Amazon – Curse of integration

Reply to this post

Amazon still misses the wood for the trees. 

• Twitch has announced that it will be acquiring Curse which further underlines how disparate and independent Amazon’s properties are and how far Amazon is from becoming a real ecosystem.
• Twitch is a website that streams gaming videos and has created a community around that with 100m monthly active users (MaUs) of whom around 10% visit every day with an average engagement time of 2hrs.
• Curse is a games company that sells software that allow game creators to easily add communication functions for players to their games.
• In essence Curse has tools that can help turn a standalone game into a multiplayer community.
• This is exactly where Twitch has gone with its website and it has been very successful at creating a thriving community around computer game video feeds.
• Consequently, this acquisition makes sense for Twitch but it throws into sharp relief how its owner Amazon, has no real understanding of the ecosystem and the opportunity it is passing up.
• In developed markets, the Digital Life pie is dominated by Gaming but it is the one segment that is completely unoccupied.
• All of the other segments are dominated by at least one major player but Gaming is completely vacant.
• This is because both of the two major developed market multiplayer gaming communities Xbox Live and PlayStation Network have completely failed to create any traction in Gaming on mobile devices.
• I have long believed that this is why Google wanted to buy Twitch, why Activison bought King Digital and why Tencent has purchased Supercell.
• With Twitch sitting as part of Amazon, it is being completely left to its own devices meaning that it is making no effort at all to conquer the last great wilderness of mobile or even doing anything with any of Amazon’s other gaming assets.
• Twitch has all the elements required to begin developing a thriving multiplayer based gaming environment for mobile devices, which is exactly why I think Google wanted to buy it.
• However, Google understands the importance of integration to create a seamless experience for users and consequently required that Twitch become fully integrated into Google.
• Amazon clearly does not which is why it has been happy to allow Twitch to take the money but carry on doing its own thing as if nothing had happened.
• In the meantime, a vast opportunity is being left unaddressed which gives both Activision and Tencent a shot at creating a thriving multiplayer gaming environment on mobile.
• If I thought that Amazon had a chance of capitalising on this opportunity, I could be more forgiving of its valuation which I think still needs to come down quite some way before I can get interested.
• I prefer Microsoft, Baidu or Samsung.