I took my son to a local theme park yesterday, and there is an attraction inside the theme park with animatronic dinosaurs. Seeing the dinosaurs costs $10 extra on top of your park ticket, but we went into the gift shop that's near the exit to look at fun dinosaur stuff. My son remarked that we didn't have to pay to get into the store.
"No one wants to pay money to be able to spend more money," I told him. No one is selling tickets to a gift shop.
Amazon has announced a new phone. It's time for everyone, including gamers, to become very, very scared.
Buying the future
Amazon, at its core, is a company that has an insane amount of resources and is effectively trying to buy the future by selling you as much as it can as effectively as possible. The company's original goal, to sell books, now seems impossibly quaint.
Amazon wants to be the company that sells you everything, and it doesn't really care how you get that book, whether it's a physical object shipped from its warehouse or a digital product downloaded onto a Kindle. It just want to sell it to you. Amazon is so effective at selling people things that when its service that gives you "free" shipping upped its price by 25 percent the majority of customers merely shrugged and said "still worth it."
Amazon is a company that wants to buy the future by selling you as much as possible
This is a company that is selling many families nearly everything they buy, from televisions to toaster ovens. My family "subscribes" to things such as energy bars to laundry detergent. All our non-perishables arrive twice a month in a nice, large box. We do grocery shopping for fresh food, but Amazon has designs on those dollars as well.
Amazon brings in a lot of money, but the company seems unconcerned with actually turning a profit. Competition with Amazon is a brutal, losing game: Never pick a fight with an entity that can bend the USPS to its will and doesn't care about turning a buck into a buck twenty.
While online pundits will clamor for open ecosystems, the market itself loves a walled garden, and Amazon has seen great success at taking Android and surrounding it with Amazon-branded walls. Amazon wants to control how you buy everything, even if that means making hardware to make buying those things easier, whether that's a tablet or an e-reader. And now, we have a phone. A phone that is little more than a store.
And that's what's so creepy about this whole thing: The phone is designed to sell you things. To sell you books and music, all through Amazon. You get a year of Amazon Prime when you buy the phone, so you won't pay shipping on the things you buy through the phone. You can get your video content through Amazon and watch it on the phone, and of course music. I guess you can call people on it, but the important thing is that you can buy things on it. You can buy things from Amazon.
The phone is selling you a product, and the product is shopping itself.
You can take your phone into a store and show it things, and it will tell you how to buy that thing on Amazon. It can listen to what you're listening to, and show you how to buy that song on Amazon. Let's not forget that Amazon has its own app store on Android.
Apple at least makes a token effort to sell its devices as means of creation, while Amazon doesn't even pretend to care about what you can make. This phone is a consumption device, and Amazon is happy to sell you everything you want to consume.
The phone is an attempt to see if Amazon can lock its most dedicated customers into yet another layer of its ecosystem. The company doesn't really care about profits, remember? It cares about getting you to consume as much as possible, and to make sure you're consuming through its services.
Why am I reading this on Polygon?
Because what Amazon does as a company matters to gaming, and we've already learned from HBO that if you want to understand content, you have to understand the ecosystem in which it exists.
Hell, Amazon Prime subscribers get HBO content, which is a move that would have seemed impossible a year ago, and is a major coup for the company. During E3, your Prime subscription suddenly came with a music streaming service.
The phone is selling you a product, and the product is shopping itself
Amazon has been making serious hires for its gaming division, including Kim Swift, Clint Hocking and Halo writer Erik Nylund. The Amazon Fire TV console has a special controller for gaming. Amazon already sells an incredible number of games online, and can ship you the physical product or just deliver a download code.
I purchased Titanfall on the PC through an Amazon sale and put the Origin code into my PC and downloaded the game. There didn't need to be a middle-person in that transaction, but Amazon was offering the game at a much lower price than EA, even though EA was selling the product directly to the player.
With this phone you could go into a GameStop, show the phone a game's cover, and buy it from Amazon if they have a better price. You could see a better price online, buy the game from Amazon, get the code, and begin the download remotely if you have the necessary apps all lined up. In this scenario Amazon has shoved itself between the gaming retailer and the customer, and there's not a damned thing GameStop can do to fight back.
Well, other than making sure the prices are already lower than Amazon, but that's a losing fight for a brick and mortar store that has to pay for its own overhead and requires a profit. Video games are just as important as movies, television and music for any company that is trying to control how we consume our content, and Amazon is already laying the ground work to move into that neighborhood. Hell, it already has a nice set of condos in that area.
You can't talk about the business of games without talking about how and where those games are sold, and that conversation is impossible without bringing up Amazon.
Amazon is coming for you
There is no business that sells a product or any type of content that shouldn't be scared of Amazon right now. The company has the guts, cash and lack of care for profits necessary to come into nearly anything it wants and move in. If you fight Amazon, it will fight back. And now it has a phone that acts as an amazing sort of middle finger to every brick and mortar store in the country.
If you have this phone, no matter where you go, you are an Amazon customer. Everyone else is just a showroom.
If you sell anything, anything at all, you should go to bed asking yourself what you would do if Amazon moved in, sat down and fought you without needing to make a profit in the short- to medium term. How are you going to handle customers bringing this portable Amazon device to your store?
Amazon has its fingers everywhere and doesn't need to turn a profit anywhere
Gaming is a notoriously hard business in which to turn a profit in the best of times. Microsoft's biggest driver of revenue is enterprise software. Sony's is insurance. You could wipe out the gaming business of both companies and it would be like popping a zit on its face. This is why Nintendo is in a hard spot when it loses money: The company is ONLY games. That's a rough place to be when your competitors have so many evergreen businesses subsidizing gaming.
Amazon, on the other hand, has its fingers everywhere and doesn't need to turn a profit anywhere. People running sane businesses must see it like a publicly-traded White Walker: A force that moves across the land, taking whatever it wants, that can't be killed by convention weapons.
And now it has a phone.
Amazon wants you to pay $200 and sign a two-year contract so it can sell you everything through its services. A few people, myself included, thought the phone might be given away to people willing to switch in order to entice people to buy more through Amazon, but why not see if they can charge for it? The gift shop is open, and you have to pay to get in.
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