Amazon’s multibillion-dollar gaming experiment? It’s just getting started

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Hello! This week in Protocol Gaming, your weekly guide to the business of video games: What Amazon can learn from the failure of Crucible, why Roblox might be justified in shooting for an $8 billion valuation, and Phil Spencer tells us what he's playing right now.
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The first, troubled era of Amazon's foray into the video game business finally ended Friday night.
That's when the company pulled the plug on Crucible, the multiplayer shooter that was supposed to carry Amazon to the highest echelons of the game industry. Instead, Crucible was announced, delayed, released to widespread yawns, yanked off the open market, returned to "closed beta" and then completely canceled.
Until now, Amazon has been trying to make games that show off its technology, rather than see its technology as a tool to make great games.
So it's time for something to change, and I believe that Amazon will figure this out.
It is far too early to call Amazon Games a multibillion-dollar failure. Nothing in the Crucible cancellation announcement mentioned layoffs. Instead, the company said the Crucible team would move to help with New World — a promising massively-multiplayer fantasy game being developed by Amazon's Irvine studio — and other projects. The experiment is still in progress, but it clearly needs to move to Phase 2.
But what about AWS? What about showing off all the amazing futuristic experiences that only the power of cloud computing can enable?
In last week's Protocol Gaming, we advised you to keep an eye on the huge online spaceship battles brewing in Eve.
If Amazon wants to show the world what AWS can do for games, the company could buy one-third of CCP from Pearl Abyss for $200 million. (Pearl Abyss bought the company two years ago for $425 million.)
And if Amazon doesn't do it, Microsoft should, because the top end of gaming won't always be just about Sony vs. Microsoft. When it comes to sheer technical power and financial resources, Sony won't be able to keep up with Xbox.
So even as Amazon shuts down Crucible, the strategic opportunity that gaming represents for the company remains clear. From its new cloud gaming service Luna to AWS to the next era for Amazon Games, expect the House of Bezos to learn from its failure — and move on quickly.
— Seth Schiesel
Make next level games with Microsoft's own AAA-grade development toolbox, including the battle-tested solutions of Azure and PlayFab, powering some of the world's biggest games.
Back in June, Roblox Chief Business Officer Craig Donato told Protocol that an IPO probably wasn't in the company's "immediate future." Cut to four months later, against the backdrop of a booming public listing market, and minds have changed: The company announced yesterday that it's confidentially filed for a listing.
The change of heart isn't too surprising. Back in June, people still weren't sure how lively the public markets would be, even for stay-at-home beneficiaries like Roblox. Since, we've seen a torrent of successful listings. In particular, Unity might have inspired Roblox with confidence: The game engine's stock has almost doubled from its IPO price.
Investors tend to love businesses like Roblox. More than a game, Roblox is a platform for other developers — similar to the App Store or Steam, but with a whole game engine bundled in. But while Apple and Valve take a roughly 30% cut, Roblox keeps over 50% of money spent on its platform (something developers aren't always happy about). Given the company has said it expects to pay out over $250 million this year, that means it might have revenue of over $500 million. Suddenly that $8 billion valuation looks pretty reasonable.
Still, the devil's in the (financial) details, and those are still under wraps. If Roblox decides to pursue its listing, we'll see its full financials in the coming months. But there's no guarantee: Roblox may yet decide to pull the plug, especially if a tumultuous election upsets markets.
— Shakeel Hashim
Every week we'll ask a leading industry figure five big questions. Phil Spencer, Microsoft's game chief, is getting ready to release new versions of the Xbox next month, even as the company begins to digest its acquisition of ZeniMax Media and Bethesda Softworks.
What was your first gaming system?
Pong. And if that doesn't count, Atari 2600.
What is the most important trend in the game business in 2020?
Focusing on players and a future that centers on them, where gaming transitions seamlessly across devices and delivers the best fidelity experience for each, whether that be console gaming in the living room or mobile game streaming. Going forward we expect our games, our in-game progress and our friends follow us across screens – including consoles, PCs, phones, tablets, and more.
What has been the most overlooked aspect or development in the game business over the last year?
Maybe not overlooked, but certainly remarkable, is the many ways people have turned to games this year. Games have kept people connected, they've helped raise awareness around important causes and charities, and they've provided familiar places for people to escape to. People have been using games in creative ways due to the circumstances we find ourselves in, and I love that. Minecraft being used for graduations, or Gary Whitta's talk show Animal Talking are great examples of that.
What new technology or technical development are you most looking forward to?
I continue to be inspired by how the accessibility of creation tools, distribution and platforms has allowed so many new voices to tell their stories through video games. We have more games in development now, as an industry, than any time in our history. And that development comes from places that even 10 years ago had no game developers. So, the technological advancements that leads to the democratization of creation and distribution would be my answer.
What games are you playing recently that don't come from your company?
I play a ton of Destiny 2. I've been playing Elder Scrolls Online again; I'm amazed at the amount of content in that game. I played some Marvel Avengers, Drake's Hollow etc. I play a ton of different things.
My Oculus Quest 2 just arrived this morning, and by the time you're reading this I will be firmly strapped into the virtual world. I'm looking forward to the London Film Festival's "Expanded" strand, which has a whole range of interactive VR experiences available to try. It's all free, and you've got until Sunday to try it out.
— Shakeel Hashim
Make next level games with Microsoft's own AAA-grade development toolbox, including the battle-tested solutions of Azure and PlayFab, powering some of the world's biggest games.
Thanks for reading. Tell your friends and colleagues to subscribe here, and send tips, feedback and ideas to sschiesel@protocol.com and shakeel@protocol.com. See you next week.