It took Amazon just five years after launching a television studio to win its first Emmy Award. But nearly nine years after launching a video game division, Amazon not only isn’t winning any gaming awards, it’s also struggling to make games.
The e-commerce giant is abandoning plans to develop an online multiplayer game based on The Lord of the Rings, Bloomberg reported this week. Amazon reportedly bailed out the project after a contract dispute with Tencent, the Chinese tech giant that was co-developing the game through its subsidiary, Leyou Technologies.
This is the fifth major Amazon video game the company has canceled or discontinued in recent years. One top title, a free-to-play shooter called Crucible, was dropped after being bombarded by gamers and critics. Amazon moved developers from Crucible to another game, New World, which has been repeatedly delayed. The company’s only major game to hit the market, a racing game based on The Grand Tour TV series, failed so badly that Amazon pulled it from digital shelves a year after its release.
The scale and consistency of Amazon’s video game failures are striking, given the company’s many successes in other areas, from entertainment to cloud computing to artificial intelligence. But due to cultural issues, alleged mismanagement, and strategic errors, Amazon has yet to master the world of video games.
The cart before the horse
Amazon launched its games division, Amazon Game Studios, in 2012. It initially focused on smaller mobile games, before moving quickly to more elaborate (and expensive) PC games a few years later. Since then, the company has worked almost exclusively on big-budget projects developed in-house.
But he probably got ahead of himself. Amazon jumped straight into game development before it really had the infrastructure to do so. Namely, he tried to develop games alongside creating his own game engine – the software and development tools used to power a game – dubbed “Lumberyard,” which slowed down the development process on both. things. And unlike Sony and Microsoft, it doesn’t have its own console company to support first-party game creation.
“They put the cart before the horse,” Wedbush Securities analyst Michael Pachter told Quartz. “They developed non-console gaming capabilities.”
Pachter thinks Amazon will eventually release a console or add gaming capabilities to an existing Amazon device, like the Echo. But, so far, there’s been no indication that Amazon is ready to compete with Sony’s Playstation or Microsoft’s Xbox.
A corporate culture not conducive to gambling
A January report in Bloomberg, published long before this latest cancellation of The Lord of the Rings game, details internal issues at Amazon that have made it difficult for the company’s games division to grow. Amazon’s rigid, data-driven culture, which prioritizes work experience at Amazon over outside experience, frequently clashes with the more creative and lax attitudes that are part of the culture of creators. games, Bloomberg reported.
Mike Frazzini, a longtime Amazon employee who had never helped create a video game before taking over as head of the company’s game studio, reportedly insisted that the company build its own game engine rather than license a more proven engine outside the company. Eventually that policy changed, but not before Amazon wasted valuable time and resources building an in-house engine as its games failed.
Employees said Bloomberg management constantly chases industry trends, which inevitably don’t produce the expected results. Games intended to capitalize on the success of titles like Fortnite, League of Legends and Overwatch have all struggled to take off.
Amazon cares about games, but not that much
Amazon spends about $500 million a year on its games division, according to Bloomberg. That sounds like a lot until you realize that’s roughly equivalent to the amount of revenue Amazon generates in 12 hours. (Amazon’s 2020 revenue was $386 billion, or just over $1 billion a day.) Half-day sales can fund entire video game operations from Amazon for a year.
“It’s a very small piece of their overall vision, but it’s an important piece,” Pachter said. He added that in addition to wanting another company to bolster its Prime subscription offering, Amazon got into game development in part to build on the success it had in the space a while ago. decades as a retailer.
Even the company’s now-defunct Lord of the Rings game was only meant to be a compliment to its upcoming Lord of the Rings TV series, which it had already spent nearly $1 billion on before. broadcast of a single episode. The series will move forward without the accompanying game. Until Amazon treats its games the way it treats its TV shows, it may never experience the success it desires.
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