Amazon Scales Back Gaming Ambitions Amid 14,000 Layoffs

Amazon is pulling back from blockbuster games. The company is laying off 14,000 people, including some across its gaming division. According to an internal memo reviewed by Bloomberg, those cuts include halting a “significant amount of our first-party AAA game development work–specifically around MMOs–within Amazon Game Studios.” The company had previously announced an ambitious Lord of the Rings MMORPG.

“While we’re proud of our successes in first-party AAA game development and publishing, we have made the difficult decision to halt a significant amount of our first-party AAA game development work–specifically around MMOs–within Amazon Game Studios, including making significant role reductions in our studios in Irvine and San Diego, as well as our central publishing team,” Amazon head of games, Twitch, and audio Steve Boom wrote in an email to staff, reports Bloomberg.

Amazon has mostly struggled in the world of game development outside of 2021’s MMO New World. It’s only other hits like Lost Ark and Throne and Liberty were developed by external partners. It’s currently set to publish the next Tomb Raider game as well as several other unannounced projects, including an internally developed Lord of the Rings MMO and an online AAA action-RPG. It’s now unclear if those projects will move on or be canceled.

The latest cuts come amid a recent overhaul of Amazon’s cloud gaming service Luna, with an emphasis on party games including one powered by an AI Snoop Dogg avatar. Amazon has also reworked its Prime Game program and seemingly scaled back ambitions for its video streaming platform Twitch over the years. Its gaming retreat comes as companies race to exploit a new gold rush in AI technology.

“Some may ask why we’re reducing roles when the company is performing well,” Amaozn’s head of people experience, Beth Galetti, wrote in a new blog post on Tuesday. “Across our businesses, we’re delivering great customer experiences every day, innovating at a rapid rate, and producing strong business results. What we need to remember is that the world is changing quickly. This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones). We’re convinced that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business.”