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Google Inc (GOOG), Amazon.com, Inc. (AMZN): An Android Tsunami to Wash Away the Video Game Establishment

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First it was indie projects like the Ouya. Then a major tech company, NVIDIA Corporation (NASDAQ:NVDA),  stepped into the market with its handheld SHIELD. Next came reports that Google Inc (NASDAQ:GOOG) was working on a console of its own. And now, Internet retailer Amazon.com, Inc. (NASDAQ:AMZN) is said to be preparing a console to be released this year.

All these devices have two things in common: they’re designed to play video games, and they reportedly run Google’s operating system, Android.

Credit: android-logo-white by incredibleguyAlthough Android gaming remains in its infancy, with titans like Amazon.com, Inc. (NASDAQ:AMZN), NVIDIA and Google Inc (NASDAQ:GOOG) behind it, Android could become the premier video game console.

The benefits to Android gaming

As a video game platform, Android offers a number of advantages, both to consumers and to developers.

From a developer’s perspective, it’s a question of cost and profitability. Mobile development is a streamlined process — one need only code an app and upload it to the corresponding app store. This is why indie video game development has flourished on mobile platforms.

Nat Brown, co-creator of the original Xbox, blogged about a potential revolution that could take place if mobile gaming was brought to the living room. Brown was writing about Apple Inc. (NASDAQ:AAPLspecifically, but his sentiments could easily apply to an Android console.

Brown praised the concept of an open 30% cut app store — a model that allowed him to easily “make money” creating games.

On the other side, from a consumer perspective, it’s also a question of cost: mobile games are generally far cheaper, and given the recent trends in mobile hardware, the consoles themselves could be cheaper. Moreover, they’re largely cross-platform (a game purchased for a consumer’s smartphone can be played on their NVIDIA SHIELD).

Don’t be confused by Android’s current limitations

Most video gamers and video game analysts, looking at the current state of Android gaming, may be inclined to dismiss the upcoming Android revolution.

That’s understandable, but the current landscape of Android gaming is a far cry from its potential.

For starters, the existing Android landscape is a muddled mess of devices — there are literally hundreds of different Android smartphones with screen sizes ranging from 3-inches to 6.3-inches; 7-, 8-, 9-, and 10-inch tablets. This makes it difficult for developers, and is likely a key reason why someone like Brown favors iOS game development over Android.

But there will be far fewer Android consoles — perhaps just two or three — making life easy for game creators.

Secondly, the lack of a physical controller really limits a game’s potential. Touch screens are nice, but as any game player will tell you, nothing beats the traditional keyboard/button setup. Both Google Inc (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN)’s consoles are said to come with full-fledged controllers.

Lastly, the current hardware is limited in its ability to output high definition graphics. There are some good looking mobile games, but they’re nothing compared to the graphics offered by Xbox One or PlayStation 4.

But that’s temporary, and will no doubt change in the coming months. As I’ve previously written, NVIDIA Corporation (NASDAQ:NVDA) has already demoed next-generation mobile chips capable of outputting graphics every bit as good as the traditional dedicated consoles.

More importantly, the mobile space continues to be highly competitive and profitable. Mobile chips grow more powerful each and every year; traditional video game consoles stay static for 5-7 years.

Android gaming could strengthen Google’s operating system

For Google Inc (NASDAQ:GOOG), the shift to Android-based gaming should benefit the search giant by further strengthening its mobile operating system.

Despite absolutely overwhelming Apple Inc. (NASDAQ:AAPL)’s iOS on a market share basis, Android continues to lag Apple in software — in particular, games. Although most might view gaming as a superfluous activity, it occupies a surprisingly large amount of the time people spend on their mobile devices (Business Insider says 43% of the time people are on their mobile devices, they’re playing games).

At Google Inc (NASDAQ:GOOG)’s I/O conference in May, it emphasized the new features it’s building into Android to make it better for gaming — online multiplayer, achievements and leaderboards.

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