Talking Point: Amazon Fire TV is an Early Warning for Console Heavyweights
Posted by Thomas Whitehead
Unlikely to kill consoles, but its successors may try
When the Ouya was successfully crowdfunded, its executives talked it up as a revolution in living room gaming, promising a wonderland of fun experiences available for free or costing less than a cup of coffee; the world would move on from pricier game consoles flogging retail priced games. Like much PR talk around new gadgets there was much hyperbole, and we think it's fair to say that gamers were split between half-believing the hype and others that dismissed it out of hand. Whatever camp you were in, subsequent events have done little to live up to the boasts of Ouya's PR machine — it's been a bit of a flop.
Hype about playing Android games on the TV quickly became disappointment that you, well, play Android games on the TV. Some of Ouya's problems have been its outdated Tegra 3 chip (editor's note: this is corrected from Tegra 2, as originally stated), a controller that was widely panned, some downright awful games that were popular on social networks for the wrong reasons, and a lack of brand recognisability. Experienced gamers that have been into the hobby for more than five minutes think Nintendo, Sony and Microsoft when it comes to home consoles, while the older among us bring up names like Sega and Atari, too. Ouya as a company is currently small fry, with crowdfunding and private investment evidently not giving it the hundreds of millions of dollars (billions, even) enjoyed by other console manufacturers; it's had little ability to get its brand into the consciousness of non-gamers, or those that mainly play a little on their smart devices.
We're tempted to talk about Ouya in the past tense, which is harsh as it still exists, is a going concern and is still working on its next model. Ultimately, though, a number of the Nintendo Life editorial team weren't impressed with its merits or its potential to 'disrupt' Nintendo and Wii U when it was emerging, so we didn't really consider it in any real detail. The thinking was that micro-consoles were a fad that would struggle to gain traction, as those that want big games on their TV buy dedicated systems, and those that don't are likely happy with smart devices and in some cases, based on sales numbers, a gadget like the 3DS.
Amazon Fire TV is the latest gadget in town, however, and it's not so easily dismissed — it's a set-top box rather than a micro-console, but in gaming spheres it's been partly considered as the latter. It's been on the market for two weeks and has been the number one selling electronics product on Amazon in the U.S., to the surprise of no-one, and briefly went out of stock due to demand. We suspect a bit of PR nonsense in that latter area, to a degree, as talk of waiting lists into May have quietly dissolved and, at the time of writing, it can be ordered for $99 on Amazon.com for next day delivery. The exception is the controller, which still estimates May for delivery due to high demand — whether that delay will disappear for next day delivery, manufacturing is slow or there is actually huge demand, is unknown. It's yet to be released in Europe, so this is North America-only at the moment.
In many respects the little box is competition for Apple TV, the Roku 3 and Google's super-cheap Chromecast — these are small devices (or HDMI 'sticks' in the case of Google's product) that make any TV with a HDMI port a Smart version of itself, primarily used for streaming TV, movies and perhaps music. Utilising their own infrastructures such as iTunes and Google Play, they aim to serve as an extension to smart devices already owned, or as a cheap way for anyone to use services such as Netflix without doing so through a games console or having to buy a new TV. They're convenience products to add a little to existing products, in that case, and haven't been substantial gaming options up to now — you can display and play games using Apple TV, for example, but it's not intuitive in a way to attract mainstream consumers.
The difference with Amazon's set-top box is the fact that it has a more viable Games section in its operating system, with descriptions on its product page highlighting it as feature; most importantly it has a separate controller that can be purchased for $39.99 and used with the games on offer. These are essentially free or inexpensive smart device games on the TV, while the controller has its critics, but let's not pretend this is the same as when Ouya arrived — Amazon is a very different beast.
Though based on Android, Amazon has been using its own variation on the operating system, in the process tying its own film, music and game markets into it; these are separate from Google Play. Early reviews and industry analysis of the Fire TV suggest that Nintendo, Microsoft and Sony executives shouldn't lose too much sleep over consumers choosing a Fire TV over one of the current home consoles — for many it's likely to be a case of owning multiple devices, with this fighting for the streaming TV segment. As an early warning shot Satoru Iwata and his contemporaries should be paying some attention, however, and the image below shows why.
Amazon is an ever-present in online shopping, and has crept into internet vocabulary in the way that we may say to "google" something. When buying online, the first instinct for many is Amazon. It's that power which it has used, in recent years, to drive it own products with advertising, and is arguably one of the few advantages it has over any other technology manufacturer. We need only go back to the original Kindle eBook reader — in some respects it was an inferior piece of kit to rivals of its day, yet it was wired into Amazon's extensive eBook library, was inexpensive and had the most powerful marketing. Devices from Sony, Barnes & Noble and others were squashed as millions of online shoppers saw adverts on Amazon's website, saw the price, considered the ease of buying eBooks using their existing accounts, and likely opted for convenience. Amazon's hardware doesn't have to be the best, it simply needs to be solid and to be integrated with its account and product systems.
Fire TV does that, though not many will suggest right now that those seeking games on the TV will choose a box for that reason. Yet some will be tempted by its cheaper price, and in the micro-console space it's likely to trounce the Ouya and other crowdfunded platforms, while Sony's Vita TV is still Japan-only. What perhaps holds Amazon's system back is that its own infrastructure for TV streaming has room for improvement, and any gamer that truly wants to use it properly for playing smart device ports — though the default remote can be used to a degree — such as The Walking Dead and Minecraft will need to pay out for that controller, taking the cost to nearly $140.
Yet it's a potential future concern for the established three players, and perhaps more so Nintendo. The Wii took Nintendo back to the top with "blue ocean" strategies — a cringeworthy example of corporate-speak, perhaps — as gamers of all kinds swung Remotes or went through fitness routines; it's not unreasonable to say that a proportion of that market has now moved on to equally simple experiences on phones and tablets, albeit with more tapping and swiping than waving around of arms. Nintendo's admitted that it needs to get the messaging of the Wii U to more consumers and persuade them of why they should want the system on top of their other sources of entertainment, with challengers and rivals that barely featured in the Wii's golden early years, in particular.
There are positives and grounds for optimism from a Nintendo perspective, however. It's still unproven whether the gaming aspect of Amazon's Fire TV will take off; there's early support and various titles from Amazon's store that are included and compatible with the box and its controller, but it's unclear whether those buying the system are simply doing so to expand their TV options in streaming content, particularly. The target audience for this machine — like its contemporaries — may have little interest in the games or merely dabble. While dual-screen play is possible with Amazon tablets, it's unproven whether a sizeable userbase wants to play these sorts of games on their TV.
It also seems unlikely, at this stage, that many dedicated gamers would sacrifice a conventional home console for a set-top box, especially as systems such as the Wii U and its rivals already have apps for streaming services such as Netflix. Sony and Microsoft are probably comfortable in the knowledge that many big-name third-party titles are coming to PS4 and Xbox One, a reward for the systems' respective PC-level grunt. As for Nintendo's system we know that's not the case right now, and the big N will be reliant upon its substantial brand power — through first-party games and those of close development partners — to improve hardware sales.
Nintendo's proven before, with the 3DS, that with the right content it can defy market expectations and analysis to sell its hardware. The Fire TV, for its part, is probably a little short of being a console killer, with Amazon's own messaging sets gaming as a bonus extra. Should Apple and Google release updated set-top boxes with more of a gaming focus, and then the Fire TV 2 does likewise, then market could suddenly become more crowded. Nintendo is no doubt watching.
These are fascinating times for gaming. There are so many products screaming for our attention, comparisons to the early '80s and dozens of consoles aren't necessarily wrong. Nintendo, Sony, Microsoft, Apple, Google, Amazon, Steam and smaller competitors besides are plugging wares that are a mix of conventional retail games, premium downloads in the $10-30 range, less expensive downloads on gaming stores, $0.99 titles and free-to-play are all competing. Quality and visibility vary wildly, but the gaming market is at once bigger and more fragmented than ever.
Fascinating times, and if you're an optimist they're exciting times. The last time Nintendo was under major pressure in the home console space it ignored the HD focus of PS3 and Xbox 360, bet on motion control and sold over 100 million systems. The company is already preparing a mysterious "Quality of Life" platform to stand apart from its gaming products and talking about boosting the appeal of Wii U and its GamePad at E3 2014 and beyond. It'll be fascinating to see what the company does to bring the Wii U to the fore at retail, and even more so to see how it responds to the increasing and varying living room competition in years to come.