The International Games Developers Association (IGDA) has raised some significant concerns for the distribution terms provided by Amazon on their new Amazon Appstore service. Games developers are advised to educate themselves on the pros and cons of the store's terms and the implications it could have on the sales of their titles. Generally, Amazon are able to manipulate app prices and sales as a way to leverage their appstore over competing appstores, to the detriment of the app developer.
The five most significant issues listed by the IGDA are:
(from the IGDA)
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 such a promotion.
2) By requiring all developers to guarantee Amazon a minimum list price that matches the lowest price on any other market, Amazon has presented developers with a stark choice: abandon Amazon’s market or agree never to give another distributor an exclusive promotional window.
3) Other digital markets that compete with Amazon (both existing markets and markets yet-to-be-created) may feel compelled to duplicate Amazon’s terms, and perhaps even adopt more severe terms in an effort to compete effectively with Amazon. In essence, we’re looking at a slippery slope in which a developer’s “minimum list price” ceases to be a meaningful thing.
4) Amazon steeply discounts (or makes entirely free) a game that has a well-defined, well-connected niche audience. The members of that niche audience snap up the game during the promotional period, robbing the game’s developer of a significant percentage of its total potential revenue from its core audience.
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.
Local games developers have been embracing new digital distribution services such as the Amazon Appstore, with Firemint releasing their popular Flight Control game to the service as well as Intel's appstore service, Intel AppUp. Halfbrick Studios have also released Fruit Ninja on the Amazon appstore. Both locally developed titles have been listed as free downloads as part of the Amazon "free app a day" program.