Leading cloud providers such as Amazon Web Services and Microsoft Azure are going through the natural expansion of their offerings up the pyramid:
Both started as mostly IaaS offerings, advanced to PaaS rapidly, and started investing resources into SaaS across select verticals. Specifically targeting game developers are Amazon Game Tech and Microsoft’s Azure for Gaming (accelerated by the Playfab.com acquisition a few years ago).
The expansion is viewed as a win-win for game developers since game developers generally want to focus on creating highly resonant game experiences (game design, gameplay, creative) and spend less time in non-core areas (infrastructure, game agnostic services, etc). The possibility to “outsource” the infrastructure or game agnostic services such as identity, multiplayer enablers (matchmaking, low latency servers), monetization, social services (chat) is attractive as it allows the game development studio to concentrate their “in-house” efforts on their core interest — making the best games for their audiences.
For the cloud providers, it is the next growth opportunity— through the economy of scale offering highly competitive pricing for the business fields where specific vertical (game developers in this case) does not want to “play” or where in-house development exists mostly since there was no alternative proposition benefiting their customer — Player.
What this means
As long as the status quo of this synergy remains true we will witness the following:
In an attempt to vertically integrate non-core areas from game developers the key players (AWS, Azure, and other cloud providers) will seek to acquire talent and expertise building out game agnostic services (see job postings from Azure, Amazon as examples). In the next 2–3 years, we will see the expansion of the offerings in the SaaS space (offering just Infrastructure or Platform won’t be competitive). We will witness more of interesting M&As for sure as all cloud players attempt to vertically integrate their offering (game agnostic services, chat, matchmaking, graphics engines, etc)
Game developers will be able to achieve more with less, entry barriers into the game development market will get lower, demand for game developers in game design, art, gameplay will increase (hopefully driving their compensations up). This would result in more games, more competition for Player’s attention which should lead to more innovation around game experiences.
As for Players — exciting times! Games Industry evolves further now backed with top tech companies interested in overall market growth and success. This means we will see more games, new genres, better quality and service, lower latencies, and, hopefully, more versatile and affordable game experiences (due to competition).
Exciting times to be a gamer, work in the games industry, or adjacent spaces. Gaming indeed becomes a meaningful life pursuit, now recognized as such even more.
Thanks for reading!