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Today (Tuesday), reports are amassing that über-innovative online retailer Amazon.com (Nasdaq: AMZN) is not so secretly on a hiring spree to recruit gaming industry heavyweights, fresh off its February acquisition of Double Helix Games.
We're projecting huge growth for Amazon in 2014, and the gaming push will be a big part of it – expect a gaming console to compete with the likes of Sony (NYSE: SNE), Microsoft (Nasdaq: MSFT), and Nintendo (OTCMKTS: NTDOY); original games to go with it; and a set-top box to all hit the market this year.
"Once the Amazon franchise is built out, there are billions of dollars in cash flow that will fall to the bottom line," said Money Morning Defense & Tech Specialist Michael A. Robinson.
With all the talent it's on the prowl to hire, Amazon will create quality original gaming content. It'll then use the content to attract customers to buy their console and set-top box. This kind of fully integrated offering has been done by Amazon before, with great success.
For instance, take Amazon's Kindle eReader tablet. The Kindle came out ahead of competitors, at a much lower price point. It was linked to the Amazon store; thereafter, AMZN launched its own book publishing division for original content and offered an Amazon Prime membership service for unlimited movie streaming, one free borrowed e-book per month, and free two-day shipping, for a total of $79 per year.
"These guys leave no stones unturned for the next dollar they can bring in," said Robinson. "Amazon is constantly upselling, cross-selling, and looking for new products, and they're great at it."
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AMZN followers had speculated for years the company would dive into the gaming industry full throttle, and that day has finally come.
Here's a brief history of Amazon's turn to gaming – a move that will benefit the industry, the company, customers, and investors alike…
Amazon's Push to Become a Gaming Industry Elite
In August 2012, Amazon announced the addition of a gaming department, "Amazon Game Studios." It released a free-to-play social game called "Living Classics" shortly thereafter.
"We know that many Amazon customers enjoy playing games – including free-to-play social games – and thanks to Amazon's know-how, we believe we can deliver a great, accessible gaming experience that gamers and our customers can play any time," Game Studios stated with their first release.
On Nov. 1, 2012, the company released an Android-based mobile game called "Air Patriots," available through Amazon's app store and on Google Play.
In the summer of 2013, a rumor circulated that the company was planning to debut a Qualcomm-based console, but Amazon has consistently declined comment.
In late January this year, a rumor that Amazon is planning to launch a sub-$300 Android-powered console that "will compete directly with Sony, Microsoft and Nintendo" was reported by gaming blog VG247.com.
But Feb. 5 is when we officially knew AMZN is getting really serious about gaming. That day, Amazon told TechCrunch that it acquired Double Helix Games "as part of our ongoing commitment to build innovative games for customers."
Double Helix is an Irvine, Calif.-based company that employs about 75 people and is the result of a 2007 merger between two respected game development companies, The Collective Inc. ("Earthworm Jim") and Shiny Entertainment ("Star Wars Ep. III: Revenge of the Sith"). Double Helix produced the Xbox bestseller "Killer Instinct" and many others.
A large number of Double Helix titles are centered on action- and horror-blockbuster franchises. Amazon has stated that Double Helix's current game roster and other future developments will receive full support following the acquisition.
Finally, this spring Amazon may launch a set-top box that would compete with Apple TV (Nasdaq: AAPL) and Roku, according to a report from tech news and analysis site Re/code.
The set would allow Internet streaming on your TV – from, say, Amazon Prime.
Amazon stock is up more than 36% since a year ago today. In its latest earnings, released on Jan. 30, net sales for the full year of 2013 increased 22% year over year; in Q4 alone, net sales increased 20%.
So far in 2014, AMZN stock has taken a 7% dive – investors could get in now at a discount.
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