Matthew Roszak

In The Press Blog

Game makers: Amazon’s Android appstore terms are greedy

no comment is in hot water for the pricing strategy and terms for developers in its new app store for Android games. Basically, game makers fear that they will make a lot less money as Amazon battles Apple and other app store owners in a bloody price war.

In this battle, developers are worried they will be cannon fodder. The International Game Developers Association, the professional association for game developers, has sent Amazon an open letter accusing the company of adopting developer-unfriendly terms for its new Android app store. If Amazon doesn’t change its terms, developers will make less money on games and have less say in how their games are sold and merchandised, the group said.“The point here is to educate developers about the terms and to begin a discussion,” said Gordon Bellamy (pictured), executive director of the IGDA, in an interview. “This took a lot of thought to make this clear and it’s still the beginning of a discussion. We hope that Amazon continues to explore choices that will be good for the development community.”

Bellamy said the group raised its concerns with Amazon’s executives but there has been no change so far.

Prices will likely be lower on smartphones and tablets, and the IGDA’s members are used to that by now. But the terms that Amazon has used are particularly tough, including a clause where it will pay the developer either 70 percent of the purchase price or 20 percent of the list price. Given the steep discounting that Amazon is doing, that means there could be very little money for a developer.

Amazon started its app store a few weeks ago with 3,800 apps. To get attention, it offered a very big promotion, offering Rovio’s popular Angry Birds game for free. Rovio was likely able to dictate its terms to Amazon, since Angry Birds could help get Amazon off on the right foot as it takes on Apple, which has more than 50,000 games in the App Store.

In some ways, the IGDA is a little late. Apple is the company that set the standard for low prices paid for apps, with many games going for free and many selling for just 99 cents. Whatever Amazon is doing, it can argue that it is just trying to compete with Apple.

But the IGDA says that no other app store owner is asking for the same strict terms, like requiring that a developer give up the right to be able to set its price for a game and put that decision entirely in Amazon’s hands. Amazon is also requiring that developers permanently match the lowest price for a game anywhere else it is sold. If a developer discounts a game for a weekend on the iPhone, it then has to permanently set its price at that discounted figure on Amazon.

The IGDA worries that Amazon will start a downward spiral in mobile game prices, much as Amazon did with the launch of downloadable casual web games. Those games were once sold for $20 each, but now they sell for $7 or less.

Here’s the full text of the IGDA letter:

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