Amazon is one of the leading tech companies in the world. From shopping to health care, Jeff Bezos and his organization have been at the forefront of most technological advancements in the last decade. However, for all of its strengths, the one area Amazon hasn’t nailed down is gaming. If its rumored purchase of Electronic Arts goes through, that would all change.
Amazon has been trying to break into video games for a while. Even with all the money and resources at its disposal, there’s always been something lacking from its previous efforts. Rather than fighting an uphill battle, Amazon has reportedly been exploring the acquisition of different studios, the most prominent being EA. With the upheaval in the gaming industry recently, EA and Amazon joining forces could prove to be mutually beneficial.
Amazon’s Current Gaming Offerings
There are currently two different gaming services that Amazon offers. The first is Prime Gaming, an add-on to Amazon Prime. Amazon Prime subscribers get free monthly games and exclusive in-game content on many free-to-play titles through Prime Gaming. Additionally, customers get free monthly access to the Twitch account of an Amazon partner and all the perks that come with a paid subscription. For any streamers, Prime Gaming also stores Twitch broadcasts for 60 days instead of the standard 14.
Amazon also owns Luna, a cloud gaming service similar to Google’s Stadia. Cloud gaming has become a great resource for players with high-speed internet access but no PC or console. For a low monthly cost, Luna customers can subscribe to channels on the Luna service, or purchase titles individually. With no need for a console, Luna is an excellent low-cost option for gamers, though it hasn’t grown as fast as Amazon would like.
Most importantly, Amazon has already seen firsthand how lucrative gaming can be for its business. Amazon bought Twitch for $970 million in 2014, and as of 2021, makes around $2.6 billion a year in revenue. While its other services haven’t taken off, Twitch has single-handedly made Amazon one of the most financially successful gaming companies in the world.
The Impact of Amazon Buying EA
For all of its flaws, EA is still one of the biggest players in gaming. From FIFA to Battlefield, EA’s collection of franchises is unmatched. The concern for EA is not sales, but rather how it will keep up in an increasingly competitive environment. There are more game developers than ever before, and many have the ability to usurp the current leaders in the industry. As time has gone on, EA has been either unwilling or unable to adapt.
Complaints about Madden have persisted, with each yearly edition seeming worse than the last. Apex Legends, on the other hand, has emerged as one of the most popular competitive games but has seen a concerning increase in hackers and bots as time has gone on. Making a flawless game is impossible, but EA has been relying more on its established brand to drive sales, rather than making its titles better.
There are countless logistical hurdles to go through for a purchase of this magnitude, but it’s easy to see how Amazon could help EA overcome its issues. With all the money at Amazon’s disposal, it could pour a huge investment into EA’s game development and maintenance. As one of the leaders in cybersecurity, Amazon could also make those resources available to EA to fix Respawn’s hacking issues. To enhance its current offerings, Amazon could offer EA Play as a free bonus to Prime Gaming or Luna subscribers, similar to EA’s current agreement with Xbox Game Pass.
Investors have already seen the benefit of a potential acquisition. In the wake of the rumors, EA’s stock price soared in anticipation of a monumental Amazon purchase. With the size of each company, the move still feels unlikely. However, Microsoft’s acquisition of Activision Blizzard proved that anything is possible in this rapidly changing landscape.