Amazon’s (AMZN) new patents outlining the development of a video game distribution platform, hint that the tech giant may finally be ready to take on Steam in the digital video game distribution market.
A research report from Forecasting and Analyzing Digital Entertainment (FADE) estimates that Steam, Valve’s online video game retailer, made nearly $1 billion dollars in revenue in 2010. According to Steam Spy, sales are estimated to have swelled to as much as $3.5 billion dollars in 2015. With an average revenue growth of 70% year over year, the online video game distribution market has become an attractive investment toward new entrants, like the online sales giant Amazon.
Fresh off the acquisition of popular video game streaming site, Twitch, for $970 million, Amazon seems to be setting the stage to expand its online empire into the video game marketplace. Amazon’s patents(us20170001111a1) describe a user interface that can be used to “order, purchase, or otherwise obtain demo or full versions of games”. In addition the patent outlines a “spectator UI” that can be used to “view broadcast streams, join live game session and start new game sessions”.
There have been rumors of Valve turning down large acquisition offers; Valve has confirmed they have received interest in the Steam platform before. This isn’t the first time Amazon has gotten into the ring with a firm that wouldn’t sell out. Before acquiring Zappos.com, the online shoe retailer, in 2009; Amazon’s offer had originally been rejected. In retaliation Amazon launched Endless, an e-commerce site the specialized in shoes and accessories, which never really took off.
Entering the online gaming market seems like a move right out of the Amazon playbook. They have the resources to become a major competitor as they have in the music, movie and TV markets. Amazon has set the stage to acquire a major foothold in the digital entertainment industry from production to distribution to broadcasting.