Developer group IGDA slams Amazon Appstore pricing terms

The new Amazon Appstore for Android is the target of an International Game Developers Association advisory that identifies "significant concerns" about the storefront's current distribution terms and warns the digital retail giant "has little incentive not to use a developer's content as a weapon with which to capture marketshare from competing app stores." In a lengthy blog post, the IGDA's board of directors takes issue with Amazon Appstore for Android's "unusual" terms, which grant the retailer the right to control game prices and to award developers the greater of 70 percent of the purchase price or 20 percent of the list price. 

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

Among the possible scenarios outlined by the IGDA: Steep, catalog-wide pricing promotions that benefit Amazon by capturing consumer goodwill while crippling developer revenues, as well as competitive pressures that force rival app stores to duplicate Amazon Appstore's terms. The IGDA adds it has communicated its concerns to, but the retailer has "thus far expressed zero willingness to adjust its distribution terms... 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. It would be foolish to assume that because Amazon's Appstore is small today, it will not become the Walmart of the Android ecosystem tomorrow."

Amazon Appstore for Android went live in late March with about 3,800 applications in all. Amazon promises a series of automated marketing features extending its signature product recommendation engine to mobile software merchandising, as well as a Bestsellers section to further improve consumer discovery. "We spent years building shopping features that help customers find the products that are relevant to them from amidst a massive selection, and we're excited to apply those capabilities to the apps market," Appstore Category Leader Aaron Rubenson told The New York Times. In addition, Amazon will test all apps before introducing them in the store, guaranteeing a positive user experience and protecting consumers from malware and other potentially harmful situations.

For more:
- read this IGDA blog entry

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