AWS has lower upfront cost, doesn't require hardware management, and it's easier to provision consistent servers during growth or temporary peaks. Ideal for an unstable clustered system being run by a startup.
I'm mainly talking about EC2, since some other offerings aren't suitable for responsive games. I tried a SimpleDB backend to be hip a couple years back, but it has latency and designed failure rates that are impossible.
I haven't done the math but I'm guessing that with a popular game the costs of hardware and hiring someone to do server management would be wiped out by EC2 costs pretty quickly.
Not sure how spikey game traffic is, but it would seem unlikely that your game is super popular for a day and then drops right off the next as would be the case for many websites.
For example if your game business model is charging some nominal fee per month (say $10) you might find that heavy players can burn through way more than $10 worth of EC2 traffic in a month.
Anyone know if any popular games are hosted on EC2?
Not sure, though I think the Sony servers are simply used for matchmaking and authentication services and do not actually host most of the games themselves, that is delegated to consoles.
I'm mainly talking about EC2, since some other offerings aren't suitable for responsive games. I tried a SimpleDB backend to be hip a couple years back, but it has latency and designed failure rates that are impossible.