At GDC, Amazon Reveals its Playbook for Dominating Game Development

Attention, game developers: Amazon (AMZN - Get Report) wants to be your everything. 

At the Game Developers Conference in San Francisco, the tech giant hosted a marathon of panels and educational sessions aimed at winning gamers' hearts. In an offering dubbed Game Tech, Amazon pitched itself as an all-in-one game development service that bundles together back-end services, SDKs, analytics and monetization tools.

Its chief rival in gaming services is Microsoft (MSFT - Get Report) , which recently announced its own Game Stack toolkit as it concurrently builds a game streaming service. Alphabet (GOOGL - Get Report) and Amazon are also reportedly working on streaming services. And with the games industry rapidly expanding, it's an increasingly high-stakes battle. 

Twitch, Amazon's gaming-centric livestreaming platform, is a linchpin of Amazon's plan for domination.

In a September 2018 whitepaper, DA Davidson's Tom Forte argued that Twitch is an underappreciated asset for the cloud and commerce giant. At 15 million daily unique viewers and 3 million streamers monthly, Twitch is a media force in its own right -- but it's also a profitable complement to Amazon's other core businesses, notably AWS.

"Among [Amazon's] efforts, we see Twitch as one of its higher margin efforts, behind only AWS, advertising, and third-party retail sales. When considering that we see Twitch as complementary to Amazon's higher margin AWS and advertising efforts, the benefits to Amazon's margins from Twitch are even more significant," Forte wrote, estimating Twitch's gross margins at 55%, compared to 37% for the company as a whole.

Twitch's value was apparent at GDC, where executives urged developers to build games specifically with Twitch in mind as a means of driving conversions, engagement and monetization in the highly competitive market. 

The role of AWS also loomed large over the event.

As the gaming industry grows as a whole, and as gameplay and computing demands shift to the cloud, both Amazon and Microsoft are emphasizing how their cloud offerings create a more powerful and fluid experience for developers. At GDC, Amazon executives drilled down on the role that AWS plays for game developers by highlighting its game engine Lumberyard, analytics manager Kinesis, monetization service Amazon Moments and other tools that can be run in the cloud. 

"By using these different 'Lego blocks', you can build a full end-to-end solution without being an expert in the space," said AWS architect Kyle Somers, speaking of Amazon Kinesis. "This entire stack runs in your AWS environment."

Even Amazon's Alexa is in on the action. The voice assistant is another emerging frontier for gaming, in Amazon's eyes. 

Voice-first games, such as Jeopardy! on Alexa, are one example of Alexa gaming. Others are so-called companion games to popular titles like Call of Duty, which can be played using Alexa, and integrated games that offer a voice guide to board games. Amazon offers an Alexa Skills Kit SDK, which makes it possible to insert paid features into Alexa skills. 

"We are moving towards a more ambient technology world, and we think voice is a big part of that," said Cami Williams, a developer evangelist for Alexa Games. 

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