Clearly, the search giant understands that gaming is an important component of a mobile operating system.
For Amazon, it’s about selling digital goods
Video games, like other forms of media (books, music, movies), are going digital. But whoever controls the hardware, controls the sale of this digital media. In order to continue selling media, Amazon.com, Inc. (NASDAQ:AMZN) has had to invest in hardware.
The Kindle allowed Amazon to dominate the digital books business; the Kindle Fire tablet has supported digital video. Amazon’s widely rumored smartphone could help boost sales of if its mp3 files.
But what about video games? As games go from physical discs to digital files, Amazon needs yet another piece of hardware: enter its rumored video game console.
Amazon.com, Inc. (NASDAQ:AMZN) has yet to confirm the console, but video game-centric magazine Game Informer has said they’ve heard it from credible sources. Given Amazon’s recent foray into hardware, it would certainly make sense.
Amazon has even started its own video game studio. So far, the unit has released only one game (Air Patriots). But Amazon’s entrance into game development makes the rumor of a forthcoming console more credible.
NVIDIA could be a key chip supplier
NVIDIA Corporation (NASDAQ:NVDA) has solidified its dedication to Android gaming with the SHIELD, and the company’s management has said it sees a bright future for the mobile platform.
Demo videos of the company’s Project Logan show that it’s possible to produce impressive graphics with a mobile chip.
In recent months, NVIDIA’s mobile chips division has struggled. Last quarter, revenue from NVIDIA’s Tegra chips took a dive; the primary culprit might have been the Surface RT —Microsoft Corporation (NASDAQ:MSFT)’s tablet, which utilizes the Tegra 3, sold worse than expected.
But NVIDIA, as a company that’s always been focused around the video game market, could have the edge when it comes to Android-based consoles.
Until they’re announced, it can’t be said with any certainty, but I would not be surprised to see NVIDIA’s chips powering Android-based consoles.
The Android gaming revolution
Currently, Android gaming remains in its infancy. Android lags iOS in terms of games, and the existing Android-powered devices pale in comparison to the major consoles.
But with Google Inc (NASDAQ:GOOG), NVIDIA and Amazon.com, Inc. (NASDAQ:AMZN) backing them, Android consoles should not be taken lightly. Ultimately, the devices could be far more successful than investors believe. Developers find the app store model attractive, while consumers get cheaper games.
This trend is just getting started, but its one investors should keep their eyes on.
Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Google, and NVIDIA. The Motley Fool owns shares of Amazon.com and Google. Sam is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article An Android Tsunami to Wash Away the Video Game Establishment originally appeared on Fool.com and is written by Sam Mattera.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
