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Amazon Web Services’ insights into gaming for 2021

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No one has a bird’s eye view of the game industry like Amazon. The company’s Amazon Web Services division provides online services for 90% of the industry.

AWS provides services that include Amazon GameLift for dedicated server hosting and FleetIQ to support multiplayer games. The company has its own app store and the Amazon Lumberyard game engine. It also has its own game studios, and it has become a one-stop shop for game developers.

I spoke with Eric Morales about the breadth of the company’s services for game companies and the insights it gets from having so many game customers, who all saw a huge surge of usage during the pandemic. As the game tech segment leader at Amazon, Morales witnesses the disruption of the pandemic on workplaces, the shift from physical sales to digital, the rise of self-publishing, and the growth of game subscriptions.

Morales said that more games are being made at home, as workers shift out of offices because of the pandemic. Streaming is expected to move into a new stage with 5G wireless networking, as are social experiences for gamers.

Here’s an edited transcript of our interview.

Above: Eric Morales of AWS

Image Credit: Amazon

GamesBeat: How involved is Amazon Web Services in games? Do you have some stats about how big it is in general?

Eric Morales: This is a critical business for us. I’ll start with the obvious statement there. We work with 90 percent of the top game publishers and developers on the planet. This is a serious strategic vertical for AWS globally. If you take a look at our service spread, this is one of just a handful of industry verticals where we have dedicated resources and dedicated services, part and parcel for this industry. Services like Amazon GameLift, like FleetIQ to support multiplayer games. Even on the software side, we have our own game engine, Amazon Lumberyard. On the retail side, we have game studios, game publishing. We’re a major games retailer. Twitch is part of the family as well. Broadly speaking, this is one of the most critical industries for AWS. We not only feel we have a responsibility to be involved, but we also have a lot of compelling things to talk to customers about.

GamesBeat: What sort of insight do you get by being able to pull back and see everything that’s happening across the industry? What are some of the highest-level observations AWS can make?

Morales: There’s a couple of things there, and they speak to some of the trends we’ll lean into in 2021 and beyond. The first is, naturally when you have aggressive lockdowns thanks to COVID, more people are going to be at home playing video games. We saw, just from a baseline perspective, games like Roblox, Fortnite, Dead By Daylight, team-based multiplayer games where you have many people interacting socially, those games got exponentially more popular. They definitely saw usage increases. Even on the mobile side, people found opportunities for distractions in mobile games. We also noticed a significant uptick in general usage growth, customer growth, and MAU activity for our customers.

On the flip side of this, the pandemic was awful for everyone. For a lot of companies, a lot of developers and studios that didn’t already have deployed games that were out there generating revenue, there was a tremendous hit to productivity. You can imagine, if you’re building a game for PlayStation or Xbox, before the launch of the consoles in particular, where you have a dev kit literally chained to a desk in a physical office, all of a sudden you’re not allowed legally to the office anymore. That has an impact on what you’re able to deliver. This very aggressive shift to remote work, remote development, and the more collaborative creative aspects of games, that took a while for people to snap back into.

We saw increased usage, an increase of players, but on the flip side, a huge hit to productivity, and an acceleration of a lot of trends we’ve been talking about for years. What kinds of possibilities do you have as a development house, as a studio, if you no longer have to have your team and your infrastructure in a single place? That’s part of the reason why we’ve been so aggressively talking to customers about game production in the cloud in general. We think this is an opportunity to help speed up that productivity.

Amazon Web Services' insights into gaming for 2021 2

Above: The Cycle from Yager runs on AWS.

Image Credit: Amazon

GamesBeat: Alongside that increased usage, we saw a lot of money flooding into the industry in a bigger way than we’ve seen. We had a lot of outside investors looking at the publicly traded game companies and putting money into those, but also becoming the limited partners of more than 30 game-focused venture capital funds. All those companies put that money to work. It seems like we got this tremendous boost in additional game creation. Is that something that’s visible to you as well, that there are more startups and more game companies getting to work?

Morales: One-hundred percent. One of the aspects that sped that along is the changes in demographics and the increase in the number of net players. That’s part of it. Also, just think about the distribution of games as an industry. Until very recently, games were still primarily rooted in physical media, a disc or a box or a cartridge. Over the course of Q1 and Q2 of 2020, this trend of moving everything over to digital happened incredibly quickly. Overnight the shift from physical to digital happened in a very lopsided way.

In addition to that, we saw that the access vectors to games also changed. Everybody saw digital distribution coming, but you also had subscription services, which changed the way that you access games, and also changed the way that games are funded. There’s increased VC activity, absolutely. There’s increased angel activity. That’s always been an important part of the industry. But now that you have players like Apple Arcade, for example, who not only offer distribution platforms, but also because they’re looking for content to attract eyeballs and players to their subscription service, they’re almost acting as patrons, like the Pope and Michelangelo. They’re funding experiences and games that might not have been commercially viable 10 years ago. That’s resulting in some interesting, challenging, weird titles, which is pretty cool.

You have another great example with the free game of the week and app store exclusives that they have pioneered in the PC space. You saw games like Untitled Goose Game, which might have been mostly unseen 10 years ago. All of these additional avenues to users and consumers, the ability for people self-publish in a meaningful way — it’s a bit easier to get access to capital now if you have an impactful idea, a strong team, a pedigree in the industry. To your point, there’s more VC activity than ever before. We’re seeing companies that used to be development shops that required publishers move much more aggressively into the self-publishing space.

A great example of this is Yager Development, based out of Germany. They made Spec Ops: The Line a few years ago, which was a really interesting, cerebral, challenging action game. Last year they decided to self-publish an interesting session-based multiplayer game called The Cycle, partnering with Epic Games. That’s running entirely on AWS. Of course, I have to mention that. But this is a pedigreed studio that’s taking the plunge into self-publishing. That can only happen because of these market dynamics that have been expedited by the brave new world we’re living in.

GamesBeat: What, to you, seems like evidence that this is going to continue in 2021? AppAnnie is expecting 20 percent growth for mobile games, but I think everyone is expecting all of this to continue in 2021, even though the comparisons that could be made to 2020 are going to be very challenging to overcome as far as sustaining growth.

Morales: The big difference, there was a lot of spiky growth in a relatively small pool of game developers with games that were already deployed. We saw this productivity hit as COVID wreaked the worst of it earlier in the year. In 2021, we’ve all been living this way for the last six months. Now we’ve found creative ways of building games.

A good example of this is Quantic Dream, the French studio run by David Cage. If you think about their games, they’re incredibly high fidelity, cinematic, all mo-capped. They’re used to treating this like a movie studio. When COVID hit, that was a huge disruptive force to their creative process. But they decided to lean into that. They moved the entire design team, the design process, and the art process into the cloud.

Amazon Web Services' insights into gaming for 2021 3

Above: Quantic Dream’s Detroit: Become Human runs on AWS.

Image Credit: Amazon

They built a bunch of workstations on AWS and hired designers all over Europe. They sent them a Wacom tablet and gave them access to a stream of a powerful workstation running in the cloud. They could have a 4K, 120fps stream to their laptop and use a tablet at home to stay productive. And more important for them, that also meant they could keep their sensitive assets in one place in the cloud. They could build a process in the same environment running in an AWS data center and hit the ground running. That also meant they didn’t have to restrict themselves to hiring in Paris. They could expand and find talent all over the world.

They saw this huge initial torpedo to their business, but it suddenly became an opportunity for them to expand and become more global. Imagine that cascading across hundreds or thousands of other studios all over the world that are facing this new reality. That’s another reason why we’re super excited about having MacOS within AWS. If you’re building a mobile game, if you’re a handful of people who download a copy of Unity or Unreal and you’re building a game at home, now you can have the entire development process and build process for Android and iOS entirely in the cloud, in the same environment. That’s never been done before.

I’m bullish about this. I don’t have a crystal ball. I don’t know if we’ll see accelerated growth continuing in the exact same way. But I don’t think we’re going back. The combination of an entire generation of game developers who have had to face this reality and adapt to it, combined with the fact that we have more consumers playing games than ever before, and we have the energy of a new console generation, which attracts capital and exclusives and partnerships and M&A activity, I think 2021 and 2022 will be good years for games.

GamesBeat: If you had more specific predictions, what would they be?

Morales: One thing that I find super interesting is the shifts in business models. I talked about that a bit with subscriptions, for instance. I’m a bad example, because I subscribe to all of them, which is not financially sustainable, but it’s a good way to play a lot of games. But if you look at something like Xbox Game Pass, it’s checking a lot of boxes. You can download titles, play them on multiple consoles or PCs. They have the streaming capability. Something like Apple Arcade spans computers and mobile. More traditional bundle services like Humble Bundle, where you get Steam keys on a monthly basis, that’s some interesting experimentation as well.

Then you obviously have streaming. What if, given a big enough pipe into the home, you could remove all friction from somebody playing a game? If you looked at streaming generally 18 or 24 months ago, a lot of folks said, well, it’s early. Broadband isn’t where it needs to be globally, and certainly not in the U.S. Is this really solving any problems? But now, particularly in the situation we have now with the pandemic and more people working from home, the prospect of being able to have a single-click access and to jump into control with RTX on with Amazon Luna and use the same controller on your TV as when you play the game on your iPad, that is a bit of a game-changer.

Even within the streaming space, what I find energizing is you’re seeing an experimentation with business models. Google has their approach with Stadia. We talked about Xbox Game Pass as well. Amazon Luna giving publishers the opportunity to own their own destiny within streaming as a distribution platform. That’s going to be interesting. I’m bullish on this. Then you have services like GeForce Now, which I’m personally a huge fan of, that are straddling the fence between the hardware and software experience for gamers.

The sky is the limit here. 2021 is absolutely going to be a good year, but by 2022–I didn’t imagine that over the last 12 months, we’d have a myriad of options for game streaming, and all of them would be excellent. Or that customers would be able to build games like Detroit: Become Human or the next Angry Birds in the cloud. It’s not something I thought would happen, and I’m glad it has.

Amazon Web Services' insights into gaming for 2021 4

Above: Detroit: Become Human

Image Credit: Quantic Dream/Amazon

GamesBeat: I do wonder if we’re going to get more interesting things as well that combine games with social experiences. We have our conference coming up on the metaverse. We’re assuming that people are tired of the Zoom-verse. They want something more, and maybe the thing that everyone has written about in science fiction is the thing that’s going to come.

Morales: When you think about metaverse examples, there’s usually a dystopian bent to it. The world we’re living in right now feels a bit dystopian. I’d love to go to a pub again, and hopefully I will soon. On the flip side, the various metaverses we can jump in and out of have turned out to be these remarkably satisfying social experiences.

You hinted at this, that you have games, or really worlds and ecosystems, like Roblox. The sheer potential of this environment, the physics of this little universe and the sandbox you can play on, is incredibly compelling. The idea that you can not only create your own experiences, but potentially create and market and serve these experiences to other players all over the world, almost build a game within a game, and establish your own social networks, your own games, your own platforms within this world, that’s super important. What we’re seeing at that level, like Roblox, is fascinating. Half of all children in the U.S. have played Roblox in any 30-day period. The scale and reach of something like that is just amazing. I have to mention again, powered by AWS, of course. They’re taking advantage of the 74 regions we have as a business.

You look at something like Fortnite, which takes a similar approach, but it’s a bit more prescriptive, bringing more of the cinematic space to gamers. Giving them events to plug into. That’s super interesting. Fortnite, when you log into a major event, it looks and feels a bit like Ready Player One, where you have Batman shooting Wolverine while Galactus is eating the universe. That feels really cool to me. I think you’ll see more of that moving forward. Those social experiences are what will help games transcend this sandbox of, oh, it’s a video game. It moves toward what I think companies like Linden Lab were trying to do years ago with Second Life, making these virtual playgrounds where people can connect with one another. That could get real very quickly.

GamesBeat: What about constraints on growth, things that might be scarce in some way that could hurt this growth? China is buying up all the substrates it can right now, and so it’s making a lot of semiconductor manufacturing tough. There are big shortages of graphics chips from both Nvidia and AMD. I don’t know if there are obstacles you see that have to be overcome.

Morales: As someone who’s been trying to buy a 3080 or a 6800XT for six months, I feel you. Yes, absolutely. I find solace in streaming, though, in that exact example. GeForce Now let me play Cyberpunk at 60fps, 1080p, with RTX on. I can play it on my Shield in the living room or on my computer. If I’m in the states, Luna gives access to dozens of games I can punch in and out of on an iPad, and instantly flip over to my TV when I feel like it.

Amazon Web Services' insights into gaming for 2021 5

Above: Fortnite runs on AWS

Image Credit: Amazon/Epic Games

Some of those games are incredibly complex. We’re talking about Metro or Control. These are twitchy shooting games. One of my biggest suspicions, when streaming became a thing–what’s latency going to look like? Is this going to feel like an appropriate game experience for me? Is it going to feel like I’m controlling the wrong character? Providing you have the right internet connectivity, it’s been a game-changer, certainly for me.

You mentioned the silicon shortages. You have the situation with how difficult it is to get your hands on a new console right now as well. Again, my solace has been, I haven’t felt like I’ve missed out on the next generation because of streaming. Thanks to Stadia, Luna, and GeForce Now, I’ve had a lot of those experiences.

GamesBeat: What about the challenge of streaming creating a lot of traffic or slowdowns in the home? If there’s a bunch of people streaming at the same time, it puts the infrastructure to the test.

Morales: Sure. I can’t dismiss that because it’s a serious concern. I know that particularly in areas that don’t have great broadband coverage, that’s an imperative. You don’t want to lock down networks with entertainment. I will say, though, this is a known issue. Even in my own house, if I’m streaming Disney+ in 4K upstairs and my wife is streaming Netflix in 4K downstairs, that’s effectively 15 megabits per second to either device. That’s roughly the same as a 1080p or 1440p or 4K stream of a game at 60fps.

Even though the technology feels higher-fidelity, and it’s interactive — you’re sending bits in either direction — from a computer science perspective, it’s not that fundamentally different. A lot of the mitigation and improvements you see at the network level are cascading and benefiting game streaming as well. I don’t mean to dismiss the issue. But I think it’s not quite as bad as people fear yet. It’s something to keep an eye on.

PowerChord runs on AWS

Above: PowerChord skin from Fortnite

Image Credit: Amazon/Epic Games

GamesBeat: With all this traffic, we have the risk of outage. When AWS had the widespread outage, people argued that the internet was created so we wouldn’t have outages. We somehow concentrated all this activity again in a few companies such that if they have an outage, everyone has an outage. How resilient can the network be with all this stress on it in 2021?

Morales: That remains to be seen, but so far so good. We’ve been operating like this in a stay-at-home fashion for the better part of a year. Unfortunately that’s going to continue. So far the backbone of the internet hasn’t quite strained. We haven’t reached the apex of packet delivery. There’s an economic benefit to companies making sure that they mitigate for this. More people are going to be at home. More people are playing games. This is one of the primary ways people interact with each other now.

I’m still optimistic. I haven’t seen any situations where there have been substantial outages either at the network level or otherwise that have permanently taken away from the experience of having fun online with friends. Our priority as AWS is to take advantage of our scale and help as many people make fun games in the cloud as possible. So far that’s working out.


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