The gaming industry is hit by another wave of layoffs. This time at Amazon: the corporation decided to lay off 14,000 employees in the game department, and stopped supporting a number of projects, including MMORPG New World. Gamesindustry.biz portal speakIt's unfortunate why the outcome of this event didn't shock anyone.
Mass layoffs at Amazon's games division have been happening for a long time. That's right, the games from the corporation's in-house studio are created by talented people who have done an excellent job. But from a strategic standpoint, Amazon's attempt to get into the gaming industry was a downright comical mistake. The world's largest cloud server operator has never been able to realize its market advantage or develop a long-term strategy. The gaming division only exists because of Amazon's incredible strength and growth as a corporation. It is only because of this that it has been able to survive many restructurings, redirections, product cancellations and management changes.
At the same time, despite making huge investments and spending a lot of time, Amazon cannot boast of any results. Of course, this corporation is by default one of the largest game retailers in the world, but this optimistic publisher did not benefit from this. In fact, the company's performance was so bad that even former Prime Gaming vice president Ethan Evans publicly admitted failure. Amazon has been unable to shake Steam's dominance in digital PC game sales.
The public reaction to this admission was mostly surprise because no one knew that Amazon was trying to compete with Steam. Publishers' decisions are sporadic and short-sighted.
In fact, Prime Gaming already offers a set of free games to paying subscribers, but it's unclear what percentage of users are aware of this bonus. Additionally, subscription games must still be activated on third-party stores like GOG or the Epic Games Store—they have not been added to any Amazon libraries.
The Prime Gaming platform fluctuates between subscription and subscription-only gaming services offering all types of bonuses for popular F2P projects. It's now part of Luna's game streaming service, though the average Amazon customer is unlikely to know they both exist — or that they've actually now been merged into one.
By comparison, the company approaches Prime Video completely differently. Streaming media seems like the company really believes in it and supports the project even at the highest management level. Even when he spent billions on Lord of the Rings TV shows that no one asked for.
Whenever a user searches for a movie on Amazon, the site returns results from Prime Video; To buy a DVD or Blu-ray, you need to click through a series of windows informing you that the content can be viewed for free, rented, or purchased on the streaming platform. But if you search for a game there is usually no similar redirect to Prime Gaming. Because of this, sometimes you can even accidentally buy something that is already available for free in the catalog.
At the same time, the failure of Amazon's gaming division can hardly be blamed solely on strategic mistakes. Establishing a new publishing house is an extremely difficult task, far beyond the capabilities of a corporation. The reality is that some of Amazon's games, like New World, have done quite well and attracted a small but still worthy of praise. The only pity is that this is not enough for a commercially viable business.
It would be more appropriate to view the collapse of the publishing dream as a structural failure – individual senior managers made questionable decisions, but that was not the only problem. A company's size, finances and technological advantage are not enough to achieve success in what is essentially a creative industry that sometimes only pretends to be part of the technology sector. Google also abandoned its gaming plans – the company was not ready to devote the necessary time and resources to them. In contrast, Amazon lacks a clear vision and top-level support for initiatives that would allow it to exploit its corporate competitive advantage to benefit its gaming ambitions.
Although, in a sense, both of these cases stem from the same problem. The cultures of both corporations were simply not compatible with the management style needed to create costly and long-lasting innovative projects. Many tech companies are fiercely competitive internally, while the game requires constructive teamwork.
