IGDA about the Amazon Android Appstore: just say no.

by swombat • 15 years ago

137 64 15 years ago

_delirium3• 15 years ago

Sounds like Amazon is trying to extend to apps the weird pricing racket that's standard in the bookselling industry. A lot of books are cheaper via Amazon than via the publisher's or author's own site precisely because of these kinds of terms, which require you to sell to the bookseller at a steep discount over list price, and simultaneously prohibit you from selling below "list price" yourself, outside the bookseller channels.

jrockway2• 15 years ago

I don't think an agreement with Amazon is what prevents the publisher from selling at list price. It's the fact that Amazon (and every other bookseller) would simply refuse to buy the books from the publisher if they were being undercut.

jonknee4• 15 years ago

With billions of dollars on the line, I'd be shocked if it's not in writing.

neutronicus• 15 years ago

Kind of paints the Apple / Amazon spat in a new light.

cooldeal2• 15 years ago

What spat?

joelackner• 15 years ago

does anyone know how the free app-a-day promotion is being handled? does amazon pay the developer 20% of the price for each free download?

benjamind2• 15 years ago

By most accounts I have read they do indeed pay you 20% of the list price for free downloads. Though I have not yet experienced this for myself, as I have been very wary of the Amazon AppStore terms.

cubicle67• 15 years ago

point 9:

"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."

This seems to imply that if you offer your app in a free-app-a-day promotion, you're required to offer it for free permanently to Amazon, although there's no way that can be correct

[Edit: it seems I misunderstood the parent comment. I'm referring here to free-app-a-day promotions like this http://www.freeappaday.com/. I wan't aware Amazon offered something similar

I was saying it looked like if a developer promoted their app on a site like this, point 9 make it look like they'd be forced to offer it for free, forever, on the Amazon store]

benjamind2• 15 years ago

I do not think this applies to Amazons own listing of your apps. Therefore they can list your app for free, pay you 20% of your list price for downloads of the app and force you to not make 'free' promotions on other markets with point 9 as you described.

mattmcknight• 15 years ago

"And if you ever conduct even a temporary price promotion in another market, you must permanently lower your list price in Amazon's market." seems to not be entirely accurate with regards to the prior statement "cannot set their list price above the lowest list price available or previously available on any Similar Service".

If the _list_ price on the similar service doesn't change, but there is a temporary promotion on the similar service, this condition would seem to _not_ apply.

dspillett• 15 years ago

If the app being free for a day is their choice then yes, they will pay 20% of the minimum list price in that period (as 0.2 x List will be more than 0.7 x Free).

If you dare give your app away for a day or allow another marketplace to do so, and sell your app via Amazon now or at any time in the future, you must permanently reduce your minimum list price at Amazon to $0.00 meaning that from this point they could give your app away for free as often as they like and give you nothing (0.2x0.00 == 0.7x0.00 == 0.00).

Essentially this means you can't give an exclusive offer to anyone other than Amazon, including via your own site if I'm understanding correctly, without also giving Amazon the option of the same offer (meaning is isn't much of an exclusive) and not just now: they have the option of running the offer when-ever and how often they like now and at any time in the future.

Shorel• 15 years ago

Any Indie developer with experience on Steam sales to light up this issue?

Seems to me that the arguments of IGDA sound very close to the arguments of the RIAA and real numbers will show a very different outcome, specially for the smaller devs.

jim-greer• 15 years ago

I don't see how the numbers could show that this scenario is fair.

- Developer sets a minimum list price of $0.99 (fair)

- Amazon has an 80% off sale (fair)

- Developer later has an 80% sale on Android Market (fair)

- Amazon can now sell the app for 96% off, because the sale on Android Market resets the minimum list price (unfair)

The developer is punished for having a sale on a competing market by now allowing Amazon to sell the app for $0.04, forever.

yawn• 15 years ago

It is curious that there haven't been any prominent developer blog posts about how well an app has done on Amazon's store. Where are the developer comments?

shareme• 15 years ago

Just wait folks..remember most device users have do one extra step to get these apps..if we pressure Amazon enough these terms will change..

In my own case I am going with:

1. Android Market 2. SlideMe 3 GetJar

..when Amazon changes the terms as it should be pricing only at their market pricing at other markets should not bear on pricing at theirs..its a anti-trust potential violation via the collusion implications of anti-trust law..

epoxyhockey• 15 years ago

Users having to go through all of the extra steps just to install and enable the Amazon app is enough reason for not publishing via Amazon's app store.

Also, users have to enable Amazon's 1-click mobile purchasing. A 2nd huge hurdle.

jcl2• 15 years ago

That probably won't be true long-term. Amazon is perfectly capable of cutting deals with manufacturers/carriers to get their apps pre-installed; their MP3 app comes with many Android phones.

aristidb• 15 years ago

Amazon does however have an incentive to maximize revenue and there is a lower bound to what a developer gets (a percentage of the list price), even if Amazon promotes it for free, so Amazon loses money on that.

I think Amazon is better at optimizing pricing than most game developers are, so I expect this to improve revenue for both Amazon and the game developers. But only time will tell for sure. Panicking is not the right response.

_delirium3• 15 years ago

I can believe that if Amazon were sticking to terms for its own market, but Amazon is attempting to prohibit anyone who sells through its market from simultaneously trying other pricing strategies in other channels. That seems more like a classic attempt at using market power in one channel to coerce behavior in other channels, rather than competing on the product's actual strength (unlike Google or even Apple).

metageek2• 15 years ago

It's exactly like Apple's rule for in-app purchases.

jonknee4• 15 years ago

You can try other pricing strategies, it's just that you need to give Amazon the lowest list price. No different than Apple really, requiring your in-app content to match the lowest pricing available.

Amazon and [to a much greater extent] Wal-Mart play these games with physical goods too. It's just you never get to read the terms and big distributors don't complain publicly.

bmelton• 15 years ago

That's definitely true in the long term, but while I don't believe that Amazon is necessarily going to abuse the power they ask for just because they have it, heavily discounting apps at the developer's expense is a great way to get traction for a new app market that most people haven't heard of.

For many of the discounted apps, those that depend on the purchase revenue (vs. ad-based) and that might be fad, or temporarily popular, this could effectively kill them off in the name of helping Amazon.

kodisha• 15 years ago

All i see is that most of the top selling apps are already on Amazon Store :/

msy2• 15 years ago

Say hello to the new boss, same as the old boss.

Amazon, Apple et al are becoming new middle men of the digital marketplace. Want to sell content online? If you want mass market exposure we'll have 30-70% of the revenue from the sweat of your brow and you better thank us for the privilege.

I wonder how long until they band together and form a lobby group called the Digital Content Providers Association of America.

cooldeal2• 15 years ago

With Android atleast you can sell the app from your website or any market. With iPhone apps there is no chance of that at all. (Cydia doesn't really count).

GrandMasterBirt• 15 years ago

Yes but the problem is when markets hijack business models. Like what apple did with in-app sales.

samatman• 15 years ago

Why doesn't Cydia count? I've never understood the logic here. Since the Supreme Court has determined that jailbreaking and alternate markets are legal, what does it matter that Apple would prefer you didn't install it?

But then, I've spent probably 30 bucks and counting on the Cydia store.

swombat2• 15 years ago

And, like all middlemen, they very much deserve their cut.

What are you going to do with that pile of books in your cellar if there's no bookshop to sell them for you? Open your own single-book store?

If you build a store, you should certainly get a healthy cut of what you sell through your store.

Maascamp• 15 years ago

I certainly wouldn't generalize that to _ALL_ middle men. Have you heard about sub prime mortgages..?

msy2• 15 years ago

The problem isn't the existence of middle men, it's when oligopolies form that can bully producers and consumers alike and in the process stifle innovation and creativity.

gyardley• 15 years ago

Of course middlemen deserve a healthy cut.

The issue here isn't whether Amazon deserves a cut, it's whether their incentives are aligned with the developers who use their platform. Amazon's control over pricing allows it to make decisions beneficial to the platform as a whole but potentially harmful to the individual developer.

Incentives are never going to be perfectly aligned, but letting the developer control pricing would make them a lot more aligned than they are now.

Retric• 15 years ago

10% is a healthy cut 30% when they are not subsidizing the platform is a slap in the face. 30% and they get to restrict what you do with other platforms AND control your price structure is insane.

Under these terms you any developer that uses Amazon marketplace is stupid. They might make slightly more money in the sort term but you are giving up huge long term gains.

PS: I am seriously considering boycotting Amazon over this.

alvarosm• 15 years ago

The post in the IGDA blog: http://igdaboard.wordpress.com/2011/04/14/important-advisory...

tybris• 15 years ago

or... be an entrepreneur and take a chance...

allwein• 15 years ago

I'd need to read the Amazon agreement much more closely, but what's to stop developers from gaming this by taking all their apps released on Amazon's app store and making them special "Amazon Editions"?

Then the argument is there that the minimum list price on Google's store doesn't apply, because the Google Edition and the Amazon Edition are two different apps.

MatthewPhillips• 15 years ago

You can't loophole your way out of a merchant/producer relationship. They decide what qualifies; they'll slap down your loophole and kick you out.

androidjim• 15 years ago

Amazon requires that you offer all versions of your app for sale on Amazon. So they will be selling your Google Edition as well as your Amazon Edition.

fomojola• 15 years ago

Until Amazon fixes that, there is quite frankly no incentive to use their store for anything that isn't free. I had thought that cross-promotion for software that works with hardware Amazon sells would be win, but until Amazon fixes their pricing policies I've no interest at all in their store. 30% off the top is bad enough but at least you got to determine the price. 20% of list price on a 99-cent app? Really?

FAIL. Call me back when you get your mind right.

jcl2• 15 years ago

I'm surprised the IGDA didn't also call out Amazon's apparent requirement that a developer must allow Amazon to distribute all the software the developer is distributing through other channels. In other words, there's no way to try out Amazon's service with just one title -- it's all or nothing.

dpcan• 15 years ago

I was surprised they didn't mention this as well.

Plus, the Timing of Deliveries section.

gacba2• 15 years ago

Three words people: In App Purchases! If you have a free app, and then use In App Purchasing for your real revenue stream, you won't be affected by these Orwellian terms and Amazon's whims.

It's relatively new on Android, but a number of iOS apps are raking it in this way and giving away the app for free...

http://mashable.com/2011/03/29/android-in-app-live/

JoachimSchipper2• 15 years ago

Apple has already closed this loophole, and if this becomes widespread others will too.

gacba2• 15 years ago

Closed it how? Can you provide a link?

beeeph2• 15 years ago

How did they close it? This is how all my iOS apps generate revenue. They're all free with In-App Purchases. It works great.

Also, why would anyone consider this a "loophole"?

dazzla• 15 years ago

From my limited experience (a friend's and my own app in the Amazon store from the first week) the exposure is pretty negligible anyway. I imagine the requirement to enable side loading (not possible with AT&T), downloading another store app, enabling 1 click, etc is really hindering adoption. So I don't think developers need to loose any sleep over this right now.

foob2• 15 years ago

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 such a promotion.

There might be some chance of Amazon doing something like this, but it is important to point out that even in this case the developers of those 100 apps will on average be making more money. Amazon is trying to optimize prices to maximize their own profit and in doing so they also increase it for the developer. Lets look at an example...

Say that Amazon sells n copies of a game per day at the list price of $1. Then they make .3n dollars per day and the writer of the app makes .7n dollars. Now if they lower the price by 75% like the author suggests and sell m copies per day then the app writer makes .2m dollars and Amazon makes .05m dollars. Moneywise, this obviously only makes sense for Amazon to do if m > n6 because they would be losing money otherwise. If this condition is met then the app writer will make at least .2n6=1.2n that day and their profit increased by at least 71% if Amazon was smart about their decision.

As long as Amazon changes a price such that it increases their own gain then it also increases the gain of the developer. In the price range from .2/.7=.286 to 1.0 of the list price this is trivially true because your profits are directly proportional to theirs in that range. In that case you have a minimum increase in profit of 0% but will likely see something higher. In the range from 0.0 to 0.2 of the list price Amazon is losing money to pay you so I'm assuming that this isn't going to happen. In the range of .2 through .286 things get a little more complicated. Look at this plot (http://www.wolframalpha.com/input/?i=Plot%5B100*%28%28.3%2F%...) which shows the absolute minimum percent increase in profit that the developer sees compared to list price given that Amazon isn't losing money on the decision. If Amazon thinks that it's a good idea to sell your app for 78% off then you're probably about to start making a lot more money than you would otherwise.

I understand that at first glance .2 of list price sounds scary, but as I've shown above the developer also makes an increased profit whenever Amazon does. This doesn't totally negate the proposition that Amazon might take a loss on your app to help sales elsewhere but they could just as easily take a loss elsewhere to help sales of your app. On average you'll still be making more money. I've assumed throughout this that Amazon knows how to adjust prices to maximize their own profits but I have a feeling that they're pretty good at this. They have a treasure trove of data on people's shopping habits that I can't even begin to comprehend and they're just trying to apply what they've learned to an app store.

tl;dr: The pricing policy actually increases your profits compared to a .7/.3 split at list price as long as Amazon is acting in a way that increases their own profits. It sounds scary at first but it's actually pretty cool that you can have a company as experienced at this stuff as Amazon optimize the price of your app so that you make as much profit as possible.

foob2• 15 years ago

There is one serious problem with this reasoning though. A realistic scenario might be that somebody decides that they want to buy your app and then compares the price at a couple of different app stores and decides to buy it at Amazon because there's a 10% discount but would have otherwise bought it elsewhere. In this case Amazon would have gained profit from the discount while you would have lost it.

How this ultimately plays out for the developer is hard to predict because it depends on how the market develops. If the Amazon store becomes very successful and their audience shops there regardless of whether or not there is a discount then this effect will be small. The terms guarantee that users will only find discounts at Amazon and this will make them less likely to check other stores when they find an app at Amazon even if it's full price. If that's how customers behave then the optimization will stay more favorable for the developer.

ginsweater• 15 years ago

That doesn't match Amazon's behavior. If they thought they could optimize prices for the benefit of app developers, I would expect them to offer the option. "Is setting your price a headache? Let our team of specialists do it for you!" Over time, as devs saw the benefits accrue to those who opted-in, more and more would switch to Amazon's model.

The fact that they require price control, as a condition of doing business, tells me that Amazon expects this policy to hurt developers.

doron• 15 years ago

I understand the ire, but still... IGDA can pool resources, and are in perfect position to start their very own branded Android store where they can set the rules as they see fit.

No reason why a game specific store shouldn't exist. If the user goes the distance to install the Amazon store, chances are they will install another.

TillE• 15 years ago

It's not a bad idea. Google's choice of game categories in the Market is bizarre, to say the least. There are a few highly specific categories which don't particularly represent popular genres on any platform, and everything else gets dumped in "Arcade & Action".

It's a total misunderstanding of the market, and it does quite a poor job of selling games (at least from a customer's perspective), which is the thing you really want in an app store.

IGDA about the Amazon Android Appstore: just say no.

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