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Game Developer Group Warns Against Amazon Appstore 142

Posted by Soulskill
from the money-vs-control dept.
The International Game Developers Association has posted a warning to the game development community about the Amazon Appstore's distribution terms, detailing several unfavorable situations possible under the rules and saying, "Amazon has little incentive not to use a developer's content as a weapon with which to capture marketshare from competing app stores." "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. Amazon may further argue that its success depends on the success of its development partners, and therefore, that it would never abuse the terms of its distribution agreement. Given that Amazon can (and currently does) function perfectly well without these terms in other markets, it is unclear why game developers should take a leap of faith on Amazon’s behalf. Such leaps are rarely rewarded once a retailer achieves dominance."
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Game Developer Group Warns Against Amazon Appstore

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  • Competition (Score:4, Insightful)

    by pablo_max (626328) on Friday April 15, 2011 @06:47AM (#35826834)

    Here is the big difference with Android and Apple. Competition. There are other stores you can sell your crap in when you dont like the terms of one.

    • by NoAkai (2036200)
      True. But as a dev, you'd want to expose your product on as many markets as possible, and I fear that some devs may not be too careful about what license aggreements they accept, and bam, suddenly the entire gaming community is tied up in ridiculous licensing distputes. But I may just be a bit pessimistic, I dunno...
    • But commercial app developers will feel the need to get their apps on as many top tier app stores as possible. Otherwise they are leaving money on the table for THEIR competitors. And so most will swallow these awful terms in the contract.

      And Apple must be glad to have Amazon around. It makes their terms look very reasonable indeed.

      • That's the whole point of the advisory- that it's not necessarily in a developer's interest to be sold in every outlet. Take scenario 5 from the letter which suggests a way Amazon can cause a lot of harm to a developer:

        5) Amazon steeply discounts (or makes entirely free) a hit game at a time when the game is already selling extremely well. This sort of promotional activity may attract consumers away from competing markets and into Amazon’s arms. But it might actually represent a net loss for the developer, which was already doing quite well and didn’t need to firesale its game at that moment in time.

        Amazon could put Angry Birds on a 100% discount to entice tens of thousands of people to add its store to their devices. It costs Amazon nothing. It's gaining customers, not making a profit, but not actually losing money, because the developer isn't making money either. The only loser is

        • Well it WOULD lose money, assuming the list price of Angry Birds was non-zero they still have to pay you 20% of that.

          You'd stil have to be UTTERLY insane, or desperate, to sign up though.

        • Amazon could put Angry Birds on a 100% discount to entice tens of thousands of people to add its store to their devices. It costs Amazon nothing.

          That's not quite true. Amazon has to pay the greater of 70% of the selling price (which here is zero) and 20% of the list price. If Rovio had listed it with Amazon as a 99c app, then Amazon owe Rovio 20c for every copy the give away.

          If a developer doesn't know better, they'll follow the "common sense" you pointed out.

          It's not a matter of "common sense", it's a matter of game theory. Individual developers will see it as in his best interests to list on as many top tier stores as possible. Because their competitors surely will. But the sum total is bad for the industry, and so bad for all deve

          • It's not a matter of "common sense", it's a matter of game theory. Individual developers will see it as in his best interests to list on as many top tier stores as possible

            Isn't that jumping the gun a little, though? Amazon has considerable marketing power, it true. But that doesn't mean they're going to emerge as a top tier app store any more than Microsoft's money and brand guarantees that Windows Phone 7 will emerge as market leader.

            Generally the rule seems to be "first get your lock in, then abuse y

    • There are other stores you can sell your crap in when you dont like the terms of one.

      But no store reaches everyone. People using AT&T, soon to be the only nationwide U.S. GSM carrier, have only Android Market because all other stores require the user to turn on the "Unknown sources" checkbox that AT&T has removed from its branded phones. The very few who brought their own unlocked phone, then they still paid for a free phone that they'll never use because AT&T gives no discount on SIM-only service, unlike a carrier that it's acquiring. People using an Archos device or other devi

  • Hold up a sec.... (Score:4, Interesting)

    by Anonymous Coward on Friday April 15, 2011 @07:09AM (#35826912)

    "Amazon has little incentive not to use a developer's content as a weapon with which to capture market share from competing app stores."

    I'm no Donald Trump but isn't that what business is? Battling competitors for market share? Sounds to me like that union is afraid of its impending irrelevance.

    • I'm no Donald Trump but isn't that what business is? Battling competitors for market share?

      Ha! And I thought business was about offering an innovative product with features and a price that makes people buy it...silly me!

    • by circusboy (580130)

      Which might explain Trump's three bankruptcies...

      It's always interesting to watch a store, battling for marketshare, destroy the source of its products, who are battling for marketshare, all in the name of "good business"

    • Competition abounds and that is generally good for people. This is the same thing game makers on the PC have to deal with. Ever look at Impulse or Steam or Direct2Drive? They have sales all the time. They are fighting with each other and with retail stores to win over more market. Games get deeply discounted and it isn't as though the distributor is taking all the hit on that, the developer sees less per copy too.

      However when you look in to it, you find it has been a real boon to small developers. When a sa

    • the problem here is that the contract that amazon offers is anti-competitive with respect to the developer.

      Amazon say to me (the developer) that if I offer anyone else a lower price, then I have to permanently lower my price on the amazon store.

      So newStoreTwo comes to me and offers to feature me on the front page in return for a 10% discount. That sounds like a store is competing to sell my product.

      Amazon cries 'no fair' and stops this kind of competition.

      The next step is when Amazon turn round and say that

  • by pmontra (738736) on Friday April 15, 2011 @07:22AM (#35826968) Homepage

    The problem is that somebody will be lured by Amazon brand, their shop will become big and drive prices down toward zero. Economics always win and this is probably a necessary consequence of the very nature of computer programs. I explain:

    1. We know that software can be copied at almost no cost, just like digitalized music, books and movies.
    2. We also know that digitalization made music prices plummet and that artists are looking for new business models (maybe they should learn from their grand-grandparents 100+ years ago, before recorded music).
    3. That's going to happen to books and movies (majors are trying to save themselves with 3D and other stuff difficult to reproduce at home).
    4. It is only natural that it happens to computer programs.

    We should prepare for a world where our products will be exchanged for free or a price near to zero. So how are we going to pay our bills? The only answers for most of us is custom software development. Luckily this is what I did for the last 18 years so I'm in a good position. You're also in a good position for some time if you sell Photoshop or Excel, but they have already lowly priced competitors that are good for many people. Even Windows will suffer: people will progressively move from the desktop to the mobile and desktop OSes will share the same fate with mainframe OSes, still alive but interesting only for some professionals (and the day will come that even Apple will stop tying its phones to a desktop OS) .

    • by errandum (2014454)

      I think there is more to it than that.

      I believe that the main point is not bothering that the offline part of the content gets freely distributed. But have premium features that require on-line accounts that will serve you ads / cost money.

      I believe that's the way, and it's just an evolution of that time where you got a demo software from some magazine and then had to pay for the full thing.

      • I believe that the main point is not bothering that the offline part of the content gets freely distributed. But have premium features that require on-line accounts that will serve you ads / cost money.

        I don't necessarily think every video game genre is amenable to being made MMO. Let's try an exercise: think of what "premium features" would enhance a Wii game like New Super Mario Bros. Wii or Super Mario Galaxy 2 or Super Smash Bros. Brawl. Are there any? And if by "premium features" you mean everything past the first level, you get crap like the continuously online DRM of Assassin's Creed 2, which can't be played on the bus (no bus I've ever been on has had Wi-Fi) or even at the bus stop (mall Wi-Fi is

        • Half the buses in our town have wifi....

          • Half the buses in our town have wifi

            My experience differs. The city buses in Fort Wayne, Indiana [fwcitilink.com], have no outlets and no Wi-Fi. Nor do the Lakefront and Greyhound motor coaches between Fort Wayne, Indiana, and Milwaukee, Wisconsin, that I rode back in March of this year to go to the Midwest Gaming Classic. (Greyhound offers Greyhound Express service on some of its routes, but Fort Wayne is not among them.) A publisher of video games capable of running on laptops and handheld devices has to be aware of this lack of connectivity among many of i

    • by poetmatt (793785) on Friday April 15, 2011 @07:56AM (#35827110) Journal

      Is this supposed to be a problem though? I don't really see it as one, honestly.

      It's called: here is your market, you make money this way -> X

      and then becomes: your market has changed, your old way of making money is now free, find a new way.

      nothing really problematic, that's just a market shift.

      • It's called: here is your market, you make money this way -> X

        and then becomes: your market has changed, your old way of making money is now free, find a new way.

        Specifically, the problem is the last step. It sounds so easy on paper, but nobody has actually come up with and implemented an adequate "new way". There's been lots of suggestions, but none of them have actually worked for any more than a small handful of artists, most of which use them as a gimmicks or experiments, before working under the cop

        • by poetmatt (793785)

          The only people who can't come up with new ways to make money are either a: dinosaurs or b: people who wish to go out of business.

          Lots of people have already found successful alternatives, the free product simply makes your other offerings more valuable. This is not a mystery or difficult. these things have worked for hundreds of artists, but it still involves hard work. It's far easier to make money now than it used to be, just not for the labels themselves. Surprise? they need to get over the gatekeeper r [techdirt.com]

          • The only people who can't come up with new ways to make money are either a: dinosaurs or b: people who wish to go out of business.

            That often holds in capitalism (if it didn't, then capitalism wouldn't work), but there are examples where this has failed. In fact, any time anyone sells anything that is actively not wanted by the population, then it becomes practically impossible to stay in the market, no matter how creative your brain is for finding new ways to sell your product. So, instantly, we can obtain

    • by drinkypoo (153816)

      The problem is that somebody will be lured by Amazon brand, their shop will become big and drive prices down toward zero.

      That's a problem? I thought it was called progress.

      • The traditional business model for selling video games to the public amortizes the (possibly multi-million-USD) cost of making the first copy over the price of all sold copies. If the price of each copy is driven toward zero, how do you recommend recovering the cost of making the first copy?
        • by protektor (63514)

          The amount required to recover on mobile games is exceedingly small which is why so many garage developers are able to get in on the game. It is also why so many of the big development houses are in the game because costs are small and profits are a much higher percentage. So even at $0.10 a copy it doesn't take long to recover the development costs. If you doubt that you might want to look at the amazingly large volume per month that apps are doing that are in the top 300 in the iTunes store. I last heard

        • If the price of each copy is driven toward zero, how do you recommend recovering the cost of making the first copy?

          Worry more about making good games than spending 80% of the development budget on hours of photorealistic cutscenes voiced by A- and B-list talent?

          • by tepples (727027)
            But if the price is driven toward zero, then how will even a game as simple as Bejeweled get made? Someone has to pay for the incorporation papers, someone has to pay for the secure office, and someone has to pay for advertising the game even if only through AdWords.
    • by xednieht (1117791)
      "We should prepare for a world where our products will be exchanged for free" - Really??? how bout giving me your car now to get this model started.
  • by wren337 (182018) on Friday April 15, 2011 @07:42AM (#35827040) Homepage

    At best buy or sam's club you'll find a PC with a distinct model number - the manufacturer produces it just for that chain. Makes price matching more difficult and lets the chains show lower prices etc.

    So you make an Amazon version of your game with a different name. Maybe "Game Lite" or something similar enough to the normal name to ensure your people can find you, but different enough that you can legitimately say it's not the same game. Maybe leave out some levels or change backgrounds. Now you can set whatever list price you want - this game has never been offered before.

    Bonus - your core audience will buy this one to, so they have every version.

    • by $1uck (710826)
      My thoughts exactly.... that's what I get for just reading headlines before posting.
  • by thegarbz (1787294) on Friday April 15, 2011 @07:52AM (#35827090)

    I wonder why developers bother with Amazon at all. Their app store is incredibly limited by their stupid policies. Angry Birds Rio was an exclusive release on the Amazon app store, and given away for free. .... But doesn't work outside the US. End result is that despite the game was being given away, and the previous version was available add supported, Android forums were full of questions relating to piracy of the game.

    It's fucking 2011. Angry Birds Rio is not some kind military weapon, it doesn't use encryption that will breach US export laws. Amazon why will you send me practically anything but not offer me a digital download?

    On top of that you know my address from my account, why did you let me waste 20min downloading your stupid appstore app, then force me to setup a one click account for something you're giving away for free before giving me an error saying the store is available in the US only?

    Amazon I extend my middle finger to you, and to those developers who will use Amazon I look forward to finding your apps on bit-torrent if you don't offer a download or an alternative app store.

    • by elrous0 (869638) *

      It's the same with movies. Weird international distribution agreements give us fun stuff like region coding, DRM restrictions based on ISP location, etc.

      It may be the 21st century, but international media distribution is still stuck firmly in the 20th. Most licensing agreements are still based on conventions from the days when all media was sold via a physical copy in a brick-and-mortar local store.

    • by protektor (63514)

      Actually Angry Bird's Rio was not exclusive to Amazon. You can get it on the Android Market, you can get it from iTunes. So it clearly isn't an exclusive in any possible sense of the word.

      Amazon AppStore
      http://www.amazon.com/gp/product/B004SBS8LA/ref=bt_atcg_mine_img_0?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-2&pf_rd_r=0PHR5R090MXJ5QMY29TC&pf_rd_t=101&pf_rd_p=1293151222&pf_rd_i=2478844011 [amazon.com]
      Android Market
      https://market.android.com/details?id=com.rovio.angrybirdsrio&feature=search_result [android.com]
      iTun

      • Vizzini, is that you?
      • by thegarbz (1787294)

        Actually Angry Bird's Rio was not exclusive to Amazon.

        It isn't NOW. It was announced exclusive to Amazon a month before its release. Rovio came out and said 5 days AFTER the Amazon release that they do intend to release an ad supported version on the Android market. But you know what? The damage is done. Normally pirated apps are not overly prevalent for the Android platform and when you do find some the torrents may have 5 or 6 seeds, or be bunched up in a "3000 greatest apps" torrent. Not this time though. Angry Birds Rio torrents had about 60 seeds the day

    • by getNewNickName (980625) on Friday April 15, 2011 @10:39AM (#35828514)
      Amazon wants to trumpet download numbers for their appstore app for some press release, so they let foreign users download the app whether or not they can actually access any content.
      • by Zebedeu (739988)

        That's ok, but at least warn the user when the app first starts that he won't be able to use it for anything.

        But no, they chose to do that only after you've logged it, configured and activated their shitty one-click service (which can't be done from the app, so you have to go to your browser), and finally attempt to use the damn market.

        I'm all for competition in the Android app market, but Amazon's attempt just left me with a bad taste since the very inception. I hope they're able to pick up their game, but

  • My answer to this would be simple... any game going for sale in Amazon's marketplace would be "unique." Some small slight change or tweak making the game different from any other game sold in any other marketplace. That way I'd be free to price both games however I wish.
  • When Amazon lowers its prices of apps, it lowers the amount of money they can make off selling the app. If consumers were willing to pay for it, Amazon would charge $10 for a $1 dollar apps so they can collect 10x the amount of money.

    Why would Amazon want to lower the price of a $1 app to 20 cents when 100% of the revenue goes to the developer?

    Amazon believes that it is better at pricing the apps than the average developer which is why it has these policies. When Amazon lowers the price of apps for prom

    • by BitZtream (692029)

      Because after a period of time, after they've driven the other markets out of business ... they can raise the price to whatever they want.

      They'll use their size and bank account to effectively give away things in order to make other businesses unprofitable, its a rather common tactic.

    • Why would Amazon want to lower the price of a $1 app to 20 cents when 100% of the revenue goes to the developer?

      First of all, you illustrate the problem. You just gave the developer 20 cents, when he priced the app hoping for 70 cents. On Android Marketplace, he would get 70 cents. On App Store he would get 70 cents.

      Second of all, why? I don't know... maybe SOLELY to undercut Google, since it's THEIR app store, and they are trying to establish marketshare, and combat the (temporary) problem of how hard it is to install the app on most phones, when long term they hope to convince carriers to add their store from day

  • This has to be one of the most stupid things I have ever heard from a industry group.

    "1) Amazon steeply discounts a large chunk of its Appstore catalog (imagine: “our top 100-rated games are all 75% off!”). Some developers will probably win in this scenario, but some developers — most likely, those near the bottom of the list — will lose, not gaining enough sales to offset the loss in revenue per sale. Amazon benefits the most, because it captures all the customer goodwill generated

    • by circusboy (580130) on Friday April 15, 2011 @10:17AM (#35828260)

      But at least at iTunes, each developer is the one mucking with the price, for their own benefit/loss/risk. The amazon method is to muck with the price of the product whether or not the developer wants them too, primarily for amazon's benefit/loss/risk.

      • The beauty of Android is that both users and developers have a choice. If you want to control prices yourself, publish to Market. If you want to give Amazon the reigns, publish to Appstore. If it turns out that Appstore actually gives more money to their developers because they are better at pricing things to maximize sales, then more developers will head their way. Free market will decide which model is best (though, most likely, both will remain, since a single model may not be the best for everyone).

    • by MMORG (311325) on Friday April 15, 2011 @01:17PM (#35830552)

      All that has to happen is a developer doesn't give away the game and this never happens. I don't see the problem here at all. I should also mention that I have noticed huge numbers of apps that go on sale at a discount when first released then a few weeks later the price goes up. So I'm not sure I even see their point here at all when it seems this is an industry standard.

      I think you didn't read the article carefully enough. The point is that that the developer surrenders essentially all control over their own pricing when they put something in the Amazon store. Amazon can just unilaterally tell you, "Oh, by the way, we're giving away your app this month. Don't like it? Tough." Now, yes, Amazon still has to give you a little bit of money in that case, but the definition of "a little bit" is pretty darn small: 20% of the list price, where the list price *must* be the lowest price you've ever sold your content at, ever, anywhere.

      The point isn't that Amazon might engage in volume-based pricing strategies. Yes, times are changing and old retailing strategies don't always work. The point is that when you put your app in the Amazon store you surrender any ability to make your own decisions about your pricing strategy. Instead you hand your pricing strategy to another party who has very different goals than you do and will likely choose a pricing strategy that will optimize for their goals, not for your goals. If you're ok with that, then fine. But be aware of what's going to happen.

  • Given that Amazon can (and currently does) function perfectly well without these terms in other markets, it is unclear why game developers should take a leap of faith on Amazon’s behalf. Such leaps are rarely rewarded once a retailer achieves dominance."

    So... uh, don't? It only succeeds if enough developers jump on board; and if they do, then clearly it's not that much of a leap of faith for them.

    And if Amazon does turn around and abuse this... we can walk away from the table. If, that is, our principles are worth more than the paycheck.

  • Amazon AND Apple give away free mp3's to keep people coming into their only stores daily. Amazon did the logical thing and applied this to apps. And let me tell you, most of them are CRAP not worth paying for. Every once in a while, a gem like the WolframAlpha app pops up, but not that often. But, it keeps me going back, every single day, cause there's a chance... just a chance... the IGDA is full of shit, cause there are several alternative app stores I've tried, and they offer me no reason to not use t
  • 0) You set your app's Amazon app store list price. It cannot be any higher than the lowest list price of the same app anywhere else.
    1) Amazon will pay you the greater of either 70% of the sale price or 20% of the list price.
    2) Amazon can sell your game at a discounted price (even free) anytime it wants.

    This is a double-edged sword. While the ideal scenario is that Amazon sells your app deeply discounted, or for free (thus getting you tons of downloads, and Amazon basically gifting you 20% of the list pric

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