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Amazon made video games for its workers to reduce tedium of warehouse jobs

The games are voluntary and have been deployed at five Amazon warehouses.

 

Playing the games is voluntary. No images of the games were revealed, but the Post said the games have names such as "MissionRacer, PicksInSpace, Dragon Duel, and CastleCrafter" and "have simple graphics akin to early Nintendo games like Super Mario Bros." Workers described the games to the Post on condition of anonymity.

 

https://arstechnica.com/information-technology/2019/05/amazon-gamifies-its-warehouse-work-like-tetris-but-with-real-boxes/

 

Almost as good as Tesla's worker incentives.

 

https://www.sfgate.com/business/article/Elon-Musk-promises-frozen-yogurt-roller-coaster-10966087.php

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There's a business growing within Amazon that could one day be worth more than retail or cloud

https://www.cnbc.com/2019/03/19/amazon-business-could-be-worth-more-than-core-retail-e-commerce.html

 

"Amazon Business is just beginning to establish itself, Bank of America projects there is a total addressable market for e-commerce B2B of $1.4 trillion by 2021, which is nearly double the firm's estimated $761 billion market for consumer e-commerce. Essentially, the market potential for Amazon Business is about twice the potential for its core retail business."

 

I'm surprised they took so long to get into this. I feel like its even lower hanging fruit than e-commerce. B2B has horribly uncompetitive and non-transparent pricing.

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There's a business growing within Amazon that could one day be worth more than retail or cloud

https://www.cnbc.com/2019/03/19/amazon-business-could-be-worth-more-than-core-retail-e-commerce.html

 

"Amazon Business is just beginning to establish itself, Bank of America projects there is a total addressable market for e-commerce B2B of $1.4 trillion by 2021, which is nearly double the firm's estimated $761 billion market for consumer e-commerce. Essentially, the market potential for Amazon Business is about twice the potential for its core retail business."

 

I'm surprised they took so long to get into this. I feel like its even lower hanging fruit than e-commerce. B2B has horribly uncompetitive and non-transparent pricing.

 

AmazonSupply launched in 2012. Since relaunched as Amazon Business.

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https://venturebeat.com/2019/07/10/amazon-and-leyou-will-make-a-lord-of-the-rings-pc-and-console-game/

 

Amazon Game Studios will collaborate with Hong Kong-based Leyou Technologies and Middle-earth Enterprises to develop and publish a free-to-play massively multiplayer online (MMO) game based on the milestone fantasy literary work The Lord of the Rings

 

Constantly branching out and trying new things...

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https://venturebeat.com/2019/07/10/amazon-and-leyou-will-make-a-lord-of-the-rings-pc-and-console-game/

 

Amazon Game Studios will collaborate with Hong Kong-based Leyou Technologies and Middle-earth Enterprises to develop and publish a free-to-play massively multiplayer online (MMO) game based on the milestone fantasy literary work The Lord of the Rings

 

Constantly branching out and trying new things...

 

Free to play.....meaning loot boxes and other in-game purchases.....further meaning consumers will hate it. Hopefully they think of a solution to this as $EA has been ripped to shreds over this. Not to mention the lawsuits they are incurring. LOTRO already exists and has a good following. Shadow of Middle Earth failed massively this past year. The Lord of the Rings series has been covered extensively across all gaming platforms. I wonder why they still think there is a market for this specific game? Player base seems highly fractured.

 

Gaming in general is an industry I'm staying out of. Seems highly fractured and consumers are constantly disappointing with AAA releases. Reminds me a bit of 1983 video game crisis where everyone is putting out the next best game. You know there are issues when game makers are struggling to develop new themes and are instead preying on a now slightly older generations nostalgia from the early to mid 2000's for some quick sales. Until there is something truly new in the market I'll park my money elsewhere. But it's Amazon so who knows!

 

Castanza

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Free to play.....meaning loot boxes and other in-game purchases.....further meaning consumers will hate it. Hopefully they think of a solution to this as $EA has been ripped to shreds over this. Not to mention the lawsuits they are incurring. LOTRO already exists and has a good following. Shadow of Middle Earth failed massively this past year. The Lord of the Rings series has been covered extensively across all gaming platforms. I wonder why they still think there is a market for this specific game? Player base seems highly fractured.

 

Gaming in general is an industry I'm staying out of. Seems highly fractured and consumers are constantly disappointing with AAA releases. Reminds me a bit of 1983 video game crisis where everyone is putting out the next best game. You know there are issues when game makers are struggling to develop new themes and are instead preying on a now slightly older generations nostalgia from the early to mid 2000's for some quick sales. Until there is something truly new in the market I'll park my money elsewhere. But it's Amazon so who knows!

 

Castanza

 

Lots of stuff you got wrong in this reply...

 

Free to play means consumers will hate it? 4 of the top 5 MOST PLAYED games in the US are free-to-play. In fact, only 3 of the top 10 are paid games at all. I see the statement all over this forum that F2P means loot boxes. It doesn't. League of Legends, Fortnite, CS GO, Dota 2 - all F2P and all monetized via cosmetic purchases, not loot boxes. And gamers love that stuff.

 

Gaming industry seems highly fractured? Over the past ten years it's becoming increasingly consolidated, and likely will continue to consolidate as the gravity of the large publishers sucks in smaller publishers and dev teams. The top 10 publishers have almost 50% of the market share and that number is only increasing.

 

Consumers are constantly disappointed with AAA releases? Red Dead Redemption 2 sold 24 million copies in like 6 months. God of War sold 10 million copies last year. There are some extremely highly anticipated games, some with new IP, coming in the next year or two (Cyberpunk, Death Stranding, Last of Us 2, etc).

 

Frankly, sounds like you're just shooting from the hip on this response and haven't really done any work in the space.

 

 

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Free to play.....meaning loot boxes and other in-game purchases.....further meaning consumers will hate it. Hopefully they think of a solution to this as $EA has been ripped to shreds over this. Not to mention the lawsuits they are incurring. LOTRO already exists and has a good following. Shadow of Middle Earth failed massively this past year. The Lord of the Rings series has been covered extensively across all gaming platforms. I wonder why they still think there is a market for this specific game? Player base seems highly fractured.

 

Gaming in general is an industry I'm staying out of. Seems highly fractured and consumers are constantly disappointing with AAA releases. Reminds me a bit of 1983 video game crisis where everyone is putting out the next best game. You know there are issues when game makers are struggling to develop new themes and are instead preying on a now slightly older generations nostalgia from the early to mid 2000's for some quick sales. Until there is something truly new in the market I'll park my money elsewhere. But it's Amazon so who knows!

 

Castanza

 

Lots of stuff you got wrong in this reply...

 

Free to play means consumers will hate it? 4 of the top 5 MOST PLAYED games in the US are free-to-play. In fact, only 3 of the top 10 are paid games at all. I see the statement all over this forum that F2P means loot boxes. It doesn't. League of Legends, Fortnite, CS GO, Dota 2 - all F2P and all monetized via cosmetic purchases, not loot boxes. And gamers love that stuff.

 

Gaming industry seems highly fractured? Over the past ten years it's becoming increasingly consolidated, and likely will continue to consolidate as the gravity of the large publishers sucks in smaller publishers and dev teams. The top 10 publishers have almost 50% of the market share and that number is only increasing.

 

Consumers are constantly disappointed with AAA releases? Red Dead Redemption 2 sold 24 million copies in like 6 months. God of War sold 10 million copies last year. There are some extremely highly anticipated games, some with new IP, coming in the next year or two (Cyberpunk, Death Stranding, Last of Us 2, etc).

 

Frankly, sounds like you're just shooting from the hip on this response and haven't really done any work in the space.

 

We probably should continue this discussion in another thread as not to clutter the Amazon one.

 

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/video-gaming-industry/

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For those who, like me, weren't familiar with PillPack, here's what they do:

 

 

Pretty clever. And licensed in 49 states.

 

Video found via @bluff_capital on Twitter.

 

Looks like they are pretty small - about $100M in revenue.

 

Yeah, they're def not buying revenue.

 

One easy way to get more scale is to use it internally with Amazon's employees, and use it with the JPM-BRK health partnership too.

 

They're positioning themselves for the long-term, and this is one more piece of the puzzle, IMO.

There is apparently progress on this front as disruption meets resistance.

https://www.insurancejournal.com/news/national/2019/09/19/540432.htm

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So, I have been working with Aswath’s valuation spreadsheet and updated the Y2018 numbers with more current Q1+Q2 numbers. There was also a small incorrectness in his spreadsheet where the years to convergence revenue growth rate was hardcoded at 5 years and I have changed that so the years to convergence numbers now actually does change the revenue growth rate trajectory.

 

I get a value of ~$1565/ share, which is somewhat below the current share price of $1740, but not ridiculously so. Aswath has assumed NT growth rate of 15%, but the most important valuation driver seems to be the 12.5%  EBIT margin assumption. This assumption by itself seems a bit questionable because I don’t think that  AMZN has an EBIT Target, but uses more of a customer LTV. This can be seen by initiatives like 1 day shipping which for sure cause a margin hit, but may increase the customer LTV. Anyhow, I attach this spreadsheet and of course all comment and suggestions are welcome.

 

http://aswathdamodaran.blogspot.com/search?q=Amazon

AmazonSept19.xlsx

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