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Amazon Gets Anti-Social With Zynga

E-commerce giant launches its first social game


There seems to be no end to the ambitions of Amazon (NASDAQ:AMZN). Once an online bookstore, it turned to general retail. Once an e-tailing titan, it turned to tablets.

And now, it has turned to gaming.

Amazon on Tuesday announced the launch of its first social game: Living Classics. It allows users to explore worlds like Alice in Wonderland and The Wizard of Oz.

The game is the mastermind of the newly assembled Amazon Game Studios, which plans to release more titles. The company also launched GameCircle, which is a destination for gamers to meet up.

No doubt, this announcement is a clear shot across the bow at social gamemaker Zynga (NASDAQ:ZNGA). According to BusinessInsider, Amazon already was poaching employees from the game giant (likely an easier task as Zynga’s stock price has plunged.)

Amazon is a serious threat. The company has a massive distribution network and can leverage its Kindle franchise. Plus, Amazon already is known as a low-cost provider, and it could put pressure on the margins for the social gaming industry.

Investors don’t seem to be immediately worried about the news, as ZNGA’s stock actually is up 4% today. But considering the 80% haircut the stock has taken in the past few months, that positivity likely is just bottom-fishers looking for a trade.

Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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