Is Amazon about to enter the console business?

It makes sense on multiple levels, and with the Kindle fire, Amazon is almost there.

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Amazon has been the subject of multiple hardware rumors for quite some time, some of which never panned out. Remember all the Amazon Smartphone rumors? So far, that hasn't shown up.

It's done well in the tablet world. First it came out with the Kindle and we finally had an e-reader that worked and was useful after decades of trying. Ok, so Amazon had a major assist from E Ink with its panel. But Amazon took the ball and ran with it because it had content to sell. Apple has made several markets viable where others failed, but in the case of the e-reader, that was Amazon's win.

Then it came out with a tablet. Competing against all those Android tablets, it has done respectable against hardware veterans like Asus and Lenovo. More importantly, though, it had a hardware design and software that it could repurpose for other applications.

Late last year, the company held an employees-only event in Boston to discuss a product called “V1” that was described as "even bigger than Kindle." The Boston Globe got its hands on the invite, which read:

“We are working on a new revolutionary V1 product that will allow us to deliver Digital Media to our customers in new ways and disrupt the current marketplace. We believe this new product will be even bigger than Kindle!”

Speculation is now that Amazon is working on a console. Actually that rumor has been around a while, but it kicked up again after Amazon announced the acquisition of Double Helix Games for an undisclosed amount. Double Helix makes the game "Killer Instinct," a launch title for Microsoft's Xbox One.

In a statement, Amazon said the purchase was part of "ongoing commitment to build innovative games for customers."

Now why would Amazon want to buy a console game company? It's starting to become obvious.

First and foremost, Amazon is in the business of selling content. A console fits in perfectly with a hardware lineup of e-readers and tablets. It also puts Amazon in direct competition with Sony and Microsoft, but the company isn't stupid. It knows how to juggle relationships.

Second, we are at an inflection point in gaming. The three vendors all have new consoles out, and that's the time when fortunes can change. Sony and Microsoft have the inertia of the PlayStation 3 and Xbox 360, but now they have to pass the baton and keep going with the PS4 and Xbox One.

It's easier to disrupt a market when the consoles are changing than when the market is solid and established. However, given that Sony and Microsoft have their consoles on the market and it's February, Amazon's timing fairly stinks in this regard.

Third, you are probably wondering why I have not mentioned Nintendo. Well, Nintendo is rapidly falling behind Microsoft and Sony and ceasing to be a major player. It sold 100 million Wii consoles. It will be a miracle if it sells 20 million of its successor, the Wii U. The company that revived the console after the Atari 2600 debacle of the 1980s is now ceasing to be a competitor.

Years ago, Nintendo got painted as a kiddie console for the 12 and under crowd, while Sony and Nintendo made games for adults. Nintendo gave you "Mario Kart," Xbox 360 gave you "Gears of War."

I remember writing about how this was hurting Nintendo's image a decade ago, and that surveys had found the average age of console gamers was 28 years. Today, it's 30. Simple children's games, the kind that were Nintendo's stock and trade, are now on the App Store or Google Play.

And if that's not enough, the site VG247 reports multiple game developers have told the site that Amazon is courting them they are preparing a console that will offer streaming and downloading of games, music, movies and TV content. It also says the console will sell for below $300.

With the work done on the Kindle Fire, development of a console should be a breeze. But because they would be using an ARM SoC instead of the AMD x86 SoC like in the PS4 and Xbox One, ports will be a lot harder. I expect, then that the Amazon console would compete more with tablets and microconsoles like the Ouya and Gamestick than the big consoles.

And if Amazon really does this, don't be surprised if Apple suddenly stomps on the gas in regards to Apple TV and stops monkeying around with that little doodad.

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