Amazon Developing Game Streaming Service

Amazon is developing a streaming service for video games, a development that could well signal the beginning of the end of game consoles.

The streaming service would eliminate the need for gamers to purchase expensive video game consoles or high-end computers to run titles. Instead, the games would run on powerful computers housed in data centers, allowing them to be played on devices with much less computing muscle, such a smartphone or tablets.

The Information first reported the existence of the project and that Amazon has been talking with games publishers about distributing their titles through this game service. It’s expected to launch next year at the earliest.

Amazon did not respond to Deadline’s request for comment, though a person familiar with the matter confirmed the existence of the project.

Game industry analysts have predicted for years that this day would come.

“This is the last real console cycle,” Wedbush Securities game industry analyst Michael Pachter said in 2015, in a speech delivered at the D.I.C.E. Summit in Europe.

Pachter wasn’t saying that game consoles would disappear overnight, but that the market would evolve in the same way that the arcades were eclipsed by the Atari in the 1970s.

The gaming market would expand exponentially once consumers are liberated of the expense of buying a console and packaged game software, Pachter predicted. Game publishers could easily drop the prices of popular games like, say, Call of Duty Black Ops 4 or Red Dead Redemption, see revenues grow because the addressable market would be so much larger. Amazon, he speculated, would power the service.

“This makes crazy sense,” Pachter said. “It is absolutely going to happen.”

That time is fast-approaching, based on The Information’s reporting.

“This kind of “problem” suits Amazon well,” said Patrick Moorhead of the technology analyst firm Moor Insights & Strategy. “Game streaming relies on a distributed cloud model where high performance and low latency are key. Given Amazon’s capabilities with AWS and Amazon’s desire to enable any consumer to consume what they want, when they want, this makes it a fit.”

Amazon isn’t alone in pursuing this future vision. Google last fall announced a preview of a game streaming service called Project Stream which runs on PCs and Chromebooks. Game publisher Electronic Arts announced a new online game development platform and streaming service called Project Atlas.