The hot news this week is about Amazon expanding their existing gaming division with the acquisition of one of the leading indie gaming studio, thus making it very likely that they have a gaming console in the pipeline.
TechCrunch broke the news:
Amazon has acquired a gaming studio called, TechCrunch has learned, and Amazon now confirms. The deal was for both talent and IP, we understand. Financial terms have not been disclosed.
The Irvine, California-based company, founded in 2007 through the merger of two well-known game development shops, The Collective, Inc. and Shiny Entertainment, today employs 75 people who will now become Amazon employees and will continue to operate out of their Orange County home.
Amazon had already been developing games on a small scale; you can find some of their efforts in the Amazon Appstore and in the Kindle Store (yes, the games can be played on the Kindle). But with the acquisition of Double Helix, Amazon is clearly building toward a much larger scale effort in the gaming market.
Double Helix makes a game called Killer Instinct, and they (or the 2 studios that merged to become Double Helix) also made a bunch of great games before that as well as tie-in games for titles like Star Wars, Buffy the Vampire Slayer, The Matrix, and others.
Basically this acquisition is a case of Amazon buying one of their suppliers. Amazon bought Double Helix for the same reason they bought Liquavista, Mobipocket, or Kiva Systems; each company had skills or tech Amazon wanted, so rather than hiring the smaller company Amazon aqui-hired (bought) what they needed.
Or at least it would be a case of Amazon buying one of their suppliers, if not for the fact that Amazon doesn’t have a gaming platform that would merit a studio as good as Double Helix – yet.
That yet is the key detail here, IMO. At this point I would say that it is a near certainty that Amazon is going to release a console / set top box, and I am basing that prediction on Amazon now having a flagship game title with no platform to put it on.
But will it be profitable or even a good idea? That’s another question.
Amazon’s rumored gaming console / set top box last appeared in the news last week, when one gaming blog reported that they had inside sources at gaming studios which said that it existed and was being pitched to said gaming studios.
I covered the story at the time, and in the ensuing debate in the comment section one reader asked whether it was already too late for Amazon. Felix made the point that there were high end and reasonably new consoles as well as much cheaper last generation consoles ($150 Xbox 360, for example) on the market. Also, Amazon’s competitors have a lot of games and established user bases, and that raises the question how exactly would Amazon be able to compete effectively?
It’s not like this is the ebook market, which Amazon effectively created, or the music market, which is sufficiently generic that simply selling MP3 is enough. Console gaming is built on selling consoles, and it’s not clear how Amazon can offer a better value proposition than their competition.
TBH, after Felix laid out his arguments I was half convinced that the console would never see the light of day. It didn’t make any sense once you looked at the state of the market (which I summed up above). But now that Amazon owns Double Helix I am not so sure.
In any case, the usual rule is to wait for a real hardware leak before believing in rumors and that hasn’t happened yet. We also haven’t seen any technical details on the console, so at this point it is little more than an urban legend.