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Amazon Fire TV: A "nonevent" for games?

Amazon Fire TV: A "nonevent" for games?

Thu 03 Apr 2014 12:30am GMT / 8:30pm EDT / 5:30pm PDT
BusinessHardware

Analysts chime in on the impact of Amazon's new Android-powered box; most don't think Microsoft or Sony have anything to fear

With Fire TV, Amazon has launched its first box to deliver games to the living room. The $99 Android-based hardware features a quad-core processor, a dedicated GPU and a separate gaming controller for $40. Moreover, Amazon will bring exclusive games to the Fire TV through its first-party team at Amazon Game Studios.

Similar to other microconsoles, the games on the digital store will be either free or quite cheap to purchase, which Amazon hopes will make it attractive to the masses. Amazon has an army of resources and while other microconsoles have failed to become mainstream, it would be foolish to doubt Amazon's potential. Should dedicated console makers like Sony or Microsoft be concerned? The majority of the analysts GamesIndustry International spoke to didn't think so.

Wedbush Securities' Michael Pachter called the announcement a "nonevent," saying Amazon "will not be a player." DFC Intelligence's David Cole agrees.

"Short term they don't have a reason to be concerned but long term it could be an issue. The main focus of the box is streaming video. The issue is video is 1) a much bigger application than games and 2) much easier to do. It is clear games are at best currently a distant after thought for Amazon in terms of the Amazon box. The type of games they are looking at are more in the realm of tablet/mobile/casual products, which are really no substitute for what the dedicated consoles provide," he said.

"Anybody in high tech or in content that sees Amazon jump into their bread and butter market and isn't concerned about what Amazon might be able to do should have their head examined"

Lewis Ward

"So I think right now it is a rounding error in the game industry but that could change if Amazon decides it wants to make a big investment in the space. However, the reality is you really have to very directly target gamers and Amazon right now is only half-heartedly doing that."

Indeed, hardcore gamers won't be passing up the PlayStation 4 or Xbox One for an Amazon Fire TV anytime soon, said independent analyst Billy Pidgeon: "Hardcore games enthusiasts won't be satisfied by this or any other inexpensive television-connected device. Still, Microsoft, Sony and Nintendo are increasingly competing for individual and family entertainment time with interactive entertainment, video and audio available in the home on multiple devices, including smartphones and tablets as well as multimedia boxes that connect to television sets."

Pidgeon conceded that "as more devices can offer games and media, consoles' appeal for the mass market (an important factor in mid-to-end cycle console adoption) is in steep decline." He added that if anyone should be worried now, it should be Apple and Google.

"Apple and Google have been the main contenders for online media transactions, but Amazon has the motivation, the focus and the distribution to move Fire TV quickly into lead position. Apple has competition issues with media providers and Google is behind in online retail and user experience. Amazon's entry into connected TV could energize the competition and speed household penetration," he said.

Asif Khan, CFO of Virtue LLC, wasn't wowed by the Fire TV announcement either. Even with exclusive games - and now Amazon has hired some heavy hitters in Clint Hocking and Kim Swift - he's not convinced that Amazon can disrupt the console market.

"We knew that Amazon was going to enter the games industry, but I am not sure who is going to feel compelled to buy it with a controller that costs 40 percent of the device. The success of the device as a gaming alternative will likely depend on the software that Amazon's gaming studio can create, but we have seen with Nintendo's Wii U flop that first-party content is not enough to get consumers to buy a device," Khan noted.

"There is chance that Fire TV can make some waves if Amazon's partners continue to bring games to the device, but in my opinion this product will achieve limited success," he continued. "It feels like all of Apple's competitors have now shown their cards in anticipation of the upcoming Apple TV refresh. We have seen Xbox One, Chromecast, and now Fire TV. None of these products have wowed consumers and ushered in a new age of how we interact with TVs. This announcement by Amazon today just has me even more interested in what Apple is going to announce this year. Clearly the set top box market has a lot of players and Amazon has a chance to contribute something to that increasingly crowded space. With that being said, I do not think the Fire TV is a game changer for video game consoles. It is a set top box that also plays games, with the potential of asymmetric gameplay."

If the analysts seem overly negative, perhaps they are forgetting about Amazon's web services. The back-end technology could make a difference, said IDC research manager Lewis Ward, who believes Amazon is "absolutely" a contender in the console space.

"Anybody in high tech or in content that sees Amazon jump into their bread and butter market and isn't concerned about what Amazon might be able to do should have their head examined," he commented. "Let's put it this way: Fire TV is by far the most viable microconsole platform out there. Couple that with Amazon's back-end streaming, storage, and game-hosting platforms and developer tools and you've got a serious threat to casual home-based console gaming in particular, at least in North America and pockets of Europe in the next few years."

19 Comments

Richard Pygott Level Designer

40 13 0.3
Amazon are probably best placed to make such a console work, however, products like these never compete with the big 3 and no one expects them to.

What is Amazons vision with this box? Is it tv, is it games, is it streaming? -I know the answer is all 3, but is harder to market something that does lots of things rather than dedicated to one usage.

There is so much choice out there now, particularly in the android micro console space - this will only do better than the others out there due to whos selling it and pushing it

Posted:6 months ago

#1

Adam Campbell Associate Producer, Miniclip Ltd

1,180 967 0.8
What may seem like a non-event today may be a huge event tomorrow. I expect it to be.

Posted:6 months ago

#2

Rick Lopez Illustrator, Graphic Designer

1,269 942 0.7
Honestly I see these devices aimed at none-gamer-types, looking for a quick gaming fix. If anything I would get these devices for kids that dont really cant care for expensive pieces of hardware or sensitive storage media like disks or hardrives.

However most none gamer types, see gaming as casual affair. Unlike the real-gamer, they have no interest in buying, purchasing, collecting or owning anything. They are not game hobbiests. They dont care about the evolution of gaming or the technology or business aspects behind it. They just want to get home and play games as easy as it is to flip on a TV and see whats on. I see this working on a business model akin to netflix and HULU.

As for me I have ZERO interest in the product, however if I had small kids this would be the perfect gaming device. If for some reason my kid got seriously into it, I can consider getting him a game console in order to expirience something much more deeper. But I see these devices aimed more at people who dont play games. there is irony in that statement, but the same can be said when I see people playing candy crush at work. These people have ZERO interest in games. But will play games like candy crush or just to kill a few minutes of there time. And this is OK. I really support products that cater to different peoples needs.

I just go off sometimes when people come and say that their new thing will come to get rid of everything else when i think they can coexist just fine. Because likewise, i have differant needs too. And I really enjoy console games.

Edited 1 times. Last edit by Rick Lopez on 3rd April 2014 5:45pm

Posted:6 months ago

#3

Barrie Tingle Live Producer, Maxis

385 183 0.5
Of course Sony/Microsoft don't have anything to worry about. It isn't targeted at the same audience.
These analysts really know how to make their money telling us stuff we already knew :)

Posted:6 months ago

#4

Brian Lewis Operations Manager, Aeria Games Europe

132 84 0.6
I would expect this to be a market entry device. I do not think we should assume that it is designed to agressively build market share, or that its feature set is going to be unique. Amazon is in this for the long haul, and this is just to put them on the table. I would expect them to refine thier target over the next 2-3 years. It might be that gaming will not work out to be that important to them. Remeber, that all of thier Kindle devices are simply hardware platforms that enable the sale of thier services. I would expect this to be more of the same.

Posted:6 months ago

#5

Alan Wilson Vice President, Tripwire Interactive

29 30 1.0
It is clear games are at best currently a distant after thought for Amazon in terms of the Amazon box
That is probably a bad mistake from Cole. He clearly hasn't been looking at the trailers rolling from Amazon Game Studios already. The difference is that they aren't after "core gamers" first - they are coming in from the consumer end. And there are some good games coming for the platform!

Posted:6 months ago

#6

Greg Wilcox Creator, Destroy All Fanboys!

2,193 1,170 0.5
I'm not interested at all in the Fire, but having Telltale Games on board from day one is a great thing and anyone who buys and plays The Walking Dead who hasn't before is in for a real treat on a few levels. I'm sure Minecraft will get a few more people into it, as it seems to be unstoppable no matter where it appears.

Posted:6 months ago

#7
Android / iOS / Mobile gaming is not for me thanks..

Edited 1 times. Last edit by Pete Thompson on 3rd April 2014 5:41pm

Posted:6 months ago

#8

Christopher Bowen Editor in Chief, Gaming Bus

451 715 1.6
I think Amazon will hit a niche with this. Not AAA gaming, but they will hit a niche.

I imagine the following conversation happened soon after announcement, while the Amazon crew is riding around in a proverbial armoured vehicle:

*THUD*
"What was that we just ran over?"
"I'm not sure, I didn't feel anything"
*looks back* "I think we ran over Ouya!"
"Oh. And nothing of value was lost."

Posted:6 months ago

#9

Nicholas Lovell Founder, Gamesbrief

196 197 1.0
Popular Comment
It's funny. People seem not to realise that the threat to consoles does not come from core gamers switching from Xbox One/PS4 to tablets and microconsoles. It is the non-core gamers switching. The people who buy a game 2-3 years into the cycle. Who buy a few games a year but make an installed base and addressable market that is interesting to third parties.

The threat to the consoles is not the direct switch of fanboys from consoles to microconsoles. It is that the economics of consoles requires a large addressable audience, and tablets/microconsoles will reduce that addressable audience.

Amazon TV is not a direct threat to the consoles. It is a massive, life-threatening, indirect threat.

Posted:6 months ago

#10

James Berg Games User Researcher, EA Canada

170 216 1.3
It's funny. People seem not to realise that the threat to consoles does not come from core gamers switching from Xbox One/PS4 to tablets and microconsoles. It is the non-core gamers switching
Exactly this. Amazon isn't talking to us - they're talking to everybody else. Android microconsoles were a niche marketing to a niche, so were nonstarters. This changes that because Amazon has the user-base, and they're going after non-core-gamers.

People are also seemingly dismissing what I think is Amazon's end-goal, and that's streaming. Amazon has exceptionally strong back-end technology for making this happen, and could be a serious threat in the streamed-games service model.

Posted:6 months ago

#11

Asif A. Khan, CPA Financial Reporter

32 86 2.7
Popular Comment
Insert skepticism towards anything analysts say about anything here

Posted:6 months ago

#12

Neil Young Programmer, Rebellion Developments

302 383 1.3
@James - I'm not sure they will be looking to streaming games - the device has enough horsepower on board for a fairly good selection of games. If the tech is there later on, they may add it (and if it's open third party streaming clients will arrive), but I doubt it's a major concern for them right now. Streaming videos makes sense due to usage patterns and local storage issues that don't apply to games as much.

Edited 1 times. Last edit by Neil Young on 3rd April 2014 7:42pm

Posted:6 months ago

#13

Nick Wofford Hobbyist

180 190 1.1
@Nicholas
Agreed. Just look at (a very inaccurate) informal stat: the Nintendo Wii sold 100 million units. But according to vgchartz, Skyward Sword only sold to less than 4% of Wii owners. I realize that some Wii owners may just not like Zelda, but conventional wisdom online would say that more than 4% of Nintendo owners would want to play a Zelda title. The same holds for most consoles.

On average, console owners will buy 10 or fewer games. That's not the "hardcore" fanbase we tend to think of, is it? I've owned probably 200-300 games for my 360, yet the attach rate for the console is about 12. So for every one of me, there are a ton of people who only bought a handful of games and stopped. These people are the target. They are the ones that Amazon is after.

Posted:6 months ago

#14

Caleb Hale Journalist

155 231 1.5
As a games platform, the Fire TV will have to pass the same smell test as any other console - that is, it will need to have compelling games. The glut of middling performers in the Android-based microconsole space proves it's not enough to stick a controller in someone's hand and tell them, "Here, now you can plan smartphone games on a television."

Right now the Fire TV's audience is the Kindle audience, folks who more than likely own some media content from Amazon services. If Amazon Game Studios has a compelling slate of original content (It's hard to tell from that sizzle reel they released.), the device could pick up some interest from the gaming audience.

Posted:6 months ago

#15

James Berg Games User Researcher, EA Canada

170 216 1.3
@Neil - I think they'd be crazy not to. Streaming is something they're building the device to do, and with it's horsepower, it'll do it well. Like I said, I think it'll come later though.

Posted:6 months ago

#16

Adam Campbell Associate Producer, Miniclip Ltd

1,180 967 0.8
Great comment Nicholas.

Posted:6 months ago

#17

Neil Young Programmer, Rebellion Developments

302 383 1.3
@James : streaming games and streaming video have different requirements though, so the presence of streaming video doesn't automatically allow for games. There's some overlap (hardware decoding), so they'll probably be able to add it later if they want. However, there may not be a need - if amazon is doing well selling local and web based games for it, any demand for streaming titles will be easily covered by 3rd parties, eg onlive or sony.

The device isn't targeting the AAA market, so the need for streaming may just not be there. If it is, then they'll probably support it.

Posted:6 months ago

#18

Kristian Roberts Senior Manager, Nordicity

4 13 3.3
Ok, I was going to say something intelligent, but Rick, Nicholas and others have already beaten me to that punch. However, I'd like to add that one should not EVER underestimate Amazon's ability to hock content (of whatever variety) at people. They have a decent (if imperfect) recommendation engine, enormous purchasing power (meaning that it can out bid little start-ups like Netflix for first-run content), and more cloud processing power than you and your 10,000 closest friends can collectively shake sticks at.

If the goal of the current console generation is to own the living room, a $99 box (+ controller) with access to the above tools, Amazon's entry into to said room is very much an event.

Posted:6 months ago

#19

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