Online retail giant Amazon announced a pair of game developer tools this week. One service, called Lumberyard, is a game engine and developer environment built around Amazon Web Services’ cloud computing environment that developers can use for free. The other, a cloud-based game hosting service called GameLift, may be downplayed in press coverage because it’s buried in Amazon’s press release. But don’t sleep on GameLift, says one game industry expert, because its introduction may wind up being one of the more significant pieces of gaming news in some time.
GameLift could represent Amazon’s play for a whole new gaming marketplace—or two.
“Amazon may be trying to create their own little section of a blue ocean, because the rest of the game market has become so much of a red ocean,” says Michael Sellers, professor of practice at Indiana University’s Media School. Sellers refers to industry shorthand for saturated and already shark-infested waters (red ocean) and new marketplaces in which there are as yet no clear winners or losers (blue ocean).
Amazon designed GameLift, as its press release notes, “to host many different types of shared, connected, regularly-synchronized games including first-person shooters, survival & sandbox games, racing games, sports games, and MOBA (multiplayer Online Battlefield Arena) games.”
Sometimes called e-sports games, the emerging market GameLift serves represents a kind of virtual arena in which whole teams of players can go up against whole teams on the other side. What’s more, thousands or even millions of spectators can not only observe but also interact in creative ways that the best e-sports game designers will no doubt exploit in ways we may not even be able to imagine today.
“It allows for active [spectatorship] as well, so people feel like they can root for their team,” Sellers says. “The growth in [e-sports] is projected to just skyrocket.” In South Korea, for instance, e-sports tournaments in the game League of Legends are a national pastime; the country’s top players enjoy the cultural status of rock stars.
Yet, today, South Korea’s e-sports obsession makes it an outlier compared with many other countries around the world. Sellers predicts, however, that in this sense, the rest of the world may look more like South Korea in five years’ time.
“[Setting up these services] puts Amazon potentially in a very good position,” he says. “There’s the old saying that in a gold rush, you want to be the one selling shovels. This is them, manufacturing really good shovels.”
By contrast, Sellers says, the ocean of mobile games is crimson red. Every day, he says, some 500 new mobile games are placed on the virtual shelves at the Android or iOS App stores. And while the top 10 games frequently rake in a million dollars or more in revenue per day, the average mobile gaming company experiences practically none of that financial downpour. The differences are stark: The tenth-most-popular game might bring in $150,000 per day; the game at 100 on an app store’s most-popular list could enjoy a $15,000 daily take. But from there, the revenue cliff drops off even more precipitously, and there are thousands of games.
“I think the combination of Lumberyard and especially GameLift may give people who make a particular kind of game—the sort-session, multiplayer, e-sports–like games—a new avenue from which players can discover their games,” Sellers says. “And discoverability is where it’s at right now. That’s the pain point.”
The two new Amazon game developer environments also seem well suited for the high-throughput and low-latency-time intensive computing environments for virtual reality games—the kinds for which Oculus Rift and other VR headsets will serve as the platforms. And that too could be another blue ocean that Amazon is looking to colonize with this announcement, Sellers says.
If the name of the game in a gold rush is selling shovels, there are few shovel makers in either e-sports or VR gaming capable of competing with the online retail megalith.
“With the kind of breadth that Amazon is providing with this… they have unassailable advantage if they price it right,” he says.
So for game developers and game consumers, Amazon’s news this week might not change the gaming world overnight. But it might well be a force for democratizing gaming by providing scalable servers and development environments that scrappy game startups can set up on the cheap so they can ramp up to Candy Crush levels—if they’re ever so lucky as to have a hit on their hands.
“They’re playing a long game here,” Sellers says of Amazon’s strategy. “If your time horizon is six months to a year, this is not really relevant. And it’s not going to cause anyone to stop their development and jump over to what Amazon is doing. On the other hand, if your time horizon is two to five years, this is going to be really significant. I would not bet against Amazon on a five-year time scale.”