4 Thoughts on Amazon’s Echo, Fire TV and Cloud Gaming Launches

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Like many of its predecessors, the 2020 edition of Amazon.com’s (AMZN) Echo/Alexa event was jam-packed with hardware, software and services announcements.

Among other things, Jeff Bezos’ firm revealed new Echo speakers and Fire TV sticks, a revamped Fire TV UI, Alexa improvements, a cloud gaming service known as Luna, a security service known as Alexa Guard Plus, Ring security products for cars and a $250 autonomous home security drone that for some reason was named the Always Home Cam.

Here are a few thoughts on what Amazon showed off.

1. Amazon’s Cloud Gaming Service Isn’t For Everyone, But it Has a Selling Point or Two

For the time being, the Luna cloud gaming service has more in common with Alphabet’s (GOOGL) Stadia gaming service than with Microsoft’s (MSFT) xCloud service.

Whereas xCloud is bundled with an existing gaming service (Xbox Game Pass Ultimate) and for now only works on Android devices, Luna, like Stadia, is a standalone offering that runs on Fire TV devices, PCs, Macs and iOS web apps (an Android app is said to be on the way). And like Google with Stadia, Amazon has developed an optional low-latency controller for Luna (it costs $50).

There’s also Twitch integration, the ability to shift from playing on one device to another. Unlike Stadia, whose $10/month Pro service supports 4K gaming, many Luna games only support 1080p gaming for now. But Luna’s pricing model appears to be better.

Whereas Stadia bundles access to a small number of free titles and requires users to buy brand-new game licenses for everything else, Amazon plans to sell subscriptions for a variety of Luna game “channels.” A Luna+ channel carries an introductory $5.99/month price and includes access to games such as Resident Evil 7, Control and GRID, and a channel featuring Ubisoft games is on the way.

I wouldn’t count on Luna seeing massive initial sign-ups, given its current content and gameplay limitations. And xCloud should become a formidable rival once it adds support for TVs and PCs. But Luna could gain a healthy following as new channels are added, 4K support expands and gamers get more familiar with cloud gaming services.

2. The Fire TV Revamp Better Positions Amazon Against Roku — Up to a Point

Amazon is refreshing its $40 HD Fire TV Stick with a faster processor, an improved remote and Dolby Atmos audio support. And it’s launching a $30 Fire TV Stick Lite that has a simpler remote and lacks Atmos support, but is otherwise much like the $40 model. Those wanting 4K support will have to buy the existing Fire TV 4K stick, which sells for $50.

Separately, Amazon has overhauled its Fire TV UI, simplifying navigation and adding support for user profiles.

Amazon’s moves put it on somewhat better footing against Roku (ROKU) , which sells a $30 HD-capable stick and $40 and $50 4K-capable sticks (the $50 model adds a voice remote and a better Wi-Fi radio). But with Roku (like Amazon) having long treated its streaming hardware as a loss leader, neither company still has much of a major pricing edge.

More importantly (speaking as the owner of both a Roku stick and a Fire TV stick), Roku still arguably has a UI advantage. Though an improvement, the new Fire TV UI still emphasizes/promotes Amazon’s own content relative to third-party apps, whereas Roku takes a much more neutral approach.

3. The Echo/Alexa Improvements Showcase Amazon’s Speaker and Voice Assistant Strengths

Amazon’s new Echo and Echo Dot speakers feature eye-catching spherical designs, and — with the help of a low-power processor Amazon co-developed with Taiwan’s MediaTek — are able to respond to voice commands faster thanks to support for on-device speech processing.

Meanwhile, Alexa has been updated to ask users questions to help better understand their intent, change its tone based on the nature of a question and let multiple users join a conversation. Alexa also now lets privacy-sensitive users delete voice command of theirs that Alexa has recorded with a single command.

Google Assistant still has an edge on Alexa in terms of the depth of the knowledge base it has access to, and its integrations with Google services such as Calendar, Photos, Gmail, Maps and YouTube also remain a major strength.

But Alexa shows more emotional intelligence than Google Assistant — avoiding superfluous comments, asking follow-up questions and alerting users to new features and notifications when it makes sense to do so. And Amazon more generally seems to be paying a lot of attention to getting the finer details of a user’s interactions with a smart speaker or voice assistant right, as its Thursday announcements show.

4. Amazon’s Strategic Goals Are Worth Remembering Here

In some ways, Amazon is the anti-Apple when it comes to hardware.

By and large, Amazon isn’t interested in profiting (or at least profiting significantly) from hardware sales. And as Jeff Bezos has often stressed, the company isn’t bothered if some of its products and services flop — particularly experimental products targeting promising markets.

More than anything else, Amazon wants its hardware to help keep its customers loyal to its vast array of e-commerce and content services, and by proxy Amazon Prime. And in the process, the company hopes that frequent use of devices such as Echo speakers and Fire TV sticks, as well as the association of Amazon with advanced devices and services, strengthens Amazon’s brand power and consumer mindshare.

That’s why the company is comfortable simultaneously launching three smart speakers, two streaming sticks, two Wi-Fi routers, car security hardware, a home security drone and a smart display with a rotating, face-tracking base.

Not all of these devices will be smash hits, and Amazon won’t make much (if any) money on some of the ones that do sell well. And Amazon is quite alright with all of that.

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