In the wake of Amazon’s cuts to its games division, a former exec has explained how the company tried and failed to outdo Steam.

If you thought the massive web outage was the worst thing to happen to Amazon this month, you’d be mistaken, as the company has since gutted more than 14,000 employees.

This includes an unspecified number of roles in Amazon’s video games division, with MMO New World no longer receiving any content updates, just one month after its fourth anniversary.

Amazon’s been trying to crack into the gaming business for years now and, as it turns out, the company had high hopes of replacing Steam as the dominant gaming platform. Although they’ve done such a bad job of it, nobody even realised they were trying.

This is according to a LinkedIn post by Ethan Evans, former vice president of Prime Gaming at Amazon. Although the post was made eight months ago, it’s only recently surfaced and made the rounds among the gaming community.

It offers some fascinating insight into Amazon’s strategy, portraying the company as being woefully shortsighted and overestimating the importance of its own brand.

Perhaps the most shocking thing about it is that Amazon has been competing with Steam for over 15 years, even before Evans joined the company.

‘We failed multiple times to disrupt the game platform Steam,’ wrote Evans, despite Amazon being ‘at least 250x bigger’. He explained how Amazon’s initial plan to come out on top was to simply buy its way to victory, having acquired an established PC game store called Reflexive Entertainment, which went nowhere.

Then, after buying Twitch, it set up a dedicated gaming store, with the assumption that ‘gamers would naturally buy from us because they were already using Twitch’ and later established streaming service Luna.

Unsurprisingly (well, to everyone but Amazon), people didn’t ditch Steam for Amazon’s services just because of the branding. No one was going to abandon the platform they had grown accustomed to after so many years; something Evans admitted to underestimating.

‘At Amazon, we assumed that size and visibility would be enough to attract customers, but we underestimated the power of existing user habits,’ concluded Evans. ‘The truth is that gamers already had the solution to their problems, and they weren’t going to switch platforms just because a new one was available.’

This secret failure explains why Amazon has not been shy about cutting back on its gaming division, as aside from New World, one of the laid off employees, senior gameplay engineer Ashleigh Amrine, has suggested an MMO based on The Lord Of The Rings, which was announced in 2019, has also been scrapped.

Amazon isn’t completely abandoning its video game plans though. According to Bloomberg, work continues on a handful of projects, including the new Tomb Raider Amazon is co-producing and ‘casual and AI-focused games’ for Amazon’s cloud service.

Even so, this is another clear example of how big tech companies don’t understand how the gaming business works, believing that throwing loads of money around is all they need to do, without understanding why existing companies are successful.

Google has had similar problems, most obviously with their failed Stadia service, but it’s an issue that seems increasingly prevalent at Microsoft, who for decades have been throwing money at the problem – including over $80 billion on Activision Blizzard and Bethesda – with relatively little to show for it.

The latest financial report for Microsoft, for the three months ending this September, shows how the company’s gaming revenue has declined by $113 million (about 2% compared to last year), with hardware sales down a massive 29%.

Microsoft as a whole is doing fine, but the video game side of the business has seen better days (Metro/Microsoft)

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