Home / Gaming / Delays, misfires mark Amazon's early gaming forays, but analysts urge patience – S&P Global

Delays, misfires mark Amazon's early gaming forays, but analysts urge patience – S&P Global

Amazon.com Inc. planned for 2020 to mark its triumphant entry into PC gaming. Now, that seems unlikely — and it’s not because of the COVID-19 pandemic.

The company’s video game development division, Amazon Game Studios, released its first PC title “Crucible” on May 20, but then withdrew it back to closed beta July 1 after the free-to-play multiplayer shooter game failed to generate much player interest. Its other planned PC titles, “New World,” a multiplayer online role-playing game, and “Pac-Man Live Studio,” a refresh of the iconic Pac-Man franchise, both missed their original 2020 launch dates.

“New World,” which was set to launch Aug. 25, is now delayed until spring 2021. “Pac-Man Live Studio,” set to release in June, was pulled from launch, and a new release date has yet to be announced.

Although Amazon invested in assets and talent to fuel its gaming strategy, acquiring game developer Double Helix and top designers Kim Swift and Clint Hocking, among others, analysts said strategic and creative differences weighed on the company’s early game efforts.

“Breakaway,” the first PC game announced by Amazon Game Studios in 2016, was canceled in early 2018. Swift and Hocking left the company in 2017 and 2015, respectively. Amazon laid off dozens of game developers in June 2019 amid a reorganization, which also included the cancellation of several unannounced projects. The game unit has yet to release a major title.

Even so, analysts think Amazon’s financial resources and market clout could eventually lead to success in the game development market.

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Amazon Game Studios’ “New World” was originally set to release in May 2020 but has been delayed until spring 2021.
Source: Amazon Game Studios

“Creating content is hard, and it’s unusual for a first effort to be successful,” said Michael Pachter, managing director of equity research at Wedbush Securities. “It shouldn’t be a surprise that ‘Crucible’ performed poorly.”

Pachter noted that Finnish developer Rovio Entertainment Oyj made 52 games before it landed on “Angry Birds,” now one of the most popular mobile games of all time. “Amazon has to keep trying till they get it right,” he said.

Michael Goodman, director of digital media strategies at Strategy Analytics, said even big companies have floundered at early efforts to launch into the increasingly crowded video game market.

“It took Microsoft [Corp.] years to establish itself as a major player in the gaming space, and we’re still seeing other big Silicon Valley players such as Apple [Inc.], Google [LLC] and Facebook [Inc.] still actively trying to expand their reach,” Goodman said. “If Amazon is truly serious about capturing a piece of the market, they’ll have to do more than just trying to throw a game or two together.”

Goodman noted that Google’s cloud game streaming service Stadia has struggled at times since its launch in late 2019, but Google is slowly addressing its weak points by ramping up the number of games available for streaming, implementing new features, and improving overall quality.

“When you’re a company like Google or Amazon, you don’t have a quarter-over-quarter or even a year-over-year mentality,” Goodman said. “They are big enough to think in 10- to 20-year increments. So while both Stadia and Amazon Game Studios may be struggling right now, it’s still very likely they emerge as successful as Microsoft if they keep making efforts to expand.”

Microsoft acquired numerous studios in recent years to expand its catalog of first-party games. Google, meanwhile, established in-house studios to create exclusive games for its platform. Amazon is rumored to be working on a cloud game streaming service similar to Stadia and Microsoft’s Project xCloud.

Some analysts say Amazon should focus more on strategic acquisitions of game development studios to make exclusive games under the Amazon Game Studios umbrella.

Ian Hughes, an analyst at 451 Research, said acquiring studios would probably be a more successful strategy for Amazon than trying to develop brand new games from scratch.

“Instead of hiring the top people in the industry and throwing them together to make a game, Amazon would be better off if it outright acquired studios that already have experience working together cohesively as a team,” Hughes said. “Just supporting them with resources and letting them do their thing would be the best approach.”

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