A few weeks ago, Amazon finally launched its Android AppStore, a curated experience for purchasing apps for Google’s Android platform. The store, back by Amazon’s considerable brand, looked like it could be great for developers looking for more visibility for their Android titles. According the International Game Developers Association however, the Amazon Appstore isn’t all roses and gravy. The IGDA Board of Directors sent out a message today to all members warning them about Amazon’s terms for app distribution.
“Amazon reserves the right to control the price of your games, as well as the right to pay you "the greater of 70% of the purchase price or 20% of the List Price,” the email explains.
“Furthermore, Amazon dictates that developers cannot set their list price above the lowest list price "available or previously available on any Similar Service." In other words, if you want to sell your content anywhere else, you cannot prevent Amazon from slashing the price of your game by setting a high list price. And if you ever conduct even a temporary price promotion in another market, you must permanently lower your list price in Amazon's market.”
The IGDA feels that the terms offer Amazon too great a leverage over developers. The Board lists five problem scenarios that could occur:
- Amazon lowers the price of your title, but being near the bottom of the list on the Appstore means you don’t see any meaningful sales.
- With guarantee of Amazon getting the lowest list price, developers must either never offer exclusive deals to another distributor, or avoid the Amazon Appstore altogether.
- If Amazon’s terms move forward other Appstores could mirror those terms, creating a hostile market.
- Niche titles could lose out on revenue due to aggressive sales by Amazon.
- Amazon could discount a title during a period where it is already selling well. This action benefits Amazon more than the developer.
The IGDA believes that a developer should be able to determine if their title drops below a stated minimum list price. It also contends that developer should be able to set that minimum list price without regard for other app stores.
“The terms of Amazon's distribution agreement give it significant flexibility to behave in a manner that may harmful to individual developers in the long run. Any goodwill that Amazon shows developers today may evaporate the minute Amazon's Appstore becomes so big that Android developers have no choice but to distribute their content via the store,” the missive continues.
“Amazon does not need the terms it has established for itself in order to give away a free app every day. Nor does it need the powers it has granted itself to execute a wide variety of price promotions. Other digital games platforms, such as Xbox LIVE Arcade and Steam, manage to run effective promotions very frequently without employing these terms.”
These terms do seem a bit draconian, and they mirror similar terms created by Apple for their new subscription model on the App Store. IndustryGamers would like to ask: Have any Android developers experienced greater sales through Amazon’s new platform? Are they experiencing any problems? Let us know.
1 Comments
April 15, 2011
IGDA is right on this one. Amazon is trying to exploit its position and in doing so is putting developers at a severe disadvantage. Giving them control over pricing, including limiting your ability to cut prices elsewhere without impacting your Amazon pricing, is way out of line IMO. Amazon has steamrolled other partners in the past. Developers should stay away from this until the terms become more favorable--you don't want to make a platform that puts you at a disadvantage stronger.