The Amazon: A new competitor enters the console arena!

For what its worth, I still think this rumor is bullshit, and will continue to until I see Amazon confirm it.  But, since VG247 and Destructoid ran it, here we go:

Rumor has it there's a new console in development by Amazon.  It's supposed to come out just before Black Friday (the Friday after Thanksgiving, for those who don't know), and it's supposedly a serious gaming console, with the ability to pump out next-gen-level graphics.  It's also rumored to be "core-oriented", which...well, let's just get into it.

There has never been a legit "fourth pillar" in console gaming.  Usually the competition is between two (Sega and Nintendo), and lately we've gotten used to three (Sony/Nintendo/Microsoft), but four is pretty much unheard of.  And with good reason: it's incredibly difficult to break into console gaming, and it will only grow moreso as time goes on.  As tablets and smartphones become more powerful and more widespread, console developers appear to be fighting over progressively smaller pieces of the pie.   Now, admittedly, right now that pie makes more money than Hollywood does in movies, but that's besides the point.

It's very strange to get involved in console gaming now, considering the number of people that believe this will be the final generation of consoles.  The general perception is that between now and 2019 when we would see the (next) next-gen, some sort of technological breakthrough will occur either in tablets or some new technology that will render consoles obsolete.   Of course, that's just merely speculation and no one knows the future.

Still, even if you assume we'll see a PS4, Nintendo's next console (which is a almost given considering the cycle it put itself on), and the XBox 1.7, this is still a puzzling action from Amazon.  The only company that consistently makes money from gaming is Nintendo, and their reputation with gamers is...less than stellar.  But even still, there are other hurdles that you will have to conquer:

Price: In truth, this is actually the second most important hurdle, but there's a reason I'm placing this first.  If your console is, for instance, $250 with $30-40 games that are...not even PS4/XBO quality--just superior to the Wii U, literally everything else becomes irrelevant.  We're still in economic recovery mode, so even for those of us who are able to buy a new console, price is a crucial factor.  No one is happy with the way gaming is going right now, with gaming consoles seemingly stuck at $300+ pricing and games $60 with more DLC than anyone cares to think about.   If you made this a non-factor, you could become relevant off this point alone.

...But the reality is, the next Amazon system will most likely be $400-500 (I'm hearing $500), with the same $60 games everyone else has.  (Or maybe not with the games--we'll come back to that.)   This will put you in the same spotlight as Sony and Microsoft, so let's move on to the second hurdle, which is really the most important one.

Negative press didn't stop this from helping to break pre-order records.

Brand Loyalty: Arguably, console gamers are potentially the most loyal customers in the consumer-focused business.  Why do you think gamers with pockets deep enough to afford 70" projector screens still won't simply switch over to PC?  

Here's the extent of the brand loyalty Sony and Microsoft enjoy: Prior to E3, Microsoft had adopted one of the most anti-consumer stances on video games most people have ever seen.  It cost people jobs, and set the entire gaming section of the internet afire with mostly negative publicity for the company.  In spite of this, and having a system that was $100 more expensive than the PS4 (which would accomplish largely the exact same functions), the XBox One still received tons of pre-orders.  This is the loyalty that console owners show--that they are willing to support a business at a detriment to themselves.   That's what you're going to have to compete with.  And there's really only one way to overcome it, which is your third hurdle.

If you come out with something looking like THIS, you're good.

Games:  This is why the Ouya failed, and this is why the Wii U is failing. (It's also why I'm suspecting this to be a AAA console and not another "indie box".)  If you cannot show a gamer a reason to buy your console over the others, then you will fail.  You know how I mentioned brand loyalty being a problem, just a second ago?  Well, this is how you develop brand loyalty.  You create titles that are associated with your brand, that can't be obtained anywhere else.  You can't get by on merely releasing third-party games--you need your own studios, and this is another reason why I suspect its a AAA console, since the rumors claim they've been snapping up studios known for big-budget titles.  Every genre has a dedicated following of gamers, and to raise both brand awareness and create brand loyalty, you need to appeal to all of them.   Not just sports fans, not just FPS fans or MMO fans, but racing gamers, action gamers, RPG gamers, adventure, survival-horror, and even indie gamers.

This is where pricing can again come in handy, because there's something no one's talking about, just yet: distribution.   Aside from eBay, and perhaps Overstock, Amazon is the single largest digital store on the web.  If it wanted to, it could try and fight for space on GameStop and Wal-Mart shelves, but what if it's aim is digital?  Amazon has had a download service for years, and by now they have to have worked most of the kinks out.

Remember: people own smartphones, so don't specialize in games like this.

What if they took advantage of their deep pockets to market to gamers an all-digital distribution system, selling AAA quality games for half of what you pay at GameStop?  Take it a step further and say they decide to distribute physical copies: They already have their own warehouses and are known for selling things at lower costs--so what if they did the same with games?  Offering you physical discs but for $20 cheaper than your typical AAA title.   With the name brand power they have, they don't need brick-and-mortar shops and could make a name for itself being the "internet system".

Either way, if the rumors are true, The Amazon (which is a cool name for a system now that I think about it) game system will get attention just by virtue of being the "fourth pillar" in consoles.  It's something new; at least, for the first year or so. With that in mind, there's one thing that will instantly put you ahead of the pack in terms of what the other systems have to offer: a good launch day.

Sony and Microsoft both have pretty awful launch day games, with most of the AAA titles people are excited about not coming until late Q1 2014 or beyond, most people are buying the next-gen consoles based off hype alone.  If The Amazon (calling it that until it gets a name) can put a console on the shelves, even five games that are AAA quality and are unquestionably next gen (not cross-gen)?   With each title appealing to different fanbases (a good FPS, a good RPG, a good racer, sports games, etc.), they could easily carve out a nice piece of the market share, and possibly even get a few PC fans interested, depending on the level of technology they display. 

For now though, let's just hold off and see what happens next.  It's very curious that for a system claiming to appeal to "the core" and coming out in around 90 days, we haven't heard a peep from them at E3, nor heard of a showing at gamescom.  If it exists and isn't something some troll made up, they've got a very strange marketing plan.  Within the next two months we'll know for sure.


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