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Retail

IGDA attacks Amazon Appstore terms

Thu 14 Apr 2011 11:00am GMT / 7:00am EDT / 4:00am PDT
MobileRetail

Retailer accused of using "content as a weapon with which to capture marketshare"

Amazon

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The International Game Developers Association has posted an open letter on its official blog criticising the terms for Amazon's new Android Appstore and warning developers of the precedent that it sets.

Signed by "The IGDA Board of Directors", the letter cites "significant concerns about Amazon's current Appstore distribution terms and the negative impact they may have on the game development community".

Speaking directly to developers, the IGDA warns that Amazon reserves the right to control the pricing of games - as well as the right to pay "the greater of 70% of the purchase price or 20% of the List Price."

Amazon has expressed zero willingness to adjust its distribution terms.

Open letter from the IGDA

"We are not aware of any other retailer having a formal policy of paying a supplier just 20% of the supplier's minimum list price without the supplier's permission," says the letter.

The IGDA is also concerned that Amazon reserves the right to cut the price of any game which is sold on other services. Even a temporary price promotion on another service will result in a lower list price in Amazon's Appstore, according to the IGDA's reading of the terms and conditions.

The open letter goes onto identify five "potentially problematic scenarios"

  • 1. Amazon suddenly creating steep discounts for a significant proportion of its catalogue.
  • 2. Being forced to choose between Amazon and other markets over promotions.
  • 3. Creating a precedent for terms that will make minimum list prices irrelevant.
  • 4. Steep discounts for niche products that significantly reduce a product's revenue potential.
  • 5. Discounting of hit titles when they are already selling well at a higher price.

In summary the IGDA claims that, "under Amazon's current terms, Amazon has little incentive not to use a developer's content as a weapon with which to capture marketshare from competing app stores".

The IGDA has already been in contact with Amazon but claims that the company has "expressed zero willingness to adjust its distribution terms". Nevertheless, the IGDA is insisting that developer's permission should be required before any retailer seeks to pay less than the standard percentage of a developer's minimum list price.

It also argued that developers should have the freedom to set a minimum list price of whatever amount they see fit, without regard to pricing in other app stores.

"We respect Amazon's right to stay the course, but as part of our mission to educate developers, we feel that it is imperative to inform the community of the significant potential downside to Amazon's current Appstore terms," ends the letter. "If you feel similarly, we urge you to communicate your feelings on this matter directly with Amazon."

7 Comments

Patrick Frost QA Project Monitor

400 196 0.5
That is quite a bad situation waiting to happen there. Do developers have to sign up with Amazon particularly to list their games or is it done through other parties?

Posted:3 years ago

#1
I have another problem for you, using games as a loss leader to sell everything else. Quite frankly a developer would need to be crazy to agree to these terms.

Although with the refunds policy on the Android Marketplace that isn't really an option either. Eventually I think Android could quickly go the way of the old mobile games business i.e. through carrier portals with exlusive content as these marketplaces are effectively useless unless you want to "sell" your game for free. It would provide a good revenue stream for both developer and carrier and allow the carrier or even the phone manufacturer to separate them from the competition.

Really what is Amazon's advantage over a smaller more developer friendly one? It doesn't (like most App Store's today) help with marketing (until it's already successful) as there's so many games and apps so the big marketplaces are of little benifit for discoverability.

Personally I think we'll wait until the Xperia Play store is up and working well before we think of Android.

Edited 1 times. Last edit by John Owens on 14th April 2011 10:02pm

Posted:3 years ago

#2

Tom Keresztes Programmer

683 335 0.5
There is a reason why no one repeated the success of the iTunes (both the media and software parts) - mostly because they came up with unacceptable terms. Just check the fees originally associated with Ovi store, for example. Its higher than the budget for most ($1) mobile games.

Posted:3 years ago

#3

Thomas Eidson Senior System Designer, Heatwave Interactive, Inc.

18 0 0.0
I've just stuck with Android's market for apps I've written. I was considering Amazon, but this is quite an eye-opener. Thanks, IGDA!

Posted:3 years ago

#4

Matthew Hill Head of Recruitment, Specialmove

75 26 0.3
Amazon excel in marketing, indeed their customer knowledge is so deep they have (still do ?) sell limited customer analytics data to their suppliers. Regardless I would struggle to sign up to these terms as a developer.

Posted:3 years ago

#5
Mathew, they may excel in marketing their own brand but they aren't going to market a 3rd party developer's game unless it attracts people to it's store, i.e. it's already popular or has a brand behind it, like Angry Birds.

Therefore it's pretty much still up to the developer so again you have to go back to what value do they actually provide except the "chance" that you will make their top ten and then from that exceptional sales will come due to the number of users they have visting their store and because of that their top ten.

I'm not saying that's not something to consider however there are other portals that can do the same job although more and more they're looking for a bigger cut e.g. FreeAppADay.

I suppose I have a issue with how this all works in general as most smaller developers, the content creators are already running on tiny margins and it's these guys who are creating all the cool new games and it's unfortunate that more and more it's the businesses around the industry that are making the money rather than the content creators. It seems wrong.

Posted:3 years ago

#6

Curt Sampson Sofware Developer

596 360 0.6
This is remarkably similar to the play Amazon made in the e-book market. You can read up on that to see what happened....

Posted:3 years ago

#7

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