The destruction of Amazon's gaming division as part of the company's massive job cuts is another blow to the already dismal state of the job market and career stability in the games industry.
It's not clear how many of the 14,000 jobs is the giant company cutting? will be in its gaming subsidiaries, but there has been a “significant reduction in roles” and a major shift away from big-budget game development.
As dire as the consequences of any major layoffs may be, this event has been a long time coming.
By this I do not mean any disrespect to the undoubtedly hard-working and talented people whose lives are impacted by these strategic decisions made well above their pay grade; There have been a lot of really great works in Amazon's games, perhaps most notably New World, an MMORPG that is now among those slated for cancellation.
From a strategic perspective, however, Amazon's entire flirtation with becoming a games company turned into a decades-long comedy of errors.
The world's largest and most powerful retail and cloud operator failed at every turn to capitalize on its market advantages or develop a coherent strategy that took more than five minutes.
“All the Amazon Flirting” [of] Being a games company is a decades-long comedy of errors.”
The fact that the directionless ineptitude of the company's gaming efforts has survived so many restructurings, pivots, product cancellations, and leadership changes is a testament to the incredible strength and growth of Amazon as a whole (primarily through its online retail business and, more recently, through Amazon Web Services).
No matter how much was spent on games, during the boom years it could be dismissed as a rounding error, but the music had to stop sooner or later.
Now that Amazon is battening down the hatches across the board, gaming's blessed existence as a confusing and money-losing hobby for the company appears to be coming to an end.
What's unusual about all of this is how little Amazon has to show for all the time and effort it's put into the games. The company is, of course, one of the largest gaming retailers in the world simply due to be an Amazonbut was unable to use it in any meaningful way in digital gaming.
The company's performance on this front was so poor that when Post on LinkedIn by former Prime Gaming VP Ethan Evans appeared in February, reflecting on the company's failure to disrupt Steam's dominance of the PC digital distribution market.
“Everything Amazon did in this space was fragmented and temporary.”
The most common reaction was genuine surprise that Amazon was even trying to compete with Steam. Everything Amazon did in this space was piecemeal and temporary.
Prime Gaming actually included a bunch of free games for Prime subscribers, but it's unclear how many subscribers even knew about it—and the games you redeemed there were typically provided through third-party stores like GoG or the Epic Games Store, rather than being added to any Amazon game library.
The service vacillated between trying to be a true game subscription service and instead offering free currency packs for popular F2P games; it's now included in the Luna game streaming service, although the average Amazon customer will have a hard time noticing that either service exists, let alone that they've merged.
The contrast with the way Amazon has approached Prime Video—a service it appears to wholeheartedly believe in and has the backing of right up to the company's top brass, even as it recklessly throws billions at a Lord of the Rings show that no one asked for—is instructive.
When you search for a movie on Amazon, Prime Video results are at the forefront; If you want to buy an actual DVD or Blu-Ray, you'll have to scroll through several screens telling you it's available to watch for free, rent, or buy from a streaming service.
However, search for a game on Amazon and you often won't find anything like it; sometimes it was entirely possible to buy a game that was already available to you for free on Prime Gaming or Luna without ever seeing any information about it.
Despite all the strategic mistakes that were undoubtedly made in the development and publishing of Amazon Gaming, I don't think the company can really be blamed for failing to become the major publisher they wanted to be.
This is an exceptionally complex task, and one that goes well beyond Amazon's core competencies (namely running a cloud platform while also running a light retail business). The fact that some games, such as New World, have actually proven to be successful and have created a passionate, if not huge, fan base is a decent showing on that front, although obviously not a commercially viable business unit.
However, the company's complete failure to leverage the company's scale and dominance in cloud and consumer-facing retail into any kind of foothold in digital distribution or online gaming services is almost impressive; especially considering that the company apparently thought it was serious competition for Steam all along.
While there were individual managers and executive decision makers at Amazon, and some of them made some really bad choices along the way, I think it's more instructive to think about what happened here in terms of a structural failure.
After all, Amazon is not alone in this failure. It's only been a few years since we saw Google suddenly (if entirely predictably) throw its hands up and abandon its once-grand gaming ambitions. Streaming service Stadia is shutting down and a full refund for platform hardware and games.
These are two of the so-called “Magnificent Seven” who have essentially burned their hands on the gaming slab in just the last five years.
Scale, finance and technological dominance are simply not enough to make it in the creative industry that sometimes masquerades as the tech sector on weekends.
Google was unwilling to make the long-term commitment needed to build a business in the sector, while Amazon seemed to lack the consistent vision and high-level support needed to leverage its real competitive advantages to benefit its gaming ambitions.
“The collapse of Amazon's gaming ambitions may be a very timely reminder that there are some things that money can't buy – especially without a consistent strategy for spending it.”
However, at its core, I would say that both failures come down to the same root cause.
The cultures of both companies were simply not conducive to the management style needed to successfully complete complex, long-term, and expensive creative projects.
The intense internal competition that has catalyzed the success of many tech companies is detrimental to the creative industries, where constructive collaboration always produces far better results in the long run than Darwinian competition.
With tens upon tens of billions of dollars currently floating around in the gaming industry for mammoth acquisitions and mergers, the collapse of Amazon's gaming ambitions could be a very timely reminder that there are some things money can't buy—especially without a coherent strategy for spending it.
