Amazon (NASDAQ:AMZN) entered the streaming set-top box market in grand fashion last week, launching the Fire TV along with promises that the device would fix all of the major issues consumers have with the current selection of streaming boxes. There are plenty of devices already on the market, including Apple (NASDAQ:AAPL) TV, Google (NASDAQ:GOOG) (NASDAQ:GOOGL) Chromecast, Roku, and the various game consoles, but Amazon is looking to differentiate the Fire TV by simplifying the experience. From voice search to near-instant loading of videos, the Fire TV has a lot to offer. However, it's clear that the device was launched before it was ready, and as it stands right now, Fire TV is no game changer.
A steep price to pay
Fire TV is priced at $99, with an optional game controller selling for $40. This is the same price as Apple TV and the Roku 3, although Roku offers a cheaper $49 version as well. The Fire TV comes with a significantly faster processor and more memory than either the Apple TV or the Roku, leading to snappy performance overall.
Google's Chromecast is only $35, and if bare-bones streaming is the goal, Fire TV can't compete with that. Chromecast offers the least expensive way to get content onto the big screen, and it will be difficult for Amazon to compete with that. The big differentiator is games, with the Fire TV's Android-based operating system allowing for Android games to be easily ported to the system. Given the failure of the Ouya, however, it's not clear if there's really any meaningful demand for Android gaming on the TV.
One of Amazon's main arguments when it was unveiling the Fire TV was that search on existing streaming devices is slow and cumbersome. Voice search on the Fire TV is Amazon's solution, but the problem is that it's only integrated with a few different apps. If you voice search for a movie, for example, Amazon will give you options to buy or rent it from Amazon Instant Video, even if it's available for free on Netflix. This requires users to manually search through the Netflix app, where voice search doesn't work at all, effectively crippling the feature that was supposed to make the Fire TV better than the rest.
This integration may come later, but given that such a big deal was made about simplifying search, I question the wisdom of launching the device when this feature is more of a promise than anything else. Early adopters won't be thrilled that the Fire TV's search function is ignoring services like Netflix. I suspect part of the early launch was to get ahead of the expected refresh of Apple TV. A big announcement is expected from Apple in June, and many are anticipating big news on the TV front sometime this year. Apple's Siri could be integrated into the next-gen Apple TV, allowing for voice search as well as tight integration with other iOS devices.
Phone games on the TV
The gaming aspect of the Fire TV gives the device something unique, but it doesn't compare to the game consoles. The Fire TV is essentially a smartphone shoved into a box and connected to the TV, so while it's much faster than other streaming boxes, it's not even close to the current generation, or even the prior generation, of game consoles.
There is one group that may be drawn to the Fire TV for its gaming functions – parents who don't want to spend hundreds of dollars on a proper game console for their kids. For everyone else, I don't see the allure of playing mobile games on a TV. Maybe Amazon will surprise me, but I think that Ouya proved that game consoles don't have much to worry about.
The bottom line
The Fire TV is a good streaming box at a high price and a poor gaming console at a low price, a combination that seems to miss the mark. And given that the big feature, a simple way to search that works, is more promise at this point than reality, the Fire TV isn't the game changer that many were expecting it to be. There are cheaper ways to stream and there are far better ways to game, and the Fire TV appears to be a compromise that many consumers beyond the those already invested in the Amazon ecosystem will be unwilling to make.
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Timothy Green has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, and Google (C shares). The Motley Fool owns shares of Amazon.com, Apple, and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.