Amazon bringing physical product shopping into games is a prime example of monetising fandom

Earlier this week, Amazon announced an initiative called Amazon Anywhere. It enables mobile games to offer consumers the ability to purchase physical products (e.g., toys and merchandise) directly inside the game. The first project to adopt this is Peridot, Niantic’s AR game, where gamers can buy physical merchandise and toys in-game.

Amazon Anywhere works for mobile apps more broadly, so will have implications across entertainment and beyond. Looking at the move from the games angle here are our initial thoughts.

Unlocking physical product shopping in mobile games, while users are directly engaged in the session, is a valuable and important step for Amazon as well as mobile games developers because:

1. The excitement and intent to purchase is likely at its highest when gamers are engaged and invested in a session. This means higher conversion rates on product sales.
2. Physical products often command higher absolute price points than digital products, which can help drive growth of in-game sales and revenue more broadly.
3. It encourages games developers to get involved by solving the potential engagement cannibalisation conundrum (i.e., if we sent gamers to the shop and away from our game, are we actually cannibalising engagement with the game itself and impacting long term growth of engagement?)
4. It helps developers monetise fandom, rather than just engagement. This is a key strategic imperative for games companies that hope to grow as cloud gaming starts to grow and devalue access to individual games, similarly to how this took place with music and video streaming. In the streaming era, monetising fandom typically carries higher margins than monetising access. Amazon Anywhere is enabling developers to action this transition effectively. 

MIDiA has frequently reported the incredible value of the gamer segment in recent years. Amazon is recognising the value of this highly engaged, high-spending audience by acknowledging their passion and bringing an e-commerce solution directly to where they socialise, have fun, relax, and self-express. In the saturated attention economy, a key value that companies can deliver to entertainment audiences is to help them make clunky processes more seamless, less time and attention consuming, and to help declutter in the age of information overload. Simultaneously, B2B integrations across sectors and value chains (e.g., e-commerce and games) need to be positioned as ‘win-win-wins’ (meaning they need to work for the vendor, for the end user, and provide incremental value to the partner – the developer in this case – to gain scale). Amazon Anywhere seems to be ticking all three boxes.

Expect e-commerce to become a more prevalent part of the in-game experience in the coming months and years, with some games publishers perhaps even going after the physical product and e-commerce opportunity on their own, in the near-to-mid-term. Watch this space.