May 23, 2022

Bethesda Deal Spells Trouble for Amazon Alliance

A Brief Disclaimer

Before we kick off, I’d like to take this opportunity to stress that this is an opinion piece. Namely, my opinion. Someone once said that, “Opinions are like arseholes, everyone’s got one”. And just like that rather crude but perfectly apt anatomical allusion, my opinion is my own. Whilst you can share it, you can never have it completely, and you are cordially entitled to abstain all together. So before we march gaily through a myriad of meandering conjecture, I urge you to keep an open mind. By all means share your own in the comment section below. Your opinion that is, not the other thing. Now, to Bethesda.

Where have you been? Microsoft purchase ZaniMax Media, announced this week

On September 21st, 2020, Microsoft set the World a buzz by dropping one of the biggest gaming partnerships announcements ever. Dwarfing Disney’s acquisition of the entire Star Wars franchise, the tech giant announced its acquisition of beloved publisher ZaniMaxi Media, Bethesda’s parent company for $7.5b. But this is old news, as they say. By now we’ve had a chance to collectively remove our slackening jaws from the floor our respective basements. Surprise suitably subdued, we can consider some of the wider implications of this move. Perhaps even ponder the implications beyond the obvious land-grab ahead of the next gen dropping.

The What and the Where of it All

Opinion, as ever is divided on exactly who will win the next console war. But to determine the winner, we must first consider the “how”, and crucially the “where” underpinning this momentous mêlée. The how is clearly exclusives, exemplified by this latest acquisition from Microsoft. Sony have been much more adept in this area with Microsoft dragging around tired IP like so much snake oil. Until the Bethesda announcement of course. You can almost feel the tectonic shift in fortune, much to Sony’s chagrin. But the where is, arguably more important, and that battlefront is almost inevitable going to take place in the cloud.

I wonder where the “X” button is on a cloud controller…

Cloud computing, and crucially gaming, is within a hair’s breadth of landing, ubiquitously in our domiciles. In very simplified terms, this is where the computing power to play your favorite triple A is housed not in a pretty white box next to your TV, but somewhere else entirely.

Although not strictly cloud gaming, the online services provided in Xbox Games pass are universally gauged superior to Sony’s current offering. With triple A titles available on release, and Sony’s PlayStation Now struggling to keep up the pace, the value gap is getting ever wider. Microsoft too announced Project xCloud. This will enable those same Games Pass games on Mobile, truly setting these two console giants apart. Yet Sony continues to struggle with PS Now’s well documented latency issues and inferior triple A library availability.

But to truly understand the cloud gaming scene, we need to involve all the players. That includes a little known logistics company, called Amazon.

Welcome to the (Amazon) Jungle.

You’ve probably heard of Amazon. Those not familiar before the current state of things, as sure as Bezos is bald I’d wager a lot of us are now intimately familiar with the leading experts in near instant purchase fulfillment. Unsurprisingly, Amazon have seen their profits soar during this period of consensual confinement. Reported by The Verge, Amazon have seen profits double to $5.2b since the start of the pandemic. But what is less understood, is that only 1/3 of Amazon’s operating income comes from cardboard encased deliveries. Staggeringly the majority comes from their lesser know cloud computing solution, “Amazon Web Services”.

Perhaps even less understood, is that, according to Amazon’s own website, “Over 90% of the World’s biggest game companies are using AWS”. From server provision, to streaming, to match-making optimization, it seems the good people at Amazon have been very busy bees. A quick glance at the AWS featured customer stories and the scale of their involvement is eye-watering.

Familiar Faces: The Celebrated Partners of Amazon Web Services

Ever wondered how Fortnight manages it’s 200m strong player base? AWS. Heard of League of Legends? Amazon has. From Gearbox, to Capcom, Square Enix to Ubisoft, Call of Duty to God damn Pokemon, Amazon’s tendrils run far and deep. Which brings us neatly to Bethesda, featured proud and clear on their page of preferred partners.

The Developer, the Telco and the Tech Giant

In December 2019, Verizon, a huge US telecommunications company announced a partnership with AWS. This was heralded to “bring the power of the world’s leading cloud closer to mobile and connected devices at the edge of Verizon’s 5G Ultra Wideband network” [AWS Verizon press release]. In language that doesn’t reek of tech-PR up-chuck, it meant that you could now experience ultra-low latency performance of high octane applications, like AAA games for example, on Verizon mobile devices. And Bethesda was slap bang in the middle of it all.

“…the companies are currently piloting AWS Wavelength on Verizon’s edge compute platform, 5G Edge, in Chicago for a select group of customers, including award winning, worldwide video game publisher Bethesda Softworks and the National Football League (NFL).”              

Verizon press release

Pretty big potatoes for a publisher. So why did AWS and one of the world’s largest telcos look to ZaniMaxi to push their latest tech? For the answer to that, we have to look above even the cloud, into the stars themselves.

Time to Fasten Orion’s Belt

More than simply leveraging the studios (mostly) beloved reputation for its staple franchises, the deal goes beyond playing Skyrim on your Samsung. ZaniMaxi, via subsidiary famed Doom creators id Software has its own contribution to the cloud ecosystem under its galactic belt. Announced in June 2019, Orion is built directly into a games core code, specifically to optimise that game’s performance when utilising the cloud. Said by James Altman at the time, Bethesda’s own Director of Publishing,

“…by combining Orion with AWS Wavelength and Verizon’s 5G network, we will be able to deliver on the promise of streaming: a frictionless, ultra-low latency experience that will enable millions of gamers to play AAA quality games at max settings, wherever they want, whenever they want – no downloads or consoles required.”

Orion promises Doom multiplayer, seamlessly on your mobile

To put this all in perspective, Bethesda have teamed up with the biggest cloud computing company in the world, ostensibly to improve the cloud gaming service offered by AWS, which combined can be carted off to new publishers, so improving the AWS gaming proposition further still, moving away from the need for consoles altogether. And now Microsoft, among other things a console manufacturer own Bethesda, and vicariously Orion, which is effectively empowering their competition directly. This, surely can not last.

In the Azure Corner

The threat to console gaming aside, there’s an even more compelling reason why Bethesda and AWS are less than ideal bedfellows from where Microsoft is sitting. Microsoft has its own cloud computing product, “Microsoft Azure”. This is the same technology that led to the Sony Microsoft collaboration back in May 2019, also utilised by Nintendo Online. The Sony deal was specifically cited to “explore the use of current Microsoft Azure datacenter-based solutions for Sony’s game and content-streaming services”.

Considering the AWS partnership roster, “everyone” might be a touch overstated

So if Microsoft is touting its own cloud computing solution as best in show, wouldn’t it make sense to move their newest, shiniest acquisition over to its own platform? Further, wouldn’t the acquisition of Orion, if it truly sets game latency apart from the crowd compel Microsoft to retain that capability for only games hosted on Azure? In not doing so, they are deliberately enhancing the competition, AWS, in a market where Microsoft has a lot of catching up to do, from a partnership perspective at least.

Agreements between competing companies are not rare, of course. Good example would be Respawn using the Unreal engine on Star Wars Jedi:Fallen Order instead of the proprietary Frostbite engine owned by EA (and we can all be grateful for that that minor concession). The success of Apex Legends gave it clout in the conference room, clearly. This could well go the same way as far as Bethesda and Amazon are concerned, of course. But at the very least, money spent by Bethesda is now money spent by Microsoft, and any further development on AWS is quite literally lining Amazon’s pockets.

Sony Wins the Battle, but What of the War?

In a recent poll conducted by Any Button Gaming, it seems that buyer intentionality still sides with the upcoming PS5. But Microsoft may well be winning the war when it comes to cloud gaming, at least from a console perspective. The sheer value offered by Xbox Games Pass, now buffeted further still from the Bethesda acquisition is simply unrivalled. But if MS are indeed winning the long game, then this is a conflict with more than one frontier. It will need to head off consumer interest from Sony, whilst quite possibly keeping a much larger, insidious threat from Amazon at bay, along with other cloud services set on course for a console free future.

Howard wasn’t feeling too fresh after the Microsoft re-org announcement

And right now, Bethesda’s partnership with AWS is, in my opinion, orthogonal to that strategy. An unnecessary thorn in its side that, now acquired could be swiftly and painlessly removed. Save a monumental tantrum from Todd Howard, Bethesda’s future on AWS looks about as sturdy as its increasingly embarrassing Creation Engine.

Sources; Microsoft News, Pulse, Amazon, CNBC, BBC

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