What Amazon’s $10M GameSparks Acquisition Means for Game BaaS

Amazon just acquired GameSparks for a reported $10M.

GameSparks is a video game backend-as-a-service (BaaS) startup. Back-end services offer infrastructure for hosting, scaling, and delivering software. BaaS for video games includes systems like user accounts, achievements, leaderboards, multiplayer support, live ops, and payment processing.

Here’s what we can learn from the deal.

1. BaaS is a necessity for a complete game development and distribution offering.

Amazon has spent years and billions of dollars building and buying a complete pipeline for making and selling video games. Amazon now has services for game development (Lumberyard), distribution (the Kindle Fire Store and Amazon Underground), and promotion (2014's billion-dollar Twitch acquisition). The GameSparks deal is Amazon’s acknowledgement that a complete pipeline for creating video games includes BaaS too. Why?

2. A modern video game is a service, not a product.

20 years ago, video games were sold as retail products at brick and mortar stores. This model was threatened by the rise of subscription-based games like World of Warcraft, and the smartphone revolution has made it entirely obsolete. The world’s most profitable games are built on a service model: the game itself is a content platform, and the continuous flow of content (monetized via a subscription or in-app purchases) keeps the player engaged for years.

BaaS gives game creators the power to manage their game and its players in real time without creating proprietary back-end tools or managing a bevy of platform-specific ones (Apple, Google, Steam, Microsoft, and Sony all have user account systems, but they only work on their respective devices). Brinkbit also puts special focus on the CMS side of our offering: we let developers inject new characters, levels, and items into a game instantly, and create limited-time sales and promotions. BaaS means getting to market faster and retaining your most valuable players.

3. $10 million is just the beginning.

For us at Brinkbit, the most surprising thing about the GameSparks acquisition is just how good a deal Amazon is getting. $10 million is a drop in the bucket: competitor PlayFab has already raised $13 million in funding, forecasting a much greater value at maturity.

The entire BaaS market, valued at just $1 billion in 2015, is projected to grow to $28B by 2020. And with the gross revenue of the video games software industry approaching $100 billion annually, video games BaaS will make up a substantial part of that. The BaaS startup that understands the needs of game developers and players is positioned for rapid growth.

Brinkbit is a backend-as-a-service for video games, now in closed beta. Sign up today or send me a message: evan@brinkbit.com.