Amazon reportedly shelled out $10 million to acquire GameSparks, a small company that enables game developers to use cloud-based tools to build and manage a variety of features for their games, according to TechCrunch.
Neither company officially commented for TechCrunch’s story, but one of its sources hinted the deal would be reflected in the tally of Amazon acquisitions made during the previous quarter. Amazon revealed in its second quarter earnings report that it spent $633 million on acquisitions during the quarter.
The acquisition of GameSparks comes almost three years after Amazon acquired game watching site Twitch for about $1 billion.
Amazon's bid to acquire Whole Foods may be the deal that everyone is talking about, but the e-commerce giant has been busy striking several other key deals. It confirmed the acquisition of Middle Eastern e-commerce marketplace Souq in late March, and acquired comparison search firm Graphiq earlier this month.
The GameSparks deal is smaller and seems more outside Amazon's traditional realm than the other two acquisitions, but it's important to remember that nowadays there isn't anything that doesn't pique Amazon's interest in some way. Amazon is a growing force in the apps market, including gaming apps, and when you consider estimates that the global apps marketplace is due to surpass $6 trillion in the coming years — Amazon's interest becomes pretty obvious.
Acquiring a cloud-based company responsibly for building features into games, and enabling them to be managed, seems like a pretty good fit with Amazon's own cloud operation, a big revenue contributor to its bottom line. But the company is beginning to see threats of new competition. Cloud-based gaming capabilities could be an area where AWS could tap into new revenue, as the gaming sector reportedly is undergoing its own migration to the cloud, and is still early enough in that evolution that Amazon could jump in and dominate. Then, there's that Twitch acquisition, which is just one of several gaming technology-related properties with which Amazon could align GameSparks.
It's not hard to see how this investment in the gaming ecosystem could eventually dovetail with Amazon's traditional e-commerce interests. In-game advertising and commerce, as demonstrated by Pokemon Go and others, represent an area of potentially huge growth. Companies like Shopify are already trying to mine it with tools to help game developers support in-game sales of physical and virtual products. An acquisition like GameSparks, along with Amazon's other gaming holdings, could help Amazon work toward the technical capabilities to support in-game commerce.