By Wallace Witkowski
Amazon.com Inc. managed to dominate online book sales, then all of e-commerce and cloud computing. Now, the company has found a significant foothold in the next business it has targeted: Videogames.
Amazon /zigman2/quotes/210331248/composite AMZN -0.18% in late September launched its first hit videogame, the appropriately titled “New World,” an explorer-themed Massively Multiplayer Online Game, or MMO, that takes place on a haunted island called Aeternum. In the first weekend of availability, the game brought in nearly a concurrent million players, and roughly the same number of concurrent spectators on Twitch — the live-streaming platform that Amazon also owns — which was the 12th highest viewership in Twitch history, Amazon said.
Like the rest of Big Tech, Amazon wants to own more pieces of the videogame market, the biggest entertainment category on a global basis even before a pandemic-influenced growth spurt in the past two years. Worldwide, videogames are expected to bring in $259.5 billion this year, up nearly 12% from a year ago, according to IDC analyst Lewis Ward.
For more: People are still playing a lot of videogames, but how much?
In a recent fireside chat at the 2021 GeekWire Summit in Seattle, Amazon Chief Executive Andy Jassy said that videogames “could end up being the largest category in entertainment over a long period of time” and that justifies the company’s long-term investment.
Amazon established its “Games” division in 2012, but until “New World,” it was mostly known for swings-and-misses like a 2020 shooter game called “Crucible,” which was seen as a resounding flop. Christoph Hartmann, a former president of Take-Two Interactive Software Inc. /zigman2/quotes/204008930/composite TTWO +0.64% and founder of the company’s 2K Games label, was tasked with leading Amazon’s videogame development studios in 2017, and recently spoke with MarketWatch about what he learned from “Crucible,” where Amazon’s gaming ambition goes from here, and why everyone is chasing Roblox Corp. /zigman2/quotes/223883423/composite RBLX +3.09%
The ‘Crucible’ for a ‘New World’
In his interview with GeekWire, Jassy compared the videogame industry as very much like the movie industry in that it’s “hit driven” and that means being able to move on from failures.
“If you’re not willing to withstand the failures, including the spectacular failures, then you shouldn’t be in that business,” Jassy said.
Hartmann spoke in-depth with MarketWatch about Amazon’s biggest videogame failure, “Crucible,” and the lessons from that game that informed development and decisions surrounding “New World.”
“Don’t ship a game too early, and don’t ship a game when you have a larger-than-life competitor at the peak of its success, which would be [Epic Games Inc.’s] ‘Fortnite’ at that time,” Hartmann told MarketWatch of the lessons learned. “We’re doing a similar game trying to get a slice of the market, but it’s really the winner takes it all.”
“We applied all those learnings on ‘New World’ to really give it the time, we had so many delays,” Hartmann said. Unlike “Crucible,” “New World” is an MMO, more akin to Activision Blizzard Inc.’s /zigman2/quotes/200717283/composite ATVI +0.02% “World of Warcraft” franchise. “We went into a genre which hadn’t seen a big game in a long, long time, so that definitely helped us,” he said.
Shipping a game too early has been a big concern lately for the industry, given last year’s buggy release of the long-awaited and overdue “Cyberpunk 2077” from CD Projekt SA /zigman2/quotes/206478470/delayed PL:CDR +0.57% that forced distributors like Sony Group Corp. /zigman2/quotes/201361720/delayed JP:6758 +1.80% to offer full refunds. In this past year, Electronic Arts Inc. /zigman2/quotes/206954087/composite EA +1.96% has delayed the release of “Battlefield 2042” and Take-Two said expansions of the “Grand Theft Auto” franchise and two “immersive core titles” would be delayed .
Amazon can afford to think long-term
Even though Amazon is a relative newcomer in the games space, Hartmann said it has a distinct advantage over traditional videogame publishers: Since games are not the sole source of income, that allows developers much more creative freedom.
“Traditional publishers, due to being all publicly traded, you think kind of in quarters and fiscal years,” Hartmann told MarketWatch. “Amazon, when they build a new business, especially one like ours where every product takes you multiple years, they think more long term.”