IGDA Warns Game Developers About Amazon Appstore

The IGDA (International Game Developers Association) has warned Android game developers about Amazon’s Appstore, telling them to read Amazon’s terms carefully. They have been told to “educate themselves on the pros and cons of submitting content to Amazon”.

In their “important advisory“, the IGDA’s main concern is over the payment terms with Amazon. Amazon pays developers “the greater of 70% of purchase price or 20% of list price”. For reference, Amazon does not allow developers to set list prices in the way they can on other marketplaces. Like other Amazon-sold products, from TVs to toasters, the list price is set by Amazon.

What’s the Big Deal?

Amazon comes from such a different retail background than Google. Amazon’s terms proclaim that, put simply, developers have no choice over price and that the e-commerce giant reserves the right to alter prices at will.

From what I can tell, a developer can set a suggested list price for their application, but Amazon sets the final figure. Therefore, if a developer suggests their app should be $1 but Amazon puts it on sale for $10, the developer would receive $7. This is because the 70% of the retail price is more than 20% of the suggested price.

In the same way, if Amazon gives an app away for free, but the developer suggested a $5 list price, the developer would receive $1 since it’s more than 70% of nothing. It’s kind of hard to decode the exact terms, so suggest alternative decryption in the comments, should it be necessary.

[Editor’s Note: The way I read it, it’s probably to do with sales: if you download the free app of the day, and it’s normally listed at $1, the developer will receive 20 cents. But I am not a lawyer.]

Most application prices are in line with other market prices, but Amazon has final control.

What’s the Issue?

The IGDA pointed out a number of scenarios in which game developers will suffer when Amazon succeeds. Firstly, they point out that Amazon has the ability to discount catalogues of applications that could harm less popular developers. Whilst large developers could benefit from increased sales on a wide scale, the harder-to-find applications might not reap the same rewards.

The IGDA also suggests that by severely discounting applications (or making them free for a period) whilst they’re selling well, the developer’s potential revenue could be harmed. That statement not only refers to potential revenue from Amazon, but also from rival markets as consumers would naturally choose the free option over rivalling paid ones.

Another concern is over the influence that Amazon’s Appstore might have on other markets, forcing a compulsory new business model on game developers who choose to sell through other channels.

The IGDA's response to Amazon's clarification.

A Big Dilemma

Each developer is to their own, but there’s a big dilemma for every one to consider. Amazon provides a great platform for developers to market their applications and break into a new potential audience but it comes with the risks mentioned. You’ll have a play at some new customers, but you’re signing over your application’s future to another party.

Google’s marketplace is, for indie developers especially, probably the best bet for a sustainable, confident future. But the choice of app store isn’t as fixed on a phone powered by Android as it is on rival platforms, so Amazon looks great from a marketing perspective.

Each of the pros and cons is important for any developer to consider, but Amazon’s terms are evidentially sparking some controversy amongst developers. The website has offered some clarification to the controversy, however: they claim that an outdated developer agreement is the source of these reports.

In response, the IGDA maintains that Amazon’s programme can potentially hurt developers for its own gain in ways that offer little insurance to the growth of a developer, however big or small. As Android grows, so does the demand for apps — and I’m betting the game development community isn’t hoping for these terms to become their only option.