Amazon Flexes Online Distribution Muscle

Did you hear the big cheers this week? It was the sound of Amazon fanboys (and girls) rejoicing for never having to leave the site now that Amazon has released over 600 casual games for purchase.

I asked an Amazon enthusiast what he thought of the latest venture for the online sales giant and his response was, "Great! I already buy everything on there so now I can even get my casual games." With Amazon's purchase of the portal Reflexive Entertainment last year, speculation in the game industry has mounted over Amazon's plans for games. This past week, the industry learned of Amazon's initial plans and realized that a formidable competitor has entered the ring.

Once you get past all the excitement, there are a number of good and bad things associated with this new offering. More importantly, there are some interesting opportunities.

For online marketers, Amazon's move shows the power of casual games. If some of the opportunities outlined below materialize, online marketers would be able to potentially leverage Amazon for online banners, sell products and branded games, and forge partnerships to cover costs of games, and more. It could make for interesting marketing packages given the resources Amazon would hold.

The Good

  • To quickly acquaint consumers with the games download service, Amazon initially offered the full version of three games for free download: "Jewel Quest II," "Build-a-Lot," and "The Scruffs." As any gamer will tell you, the only thing better than games is free games. There's no better way to kick off a new service than to garner a little gamer goodwill.

  • The introduction of the game download department seems to be a perfect fit for the Amazon consumer. Having a familiar process already used in its MP3 download department and providing easy-to-play, addictive casual games seem to be a formula for success. As my focus group of one Amazon enthusiast agreed, the new addition gives consumers one more reason to stick around Amazon.

  • The games are moderately priced for casual games. Every game is under $10 with two sub-groupings of game at the $9.99 and $6.99 price points. Each game comes with the free trial option, providing the gamer with a limited amount of time with the game before making the final purchase decision. The process and price point are similar to those of comparable gaming sites such as Yahoo Games, which has proved to work for most casual gaming sites.

The Bad

  • A quick glance at the games library reveals that no games from leading casual game provider PopCap are available. When asked about Amazon's leap into the casual game business, Garth Chouteau, spokesman for Seattle-based PopCap Games, told Ars Technica: "It makes sense for them to make game available to the millions of people who visit their site." He also added, "It seems quite likely that we will be able to count them as an online distribution partner, in the way we do a Yahoo games or a Real Arcade." Popular PopCap titles, including "Bejeweled" and "Zuma," may be available on Amazon in the future. Unfortunately they weren't included at launch.

  • Amazon's initial focus is on download and play games. It doesn't offer any online, in-browser games for trial or even pay-to-play. While the size of the download is rather small, some consumers remain hesitant about downloading software to their machines for various reasons (e.g., shared computers, security concerns, etc.). By no means will this crush the service's potential, but it would've been an appealing additional feature to have in-browser games available in the library at launch.

  • The beta service is only available for PC users. Mac loyalists will have to wait for a subsequent release before getting their hands on Amazon's games.

The Opportunity

  • Amazon's effort signifies a major step in the movement to digital distribution in the games industry. The online sales merchant has made significant revenue from the gaming industry's traditional software sales, but the addition of a content distribution service signals the importance of this approach. While Valve's steam is considered the gold standard in digital distribution for games, the reach and influence of Amazon could be quickly raise the importance of digital distribution for all game developers.

  • With the core game sales and casual game download service now becoming neighbors on Amazon, it's only a matter of time before the two join forces, allowing all gamers to receive their game of choice through the Amazon pipes. With examples such as other download distribution approaches -- such as Amazon's Kindle book service and the partnership of Netflix and Xbox -- it appears the next step could be an alliance between leading console providers and online retailers such as Amazon, bringing innovative purchase opportunities to consumers.

  • Building on its established audience, Amazon could become the go-to destination for game downloads with the right mixture of exclusive games. Major casual game portals are definitely taking note of Amazon's entry into the business.

Time will reveal whether Amazon's new casual game service becomes a success. The games industry will be watching whether Amazon can leverage the opportunities and access what impact it has on the larger games landscape. I'm sure it's only one click away. via ClickZ

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