Alexa will lose around $10 billion for Amazon in 2022
People aren’t buying things through Alexa like Amazon wants.
Alexa has been one of Amazon’s biggest projects, but the voice assistant and its related products will lose the company around $10 billion this year.
A recent report from Insider explains how the company’s plans to monetize Alexa and Echo products have yet to come to fruition.
Worldwide Digital is the department at Amazon that oversees Alexa, Echo devices, and Prime Video. Insider collected documents showing that the department lost $3 billion in the first quarter of 2022 alone.
Originally, the idea behind Alexa and Echo devices was a simple one.
Amazon hoped that people would use its voice assistant to make purchases through Echo devices. However, that didn’t stick the way the company hoped.
Alexa has become relatively popular in people’s homes, reaching around a billion weekly interactions. However, most of these interactions are not monetizable, meaning Amazon isn’t making any money when you use Alexa.
Additionally, Alexa devices have been the center of a few controversies. The platform was ridiculed in 2018 for sending audio recordings to the wrong person.
And just last year, Alexa encouraged children to complete a challenge to electrocute themselves on wall outlets.
Just last week, reports of thousands of Amazon layoffs hit the headlines. It was later confirmed that many of those layoffs came from Amazon’s Devices & Services team, overseeing Alexa development.
Amazon’s Alexa likely isn’t going anywhere soon. But it looks like the company will have to adjust its goals for the product if it wants to make Alexa and related devices profitable in the future.
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