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Amazon isn’t profiting from its games since it set up Amazon Game Studios.
In terms of making a profit from video games, Amazon hasn’t had the easiest time. Amazon Game Studios was created a decade ago, and since then, they have made huge moves to bring games that would catch anyone’s eye. The company hired many veterans in the industry to be studio leaders—like past World of Warcraft game devs—and many teams were built over the last ten years. Sadly, cranking out titles wasn’t as easy as they expected. Ultimately, Amazon Games would either not launch their games or release them in a half-baked state.
Progress Has Been Slow
Amazon established Amazon Game Studios in 2012 to develop games for their exclusive App Store, but in 2014, the unit expanded into the PC gaming market. In addition to that, they also bought Double Helix Games and Twitch—the current top streaming platform for games. Amazon Game Studios has huge plans in the making at first. In 2016, they revealed high-budget titles such as Crucible, New World, and Breakaway. However, Breakaway was canceled in 2018, and Crucible was axed in 2020; New World was the only game that pushed through.
Amazon also struck a deal with Leyou to create a Lord of the Rings game, but Tencent—who recently bought Leyou for $1.5 billion on December 2020—wasn’t happy. They wanted a bigger slice of the pie. Amazon Games bought the rights to Lord of the Rings for $250 million in late 2018, intending to couple an online game to its five-season streaming series on Amazon Prime Video. But in 2021, they canceled the MMORPG altogether.
Amazon’s Burning Cash
According to a report from Bloomberg on January 2021, Amazon spends nearly $500 million a year for its video game division. This amount doesn’t include their number one streaming platform for games, Twitch, nor its cloud streaming service known as Amazon Luna. The company brought in well-known video game veterans, including Far Cry 2 director Clint Hocking and Portal designer Kim Swift since it first set up its operations.
Considering the number of excellent game developers within Amazon Games, it should result in a recipe for success, so why isn’t the company making money off it? The issue lies in corporate culture. There’s a lack of incentives and an internal culture where women are sadly not given the same opportunities as their male co-workers. Moreover, the company is driven by data; employees are expected to document a six-page report just to have their decisions approved by the upper management.
When entering Amazon Game Studios for the first time, the recruits assumed they were about to enter a fantasy land—a place where they could develop the games they envisioned. Lucrative packages were offered within the company, and many were paid double the market rate of other gaming companies in the area. However, they would soon learn that not everything is made up of sunshine and rainbows. Bonuses were heavily based on the commercial and critical response, employees weren’t given much financial incentive to release games, and Amazon’s stock plan only rewarded them for their time in the company. This resulted in most people in Amazon Game Studios prioritizing job preservation over anything else.
The Rise and Fall of New World
You’ve probably heard about New World’s successful release and immediate crash by now. Amazon’s first big launch title had over 900,000 concurrent players at first, but due to it being plagued with balance issues, bugs, and missing content, the MMO currently sits at an average daily player count of 15,000.
The amount of money Amazon Games poured onto New World wasn’t worth it, based on what they got in return. New World has likely burned through at least $200 million during its development if we consider the $500 million that Amazon sets aside yearly. Heck, it could be even more. After all, New World was announced in 2016, but it wasn’t released until September 2021.
Lost Ark is Amazon’s Golden Child For Now
The only bright star at this point in Amazon’s constellation of Games is Lost Ark. Lost Ark has had the biggest MMO launch in recent history, peaking at over 130,000 concurrent players farming Lost Ark gold days after its release. Granted, they didn’t necessarily create the game; Smilegate did all the hard work, and Amazon published it in the West. Still, as it stands, the Korean MMO ranks second to PUBG in Steam’s top player count, and it’s the biggest win the company has had so far.
