazon has used before in its Amazon Channels platform, which is exclusive to Prime members, however, gamers have a distinct set of expectations to TV show enthusiasts.
A counter to Stadia + YouTube
One of Google’s big ambitions for Stadia’s integration with YouTube was to offer new levels of engagement and interaction between content creators and fans, and now Amazon is dipping its toes into that segment too, with grand plans to integrate Luna with rival streaming platform, Twitch.
Twitch is currently in the lead in the game streaming market, pulling in 67.6% of all game streaming content watched during Q2 2020. YouTube came in second, with a comparatively lower 20% market share, followed by Facebook and the now discontinued Microsoft Mixer at 11% and 1.4% respectively.
This Luna/Twitch integration could very well push Twitch even further into the lead and will almost certainly give Amazon’s plans to enter the game publishing arena a boost too.
Riding the wave
One thing that Amazon has always excelled at riding the wave of emerging trends and inserting itself at crucial moments. We’ve seen it happen – and work – in the sectors of online shopping, Artificial Intelligence, Home Entertainment…
Cloud gaming, however, is still very much in its infancy as a market, and every new entrant is taking a risk. Yes, Amazon’s template for “bundling and selling” TV shows has paid off successfully so far, but it’s too early to tell if it’s a system that will work well in the gaming industry.