Game Developer Group Warns Against Amazon Appstore

The International Game Developers Association has posted a warning to the game development community about the Amazon Appstore's distribution terms, detailing several unfavorable situations possible under the rules and saying, "Amazon has little incentive not to use a developer's content as a weapon with which to capture marketshare from competing app stores." "Amazon does not need the terms it has established for itself in order to give away a free app every day. Nor does it need the powers it has granted itself to execute a wide variety of price promotions. Other digital games platforms, such as Xbox LIVE Arcade and Steam, manage to run effective promotions very frequently without employing these terms. Amazon may further argue that its success depends on the success of its development partners, and therefore, that it would never abuse the terms of its distribution agreement. Given that Amazon can (and currently does) function perfectly well without these terms in other markets, it is unclear why game developers should take a leap of faith on Amazon’s behalf. Such leaps are rarely rewarded once a retailer achieves dominance."

Comments

Competition

[pablo_max]

Here is the big difference with Android and Apple. Competition. There are other stores you can sell your crap in when you dont like the terms of one.

Re:Competition

[NoAkai]

True. But as a dev, you'd want to expose your product on as many markets as possible, and I fear that some devs may not be too careful about what license aggreements they accept, and bam, suddenly the entire gaming community is tied up in ridiculous licensing distputes. But I may just be a bit pessimistic, I dunno...

Re:Competition

[Anonymous Coward]

Crap being the operative word. How long before the mobile app market tanks?

Re:Competition

[Anonymous Coward]

Agreed. One of many reasons I want to switch from iPhone to Android.

Re:Competition

[Anonymous Coward]

30% or 20%. Somehow much better than Apple's terms.

Re:Competition

[clang_jangle]

^ This. It will tank, the growth can't go on forever. Then some systems will have a bewildering array of choices to download apps and the whole point of having centralized repositories will be lost. There'll be no functional difference from the poor windows users who are stuck downloading software from the wild and wooly web, praying that the code is really what it claims to be.

Re:Competition

[Anonymous Coward]

But as a dev, if you're putting apps into Apple's store, you have would be a total hypocrite to complain about another option that offer competition. The reality is the vast majority of these "apps" are minor time wasting diversions, or content wrapped into something to display it, e.g. books, comics, even simple webpages. So if they all disappear over night, it's no loss to humanity.

Re:Competition

[Anonymous Coward]

The word app is short for application, it was in common use before the rise of Apple and OSX. The usage on this site is distinct from those boorish, clueless hipsters, marketing drones and and media-types who enjoy yammering on about "apps".

Are you proposing yet another smug elitist campaign whereby programmers and other tech competents insist everyone on uses the non-abbreviated form at all times or would you prefer the term "GUI programs"?

Re:Competition

[clang_jangle]

Come to think of it, it's far worse than that. Most people won't even have the sense to worry about the code being what it claims to be, so the default state of a non-geek owned android device will be pwned.

Re:Competition

[BasilBrush]

But commercial app developers will feel the need to get their apps on as many top tier app stores as possible. Otherwise they are leaving money on the table for THEIR competitors. And so most will swallow these awful terms in the contract.

And Apple must be glad to have Amazon around. It makes their terms look very reasonable indeed.

Re:Competition

[Anonymous Coward]

http://http://cydia.saurik.com/

Re:Competition

[Anonymous Coward]

Hey man, don't rag on my mobile GUIP Store.

Re:Competition

[Anonymous Coward]

Not for all devices. Occassionally you need to root/jailbreak you phone for an alternative distribution source/Cydia.

Oh... Right, at the core iOS and Android AREN'T ANY DIFFERENT.

Re:Competition

[TheRaven64]

I'm pretty sure people have been using the word 'app' for a good decade or so. It's been in common usage for at least 20 years, so you're a bit late to complain about people using it...

Re:Competition

[PopeRatzo]

windows users who are stuck downloading software from the wild and wooly web

"Stuck"? Are you shitting me? Are Apple users "stuck" buying their apps from Apple? You're goddamn right they are.

praying that the code is really what it claims to be.

Have you never heard of a "Cyclic Redundancy Check"?

praying that the code is really what it claims to be.

Tell you what, if you want to see what that really means, shop for 20 random games from the Apple App Store after reading the description. Now tell me if all those games "are really what they claim to be". Every transaction in which a human engages is subject to fraud. There are people who get to adulthood and find out they were adopted. You think there is some transaction, some system of transactions, some online fucking appstore that's going to be immune from selling something that's "not what it claims to be"? We've already covered Apple here, so let's talk about Amazon. You think everything you can buy from Amazon is "what it claims to be" or that you can readily and easily get your money back without a fight if it's not? Try ordering a Hurricane Harp. They're harmonicas that are made in sweatshops in China. They suck. They "claim to be" great. Health rules forbid the return of a harmonica. You buy it, you find out the advert was bullshit, you're screwed.

Don't tell me about being "stuck" downloading software "from the wild and wooly web" if you think you're any less stuck.

Now go get me a beer before I smack you one.

Re:Competition

[WhirlwindMonk]

*looks at his Incredible on which he can put any app he wants, even if he hadn't rooted the phone* *looks at the phones from other companies that prevent you from doing that* Huh, you know, it's almost like you have a [i]choice[/i] about what company to get your phone from. A choice you can make based on whether you want third party apps without rooting, if you are so inclined. So, tell me, what company can I get an Apple brand phone from that allows me to install any app I want without jailbreaking? I assume there is one because "at the core, [they] AREN'T ANY DIFFERENT," right?

Re:Competition

[juasko]

All i heard during that era was program. Download this or that program.

Never did i hear App, but I know my self to have been using the word application.

Re:Competition

[Anonymous Coward]

Camomile sir, camomile...

Re:Competition

[ciderbrew]

Not late at all, been moaning about loads of stuff for more than 20years. :)

Re:Competition

[clang_jangle]

Have you never heard of a "Cyclic Redundancy Check"? ... Don't tell me about being "stuck" downloading software "from the wild and wooly web" if you think you're any less stuck ...Now go get me a beer before I smack you one.

Wow, I know your history of mediocre trolling but this is substandard even for you. Are you ill today?

Re:Competition

[juasko]

So why don't you? Feel that android is inakvadate....

Re:Competition

[Anonymous Coward]

Ever heard of Cydia? Dumbass.

Re:Competition

[Monchanger]

That's the whole point of the advisory- that it's not necessarily in a developer's interest to be sold in every outlet. Take scenario 5 from the letter which suggests a way Amazon can cause a lot of harm to a developer:

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.

Amazon could put Angry Birds on a 100% discount to entice tens of thousands of people to add its store to their devices. It costs Amazon nothing. It's gaining customers, not making a profit, but not actually losing money, because the developer isn't making money either. The only loser is the developer, who has fewer potential customers (excluding possible sales via sequels or microtransactions, where such sales can actually make sense).

If a developer doesn't know better, they'll follow the "common sense" you pointed out. IGDA understands common sense is terrible and it is trying to help people avoid using it to make business decisions.

Re:Competition

[PopeRatzo]

I know your history of mediocre trolling but this is substandard even for you.

"Mediocre"? You offend me.

My trolling has always been first-rate.

Re:Competition

[PopeRatzo]

Camomile sir, camomile...

Camomile my ass, I want to kill something.

Now I'm going to go listen to that "Friday" song. That always mellows me out. That, and the speedball I'm cooking up...

Re:Competition

[nosferatu1001]

Well it WOULD lose money, assuming the list price of Angry Birds was non-zero they still have to pay you 20% of that.

You'd stil have to be UTTERLY insane, or desperate, to sign up though.

Re:Competition

[BasilBrush]

Amazon could put Angry Birds on a 100% discount to entice tens of thousands of people to add its store to their devices. It costs Amazon nothing.

That's not quite true. Amazon has to pay the greater of 70% of the selling price (which here is zero) and 20% of the list price. If Rovio had listed it with Amazon as a 99c app, then Amazon owe Rovio 20c for every copy the give away.

If a developer doesn't know better, they'll follow the "common sense" you pointed out.

It's not a matter of "common sense", it's a matter of game theory. Individual developers will see it as in his best interests to list on as many top tier stores as possible. Because their competitors surely will. But the sum total is bad for the industry, and so bad for all developers. A single developer can't make a difference to this. It's analogous to the reason why employees often need unions. And here IGDA is pretty much advising in the same way a union would to protect the interests of the industry workforce.

Re:Competition

[Anonymous Coward]

Your GUIP store is infringing my trademark for a Mobile Goop Store.
I shall see you in court, sir.

Re:Competition

[clang_jangle]

If I hadn't already participated in this discussion I'd mod that "interesting". A rare peek behind the mask. :)

Re:Competition

[Anonymous Coward]

I'm pretty sure you're a retard.

Re:Competition

[Raenex]

Trolling is such a misused word. Behind the angry and hateful persona, his point is perfectly valid. The idea that you are "stuck" because you have choices... well, that's quite the Apple spin. Step out of the Reality Distortion Field for a while.

Re:Competition

[clang_jangle]

The only RDF in effect here is the one the one resulting from your the false dichotomy of iOS vs Android. I'm not a subscriber to either (I use RIM, but it's a compromise). Do try to know your subject matter. It helps to avoid wasting perfectly good electrons and vitriol. :)

Re:Competition

[FatLittleMonkey]

I can remember Lotus 123 being described as the IBM-PC's "Killer App" (the one which makes the product indispensable for business. One of the older graphics suites was the early Mac's killer app for designers. Email, later the browser, was the Internet's killer app.)

Re:Competition

[Raenex]

Given your message is a commonly spouted Apple position, my mistake was reasonable. Anyways, the larger point still stands. Choice = stuck is 1984 Newspeak.

Re:Competition

[Anonymous Coward]

Amazon did put Angry Birds on a 100% discount the very first day they had the Appstore available.

Re:Competition

[CheerfulMacFanboy]

Why is it always the Apple haters who pretend jailbreaking is illegal - when it suits their argument at the time?

Re:Competition

[Anonymous Coward]

"Has to pay the greater?" Or "Reserves the right to pay the greater, while simultaneously exercising the ability to set the price of your app against your will?"

Re:Competition

[Raenex]

I never said it was illegal. In fact, I never said anything about jailbreaking at all.

However, the fact that you have to "jailbreak" your phone, which will void your warranty according to Apple and leaves you at risk for firmware updates, is hardly being given a choice by Apple. You're fighting Apple every step of the way instead of just doing what should be possible as a default.

Re:Competition

[scot4875]

But you can also get the iOS source code and compile it yourself! They're the same thing, really! The fanboys say so!

--Jeremy

Re:Competition

[NickFortune]

It's not a matter of "common sense", it's a matter of game theory. Individual developers will see it as in his best interests to list on as many top tier stores as possible

Isn't that jumping the gun a little, though? Amazon has considerable marketing power, it true. But that doesn't mean they're going to emerge as a top tier app store any more than Microsoft's money and brand guarantees that Windows Phone 7 will emerge as market leader.

Generally the rule seems to be "first get your lock in, then abuse your users/developers/whatever" I can't help feeling Amazon are being a bit premature here.

Re:Competition

[clang_jangle]

Given your message is a commonly spouted Apple position, my mistake was reasonable.

Being eager to jump to conclusions is no excuse, the whole world isn't divided into iOS and Android fanbois.

Choice = stuck is 1984 Newspeak.

Again, you're wrong because you're falling for a false dichotomy. Software repositories exist which are just about as good a solution as anyone could want. See most any major Linux distro. So, repository != iOS App Store.

Re:Competition

[Raenex]

The point still stands. I don't want to be stuck to a single repository. Your basic complaint is that a marketplace of repositories is emerging, thus users being "stuck", which is 1984 Newspeak.

Re:Competition

[CheerfulMacFanboy]

You are false on all accounts. Thanks for trying though.

Re:Competition

[darkshadow88]

Granted, but the only time I recall ever hearing "app" was in the canned expression "killer app". Everything else was always an "application" or "program" to me.

Re:Competition

[Raenex]

Thanks for your empty response. Keep on sticking fingers in your ears and yelling "la la la, I can't hear you".

Re:Competition

[clang_jangle]

No. Apparently you just aren't capable of understanding the notion of centralized repositories, and how they are used by FOSS like apt, yum, portage, pkgsrc, urpmi, etc., etc, etc, etc, etc, and why they are beneficial, and how you lose the benefits when you lose transparency, and how trojans are already a significant problem on android due to users falsely believing that every app named "f00barfoan" is not necessarily the exact same code as some other app called "f00barfoan" and why that's important.

None of this should have to be spelled out. Turn in your geek card on the way out, please. And don't reply any more, unless you simply have to have the last (unread) word. You have no point, and I'm tired of wasting my time with you.

Re:Competition

[clang_jangle]

users falsely believing that every app named "f00barfoan" is the exact same code as some other app called "f00barfoan" and why it matters.

Fixed, sorry.

Re:Competition

[Raenex]

No. Apparently you just aren't capable of understanding the notion of centralized repositories

Amazon is a big player in the market and has a vested interest to make sure the software users get is legit. Also, the standard open source repositories have alternatives, especially when it comes to proprietary media, and pretty much any Linux distribution allows you to install from wherever you want. Even with Amazon's app store, there's still the standard Google one. Choice exists, both in Linux and Android, just the opposite of being stuck.

And don't reply any more, unless you simply have to have the last (unread) word. You have no point, and I'm tired of wasting my time with you.

Running away, are you?

Re:Competition

[PopeRatzo]

Apparently you just aren't capable of understanding the notion of centralized repositories, and how they are used by FOSS like apt, yum, portage, pkgsrc, urpmi, etc., etc, etc, etc, etc, and why they are beneficial

I think you understand why it's completely inappropriate to compare centralized FOSS repositories and the Apple App Store.

Besides the most obvious differences, there's always the fact that if I don't want to get my FOSS software from a centralized repository, I can get it elsewhere accepting any risk myself. That is not true for iOS. And the old song and dance about how there has to be complete control of any software that runs on a cellular network is not true today, and it never was true.

Re:Competition

[clang_jangle]

FFS, I wasn't talking about iOS. I was (obviously) talking about multiple android app stores springing up like mushrooms with little to no accountability, security, etc. Installing untrusted software is not something any sane admin allows. Users of most Linux distros tend to know enough about what they're doing to be qualified to decide whether or not to add a given repository. The average smart phone owner is likely to be happy abut free dancing bunnies and install a trojan to see them, which means you end up with a very large problem windows has had from the beginning, i.e. no transparency and no accountability from third party software.

Man, you people are dense!!!

Re:Competition

[clang_jangle]

BTW, in case you actually haven't figured it out yet: I do not endorse iOS, nor Apple's policies, nor do I recommend them or their products to anyone except total, devoted, non-geeks (who really are better off essentially leasing a device someone else admins for them, and thus are Apple's natural market). It's weird that because I say something unflattering about Android some people immediately start piling up the straw men -- like they have PTSD from Apple merely existing, and are on a perpetual witchhunt to "destroy the fanbois", meaning everyone who says anything they disagree with.

Really, WTF?

Re:Competition

[CheerfulMacFanboy]

You wouldn't be able to hear it.

Re:Competition

[spire3661]

I have a folder that I created in 1998 called 00_APPS. Guess what it contains....

Re:Competition

[juasko]

That not same as App or Apps or App Store... :P

Seriously though, as I know my self I've used the word "Application" but that does not mean that a few others may have privately used App.

The issue is that it wasn't generally used. Even I have inveted expressions that some of my friends now use frequently. Not in english though. But would you claim that is a word for general use? No. Especially as it a play with 2 other words, where one is just a common expression but not a real word.

Now should that be considered as a legitimated word? NO! It's not. Could still be trademarked if I wanted to. If words or expressions are trademarkable, why not this one too.

Just as Apple says, Windows is a general word too in that case. And in that case Lindows would been fully legible name for that distro.

Hold up a sec....

[Anonymous Coward]

"Amazon has little incentive not to use a developer's content as a weapon with which to capture market share from competing app stores."

I'm no Donald Trump but isn't that what business is? Battling competitors for market share? Sounds to me like that union is afraid of its impending irrelevance.

Re:Hold up a sec....

[Anonymous Coward]

Mod Up ^^ Sir, you are one of the few in these modern times, that actually get it. Thank you for that... People like you will help rescue our sinking country here in the USA...

Re:Hold up a sec....

[Anonymous Coward]

Of course we all get it. But the point here is that Amazon can use it as a weapon on game developers expense. Imagine if they suddenly start giving away tons of free games and just do whatever it takes to customers leave their old stores and start using Amazon's.. I'm all fine for Amazon trying to capture market share as much as possible, but not on developers expense like that.

Re:Hold up a sec....

[Anonymous Coward]

So are you saying that Amazon is allowed to give away developers games for free without explicit permission from said developers just to bag new app store customers?

That doesn't sound plausible. (Although not having waded through the Amazon Developer Licence Agreement myself I wouldn't know for sure)

Re:Hold up a sec....

[Anonymous Coward]

Instead of wading through the Dev License you could always RTFA. Amazon can charge whatever they want, but they have to pay the dev the greater of 20% of the list price or 70% of the purchase price. So if you list your game at $5 and Amazon gives it away for free, you get 20% of list or $1. If they sell it for $5, then you get 70% of purchase or $3.50. It's not wholly unreasonable, and nothing is forcing you to sell through them. The fact of the matter is you have to make compromises if you want to sell anything on Amazon. They have huge distribution, so they can force manufacturers to give them huge discounts, which is how they're so successful. Or did you think that Amazon payed full price for the surround sound system you bought from them at a 25% discount over everyone else, and they just give you the great deal out of the goodness of their heart.

Re:Hold up a sec....

[517714]

If you wish to sell through the Amazon App Store, you must agree. When they give it away, they pay you 20% of list. You set list, they set selling price. If they discount 72% (sell at 28% of list) you still get 20% and they get 8% which means they can afford to do that forever (28% margin for them), and you have no recourse.

Re:Hold up a sec....

[Anonymous Coward]

Here's an anecdote for you. I am an Android user - fortunately not on AT&T where you can't use the Amazon store due to the block on side-loading (although my wife has an AT&T Android phone). I have the Amazon app store. I open it every day, look at the free app and see if I want to install it. Most of the time it is some silly game. But, if it is something I want I get it. One I installed was the $4.99 version of SoundHound when it was the free app of the day. I don't search for any other apps there on the Amazon market. I have the Google market for that. I do buy apps too; I have Sundroid, Launcher Pro Plus, Swiftkey, and Beautiful Widgets - all of which are purchased apps. But, the only draw to the Amazon market is to look at the free app of the day.

If other folks are treating it like I do, the Amazon store will slowly fade into irrelevance. Again, just my personal anecdote.

Re:Hold up a sec....

[Anonymous Coward]

Or did you think that Amazon payed full price for the surround sound system you bought from them at a 25% discount

You cannot compare material and immaterial goods.

You give Amazon a license to duplicate your software. With the terms Amazon asks, they can saturate the market for your software at a pittance, effectively making it VERY hard to sell your software at a price that will turn a profit for you elsewhere. Amazon doesn't care about that. They had zero expenses developing the app.

A stereo vendor can easily restrict how many items Amazon sells by simply not providing more. Amazon also has to pay this hard price per unit they sell. With software Amazon can prey on the developer's hope/desperation to sell enough to recover expenses at a laughable price-point. It's simply impossible to demand something like this with objects that can't go lower than the cost of production.

To keep a reasonable guarantueed price with apps, you'd have to set an inflated asking price, which probably isn't possible as I'd expect Amazon to demand the lowest/equal price around. Even if it was possible it would cripple regular sales of you app.

Re:Hold up a sec....

[Ornedan]

To keep a reasonable guarantueed price with apps, you'd have to set an inflated asking price, which probably isn't possible as I'd expect Amazon to demand the lowest/equal price around. Even if it was possible it would cripple regular sales of you app.

If you'd RTFA, you would have noticed that Amazon demands the lowest/equal it's ever been sold for. And then you get paid 20% of that.

Re:Hold up a sec....

[aaaaaaargh!]

I'm no Donald Trump but isn't that what business is? Battling competitors for market share?

Ha! And I thought business was about offering an innovative product with features and a price that makes people buy it...silly me!

Re:Hold up a sec....

[Anonymous Coward]

You forgot an important point from the article. The list price is defined as the MINIMUM price you have EVER sold the app for in ANY app store. That means if you do a 1-day 99 cent promo in a store other than the Amazon store (even if it's doing a "buy it for $1 and we'll donate your $1 to the tsunami victims" fundraiser), your new list price in the amazon store is 99 cents, meaning your minimum payout is now 20 cents instead of $1.

The only thing I'm not clear on (perhaps I missed it in the article) is whether temporarily giving it away for free count as a list price of $0.00 and gives you a minimum payment of nothing.

Re:Hold up a sec....

[Anonymous Coward]

I guess that's why Microsoft Windows sells like hot cakes then?

Re:Hold up a sec....

[sglewis100]

Instead of wading through the Dev License you could always RTFA. Amazon can charge whatever they want, but they have to pay the dev the greater of 20% of the list price or 70% of the purchase price. So if you list your game at $5 and Amazon gives it away for free, you get 20% of list or $1. If they sell it for $5, then you get 70% of purchase or $3.50. It's not wholly unreasonable,

So if I have an app that sells for $10 on iOS, and $10 on Android Marketplace, and it becomes the BIGGEST THING OF THE YEAR (or month or minute, whatever), I'm making $7 from Apple and $7 from Google on every sale. But Amazon sees all the activity and says "well, can't get the iPhone people, but we'll show those Google folks, this is our free app for the month." Now I get $2 from Amazon, instead of $7. Yeah, sounds great.

and nothing is forcing you to sell through them.

Who said people were FORCING anybody to do anything? It was an article. It's almost like the people behind the article wanted to make sure game developers were aware of that potential situation.

PS, it's a $5 per copy difference. If you are selling 100,000 copies of a title... that's fairly MASSIVE a loss of revenue.

Re:Hold up a sec....

[Anonymous Coward]

That would only be a relevant view point if Amazon were producing content in the form of apps. They made an store, and want to set the terms on what the vendor (app developer) is making without the vendor getting any "trust" money. If I was a vendor only being paid when people bought my stuff I sure as hell wouldn't let the store owner have complete control over how much they sell my product for. Particularly if that store is just starting out in the business. I'd go to a different store.

Re:Hold up a sec....

[circusboy]

Which might explain Trump's three bankruptcies...

It's always interesting to watch a store, battling for marketshare, destroy the source of its products, who are battling for marketshare, all in the name of "good business"

Re:Hold up a sec....

[Rockoon]

Furthermore, the Amazon model pretty much destroys any possibility for a developer to promise actual support for his or her product. Support/infrastructure costs are not a percentage of revenue, but instead some factor of the installation base. When Amazon decides to give your application away, the percentage of your revenue going to your support/infrastructure instead of to your profit coffers goes way up.

To defend yourself, you simply cannot allow support/infrastructure costs to be more than 20% of your asking price (or else Amazon could put you out of business by giving your app away) yet that asking price may significantly deter business (Amazon may elect to sell your app at your 500% markup price, dooming your business to a niche mediocrity)

Consider applications that connect to a server to retrieve new content that costs the developer money to collect/produce (an electronic magazine, a mapping service, sports statistics, etc..) .. many of these cannot operate effectively under an Amazons-first policy, for Amazon's success may be their failure.

Re:Hold up a sec....

[MMORG]

The point isn't that Amazon will be battling competitors for marketshare. The point is that the terms of the Amazon store allow them to price *a developer's content* in a way that helps Amazon capture marketshare while simultaneously screwing the developer's revenue. The developer has to surrender any control over their own pricing. You just trust that Amazon will price your content in a way that ends up benefiting you, but the IGDA is pointing out that Amazon has little incentive to manipulate prices in a manner beneficial to the developer and every incentive to manipulate prices in a manner beneficial to Amazon, and the two aren't at all the same thing. Read the article.

Re:Hold up a sec....

[shutdown -p now]

Amazon Appstore has just got started. Right now, you have to jump through hoops of sideloading an .apk to even get it (and then, as you note, you can't even do it on many phones). What I suspect they really want to do is make a deal with some operators to preload Appstore on their phones.

Re:Hold up a sec....

[ConfusedVorlon]

the problem here is that the contract that amazon offers is anti-competitive with respect to the developer.

Amazon say to me (the developer) that if I offer anyone else a lower price, then I have to permanently lower my price on the amazon store.

So newStoreTwo comes to me and offers to feature me on the front page in return for a 10% discount. That sounds like a store is competing to sell my product.

Amazon cries 'no fair' and stops this kind of competition.

The next step is when Amazon turn round and say that they only want to pay me 60% commission while newStoreThree is offering me 90% commission.

In a competitive world, I might say to amazon - thats fine, but if you are defining a commission rate, I'm increasing my list price at your store so that my return is similar for both. That would be healthy completion. If Amazon really can reach new different customers, then that's fine. Again - amazon cries 'no fair' and stops this kind of competition.

I have seen this play out in the Palm OS world. Over a couple of years the main stores (Palmgear/Motricity Handango) moved from offering 80% commission to about 30% commission. Meanwhile the plucky competitor (Mobihand) was offering up to 90% commission. I'd have loved to give Mobihand better list price terms, but the contracts from all the others required that the list price was the same across the board.

Meanwhile, while paying abysmal royalty rates, Palmgear/Motricity and Handango ran a deals every week or so discounting everything in their stores by 20% in a simple bid to grab market share (with no benefit to developers).

Eventually I de-listed from Palmgear/Motricity and Handango, but I wish we had never got to the such an uncompetitive state.

That's the problem when you let stores get big and agree to dangerous terms on the basis that they are currently trustworthy.

Re:Hold up a sec....

[Anonymous Coward]

This should be obvious by just reading who was making the claim:

"The International Game Developers Association"

Recall the following on the nature of guilds and their modern incarnation by Smith:

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary."

Groups like these are impotent against the peaceful market of consumers and suppliers, but they still pester. It's only dangerous when they get a sympathetic ear or deep pocket of a politician. Otherwise, society goes about picking things it likes and price fixers and monopoly seekers get left in the dust.

Resistance is futile

[pmontra]

The problem is that somebody will be lured by Amazon brand, their shop will become big and drive prices down toward zero. Economics always win and this is probably a necessary consequence of the very nature of computer programs. I explain:

1. We know that software can be copied at almost no cost, just like digitalized music, books and movies.
2. We also know that digitalization made music prices plummet and that artists are looking for new business models (maybe they should learn from their grand-grandparents 100+ years ago, before recorded music).
3. That's going to happen to books and movies (majors are trying to save themselves with 3D and other stuff difficult to reproduce at home).
4. It is only natural that it happens to computer programs.

We should prepare for a world where our products will be exchanged for free or a price near to zero. So how are we going to pay our bills? The only answers for most of us is custom software development. Luckily this is what I did for the last 18 years so I'm in a good position. You're also in a good position for some time if you sell Photoshop or Excel, but they have already lowly priced competitors that are good for many people. Even Windows will suffer: people will progressively move from the desktop to the mobile and desktop OSes will share the same fate with mainframe OSes, still alive but interesting only for some professionals (and the day will come that even Apple will stop tying its phones to a desktop OS) .

Re:Resistance is futile

[Anonymous Coward]

That's going to happen to books and movies (majors are trying to save themselves with 3D and other stuff difficult to reproduce at home).

You can get books in 3D now?!

Re:Resistance is futile

[Coldfinger]

A single sheet of paper is two-dimensional. Once you stack a bunch of sheets on top of each other you add a third dimension, so yes :)

Re:Resistance is futile

[errandum]

I think there is more to it than that.

I believe that the main point is not bothering that the offline part of the content gets freely distributed. But have premium features that require on-line accounts that will serve you ads / cost money.

I believe that's the way, and it's just an evolution of that time where you got a demo software from some magazine and then had to pay for the full thing.

Re:Resistance is futile

[poetmatt]

Is this supposed to be a problem though? I don't really see it as one, honestly.

It's called: here is your market, you make money this way -> X

and then becomes: your market has changed, your old way of making money is now free, find a new way.

nothing really problematic, that's just a market shift.

Re:Resistance is futile

[Anonymous Coward]

We also know that digitalization made music prices plummet

huh? Come again?
I'm not sure about the rest of the world, but where I live prices have definitely not gone down. The only thing that seems to have happened is that record companies are taking an even larger cut of the profits, leaving the artists with less of the cake...

Re:Resistance is futile

[drinkypoo]

The problem is that somebody will be lured by Amazon brand, their shop will become big and drive prices down toward zero.

That's a problem? I thought it was called progress.

Re:Resistance is futile

[Anonymous Coward]

Wrong. The single sheet of paper can be thin as much as you want but it will ALWAYS be a 3D object.

Re:Resistance is futile

[xednieht]

"We should prepare for a world where our products will be exchanged for free" - Really??? how bout giving me your car now to get this model started.

Re:Resistance is futile

[TheVelvetFlamebait]

It's called: here is your market, you make money this way -> X

and then becomes: your market has changed, your old way of making money is now free, find a new way.

Specifically, the problem is the last step. It sounds so easy on paper, but nobody has actually come up with and implemented an adequate "new way". There's been lots of suggestions, but none of them have actually worked for any more than a small handful of artists, most of which use them as a gimmicks or experiments, before working under the copyright business model. The fact is that copyright is the only tried and true business model we've had for artworks in some centuries. At least, not since it drastically outperformed the travelling minstrel business model that a small number of people used before recording equipment.

I have no problem with replacing copyright, but I don't think we should jump the gun. We should wait until we have that last step solidly completed before we throw away the system in place.

Re:Resistance is futile

[Anonymous Coward]

What you're looking for is Basic Income Guarantee (BIG), we need to dump this non-function Keynesian model because soon the world won't actually need burger flippers (aside from how insulting the burger flipper statement is in it's normal form).

http://dandelionsalad.wordpress.com/2009/02/03/bailout-for-the-people-the-cook-plan-by-richard-c-cook-2/

It's not a short read but worth it. Also, if you wonder how to pay for stuff like this you really don't understand how much people in various contries typically "own". In the US we own all the gold in the ground (as the people) and the government is managing it poorly (it taxes one company about 6 million a year for 60 billion in gold, quite the discount).

We have enough to feed, cloth, and power the world right now, and it will only get better if we just quit cheering at people for acquiring ungodly amounts of resources and hoarding them.

Re:Resistance is futile

[poetmatt]

The only people who can't come up with new ways to make money are either a: dinosaurs or b: people who wish to go out of business.

Lots of people have already found successful alternatives, the free product simply makes your other offerings more valuable. This is not a mystery or difficult. these things have worked for hundreds of artists, but it still involves hard work. It's far easier to make money now than it used to be, just not for the labels themselves. Surprise? they need to get over the gatekeeper role and stop trying to kill off anything that tries to make them more successful.

Copyright is by far not the only tried and true business in any sense of the imagination. Have you ever heard of live concerts? That's not a copyrighted thing, and that makes a whole lot more than cd's (copyright) do and has for far longer than copyright ever existed in the first place.

Re:Resistance is futile

[TheVelvetFlamebait]

The only people who can't come up with new ways to make money are either a: dinosaurs or b: people who wish to go out of business.

That often holds in capitalism (if it didn't, then capitalism wouldn't work), but there are examples where this has failed. In fact, any time anyone sells anything that is actively not wanted by the population, then it becomes practically impossible to stay in the market, no matter how creative your brain is for finding new ways to sell your product. So, instantly, we can obtain counterexamples. For example, can you think of any circumstances under which you would buy a wall made from potato?

OK, I know that's trivial, but it does mean you need to refine the statement. Perhaps you meant new ways of making money, including changing businesses? Well, artists could change businesses as well, but that's not a good thing. A fundamental part of the source of the dilemma is that we actually want artists working as artists, so clearly "a new way of making money" should not include cutting and running.

Perhaps you want to refine yourself to businesses that sell things that have demand? Well, that does dry up the source of counterexamples. The most prominent one so far is copyright, but you clearly do not agree that it is a counterexample. So, at this point, I would request that you would present a rational argument for the truth of your statement. Otherwise, I will continue to believe it false.

Lots of people have already found successful alternatives, the free product simply makes your other offerings more valuable. This is not a mystery or difficult. these things have worked for hundreds of artists, but it still involves hard work.

Citation needed. And, what is your definition of success? Is it earning a living with making art? Or is distribution necessary? If distribution is necessary, how wide does the distribution need to be? I would argue that a very wide distribution is highly valuable, since art benefits from interaction and inspiration from as many sources as possible. In fact, without it, I would deem the system a failure. For example, musicians playing in different pubs every sunday night might pull a crowd and earn some living money, and the crowd may have fun too, but there's a fairly restrictive limit to the variety of new music that can be showcased at such an event. If our culture was reliant on local inspiration and local interactions, it would stagnate very quickly. Maybe it would not die completely, but it would fail to progress, to innovate, and to inspire. The system, which is supposed to promote culture, and give as many people access to that culture as possible, fails on both counts.

However, I would wager that you think that the internet would provide a distribution network wide enough to satisfy the most sceptical opponent. At least, if it doesn't reach the old grandmas without internet access, but who do have CD store access, then surely it's worth it, right? Well, I would say that artists cannot benefit from the wide distribution network of the internet without fame. There are already many, many artists producing works for free or donations, and posting them online. I know because I have seen for myself these free music publishing sites, like Jamendo. Now, how many of these artists have pulled themselves out of these free promotional sites, and actually made a name for themselves? I certainly haven't heard of any. I know, as someone who has serched through the Jamendo catelogue, that finding hidden gems was difficult and not worth the effort. I was then convinced thoroughly that self-promotion via posting music online doesn't work well. Try it yourself, and see if you can come up with a conclusion that is any different.

Your comment most resembles someone who believes that recording should complement live shows. However, I have found this method completely inadequate. For one, it is not clear whether the recorded product makes the live show more valuable, sinc

Re:Resistance is futile

[spire3661]

Total and complete logic fail. Your teachers should be ashamed of themselves.

do what PC makers do at Sam's Club

[wren337]

At best buy or sam's club you'll find a PC with a distinct model number - the manufacturer produces it just for that chain. Makes price matching more difficult and lets the chains show lower prices etc.

So you make an Amazon version of your game with a different name. Maybe "Game Lite" or something similar enough to the normal name to ensure your people can find you, but different enough that you can legitimately say it's not the same game. Maybe leave out some levels or change backgrounds. Now you can set whatever list price you want - this game has never been offered before.

Bonus - your core audience will buy this one to, so they have every version.

Re:do what PC makers do at Sam's Club

[Anonymous Coward]

aybe leave out some levels or change backgrounds. Now you can set whatever list price you want - this game has never been offered before.

Bonus - your core audience will buy this one to, so they have every version.

So, Pokemon, basically.

Re:do what PC makers do at Sam's Club

[$1uck]

My thoughts exactly.... that's what I get for just reading headlines before posting.

Re:do what PC makers do at Sam's Club

[Anonymous Coward]

Yeah, they already thought of that one. If you read the leaked Amazon appstore distribution agreement, one of the requirements is that you must allow Amazon to sell all software that you sell through other channels. So you would be obliged to provide both versions of your game to Amazon (14 days prior to release anywhere), and they would be able to sell both, with the baseline price set at the lowest you have ever sold the software anywhere.

There's probably some sort of crazy corporate structure you could set up to get around this -- e.g. having a main company that "licenses" different versions of the game to subsidiaries for exclusive distribution. But remember that Amazon is not obligated to carry your software. If they think that you are bending the rules to their disadvantage, they can just drop you from the service.

Not available outside the US

[thegarbz]

I wonder why developers bother with Amazon at all. Their app store is incredibly limited by their stupid policies. Angry Birds Rio was an exclusive release on the Amazon app store, and given away for free. .... But doesn't work outside the US. End result is that despite the game was being given away, and the previous version was available add supported, Android forums were full of questions relating to piracy of the game.

It's fucking 2011. Angry Birds Rio is not some kind military weapon, it doesn't use encryption that will breach US export laws. Amazon why will you send me practically anything but not offer me a digital download?

On top of that you know my address from my account, why did you let me waste 20min downloading your stupid appstore app, then force me to setup a one click account for something you're giving away for free before giving me an error saying the store is available in the US only?

Amazon I extend my middle finger to you, and to those developers who will use Amazon I look forward to finding your apps on bit-torrent if you don't offer a download or an alternative app store.

Re:Not available outside the US

[elrous0]

It's the same with movies. Weird international distribution agreements give us fun stuff like region coding, DRM restrictions based on ISP location, etc.

It may be the 21st century, but international media distribution is still stuck firmly in the 20th. Most licensing agreements are still based on conventions from the days when all media was sold via a physical copy in a brick-and-mortar local store.

Re:Not available outside the US

[protektor]

Actually Angry Bird's Rio was not exclusive to Amazon. You can get it on the Android Market, you can get it from iTunes. So it clearly isn't an exclusive in any possible sense of the word.

Amazon AppStore
http://www.amazon.com/gp/product/B004SBS8LA/ref=bt_atcg_mine_img_0?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-2&pf_rd_r=0PHR5R090MXJ5QMY29TC&pf_rd_t=101&pf_rd_p=1293151222&pf_rd_i=2478844011
Android Market
https://market.android.com/details?id=com.rovio.angrybirdsrio&feature=search_result
iTunes
http://itunes.apple.com/us/app/angry-birds-rio/id420635506?mt=8

Clearly you can see it is available in two places for Android and also for the iPhone. So clearly not an exclusive to anyone.

Re:Not available outside the US

[Anonymous Coward]

While agreeing with parent, what I find surprising is the dearth of complaints about the post-"purchase" user experience.

Why the *foxtrot* do I have to be actively signed in and connected to play ABRio? I can use any other Android Market app without checking in with Google for per-use permission. And try uninstalling the Amazon Market Fuckapp? Apps installed with it are disabled.

I lmao'd when I saw the Amazon how-to-install - "It's Amazon. Trust us.", or something very like that.

Free? Ha. Ha. Reports of user privacy violations via Amazon Appstore apps in three.... two...

Re:Not available outside the US

[getNewNickName]

Amazon wants to trumpet download numbers for their appstore app for some press release, so they let foreign users download the app whether or not they can actually access any content.

Re:Not available outside the US

[Anonymous Coward]

Clearly there's no need to keep repeating yourself clearly.

Was it available on Android Market at the same time as the Amazon release, or some time after? It's possible Amazon had a limited time exclusivity deal. Clearly.

Re:Not available outside the US

[Anonymous Coward]

It is the birds themselves. They fall under ITAR due to their ballistic characteristics.

Re:Not available outside the US

[Anonymous Coward]

I wonder why developers bother with Amazon at all. Their app store is incredibly limited by their stupid policies.

LOL

Re:Not available outside the US

[Anonymous Coward]

Clearly.

Re:Not available outside the US

[orgelspieler]

Vizzini, is that you?

Re:Not available outside the US

[thegarbz]

Actually Angry Bird's Rio was not exclusive to Amazon.

It isn't NOW. It was announced exclusive to Amazon a month before its release. Rovio came out and said 5 days AFTER the Amazon release that they do intend to release an ad supported version on the Android market. But you know what? The damage is done. Normally pirated apps are not overly prevalent for the Android platform and when you do find some the torrents may have 5 or 6 seeds, or be bunched up in a "3000 greatest apps" torrent. Not this time though. Angry Birds Rio torrents had about 60 seeds the day after its release. Not bad for an app that is free.

Not to mention I fired off a very nastily written email to Rovio exclaiming my disgust. Personally I have yet to bother going to the Android store and getting the add supported version. I say fuck it, they left a bad taste in my mouth and wasted my afternoon, why should they get any money from me?

Re:Not available outside the US

[Zebedeu]

That's ok, but at least warn the user when the app first starts that he won't be able to use it for anything.

But no, they chose to do that only after you've logged it, configured and activated their shitty one-click service (which can't be done from the app, so you have to go to your browser), and finally attempt to use the damn market.

I'm all for competition in the Android app market, but Amazon's attempt just left me with a bad taste since the very inception. I hope they're able to pick up their game, but I don't hold much hope.

As a developer...

[$1uck]

My answer to this would be simple... any game going for sale in Amazon's marketplace would be "unique." Some small slight change or tweak making the game different from any other game sold in any other marketplace. That way I'd be free to price both games however I wish.

Not every device has every store

[tepples]

There are other stores you can sell your crap in when you dont like the terms of one.

But no store reaches everyone. People using AT&T, soon to be the only nationwide U.S. GSM carrier, have only Android Market because all other stores require the user to turn on the "Unknown sources" checkbox that AT&T has removed from its branded phones. The very few who brought their own unlocked phone, then they still paid for a free phone that they'll never use because AT&T gives no discount on SIM-only service, unlike a carrier that it's acquiring. People using an Archos device or other device based on AOSP Android (as opposed to OHA Android) have only AppsLib and Amazon Appstore unless they pirate the Android Market application.

What premium features would enhance...

[tepples]

I believe that the main point is not bothering that the offline part of the content gets freely distributed. But have premium features that require on-line accounts that will serve you ads / cost money.

I don't necessarily think every video game genre is amenable to being made MMO. Let's try an exercise: think of what "premium features" would enhance a Wii game like New Super Mario Bros. Wii or Super Mario Galaxy 2 or Super Smash Bros. Brawl. Are there any? And if by "premium features" you mean everything past the first level, you get crap like the continuously online DRM of Assassin's Creed 2, which can't be played on the bus (no bus I've ever been on has had Wi-Fi) or even at the bus stop (mall Wi-Fi is locked, and the WEP or WPA key is strictly for employees only). This resulted in angry customers not buying the publisher's next product.

Re:What premium features would enhance...

[Anonymous Coward]

Not to defend the model in any way, every bus (motor coach) that shuttled MusikFest attendees between central Bethlehem (PA) and the parking lots last August was equipped with WiFi, so they certainly exist. I'm sure they just face the same resistance as free municipal WiFi systems have faced. Would be one way to lure more commuters to public transit, perhaps.

Re:What premium features would enhance...

[nosferatu1001]

Half the buses in our town have wifi....

It has made the cost of individual songs drop

[tepples]

where I live prices have definitely not gone down.

It has made the cost of individual songs drop. How much did a CD single cost before iTunes Store started selling downloads of single songs for a buck each?

Re:It has made the cost of individual songs drop

[protektor]

Well about the same exact price. I recall getting 45's for about $2 so that is 2 songs for $2, you know the A side and B side if your not old enough to remember. I also recall getting CD singles for about $3-$5 and those having 4-5 songs/versions. So again about $0.99 or less per song. I might also mention that these were singles of the top songs off the artist's latest album, so cherry picking has gone on for quite awhile. So what exactly was your point? Seems what your complaining about has gone on for..decades. At least going back to the 70's in my own personal experience.

The only people being screwed on music pricing is the artists. If you remember the music industry refused to deal with Apple because they weren't getting a good enough deal given the contracts at the time with artists. The contracts changed and suddenly Apple was good enough. It was because the studios got a bigger slice of the pie from the artists so they could afford to keep their mansions, hookers, and blow or whatever they blow their vast amounts on. Movie industry is exactly the same. Online TV and movies couldn't happen, well they modified contracts and suddenly it was all good to go. Neither had anything to do with online being bad, and everything to do with who got what slice of the pie. Remember if you want an audit of your royalties you have to use their accounting firms (both movie & music) because the accounting procedures are so unique only a few firms understand it. Which is another way of saying only a few firms won't tell you how your getting screwed and all the money/expenses the studios are misreporting and screwing you out of money.

Re:It has made the cost of individual songs drop

[dstyle5]

Peter Jackson and his battles with New Line for his full share of the profits is one of the few instances that I can recall where someone fought the big studios "accounting" system and won. Although the terms of the settlement weren't disclosed it was nice to see a creator get their fair share of the profits.

http://en.wikinews.org/wiki/Peter_Jackson_banned_from_working_with_New_Line
http://www.mtv.com/news/articles/1576672/peter-jackson-new-line-reach-hobbit-deal.jhtml

Re:It has made the cost of individual songs drop

[Colonel Korn]

where I live prices have definitely not gone down.

It has made the cost of individual songs drop. How much did a CD single cost before iTunes Store started selling downloads of single songs for a buck each?

$9.99 at Fry's in the 90s for something brand new and from a AAA band, like Nirvana, Smashing Pumpkins, etc. Now new releases are generally a bit more, but when we adjust for inflation the price seems shockingly flat.

Re:It has made the cost of individual songs drop

[orgelspieler]

But due to inflation, that $0.99 was only worth $0.17 back in 1970. So prices have actually dropped by about 83% by your calculations. Of course there's more people buying music, and there's more music being made, so the pie is getting bigger.

Re:It has made the cost of individual songs drop

[CheerfulMacFanboy]

Well about the same exact price. I recall getting 45's for about $2 so that is 2 songs for $2,

One word: Inflation.

Can no longer amortize cost of the first copy

[tepples]

The traditional business model for selling video games to the public amortizes the (possibly multi-million-USD) cost of making the first copy over the price of all sold copies. If the price of each copy is driven toward zero, how do you recommend recovering the cost of making the first copy?

Re:Can no longer amortize cost of the first copy

[protektor]

The amount required to recover on mobile games is exceedingly small which is why so many garage developers are able to get in on the game. It is also why so many of the big development houses are in the game because costs are small and profits are a much higher percentage. So even at $0.10 a copy it doesn't take long to recover the development costs. If you doubt that you might want to look at the amazingly large volume per month that apps are doing that are in the top 300 in the iTunes store. I last heard they were doing about 100,000 a month with top apps doing far more than that.

Re:Can no longer amortize cost of the first copy

[Anonymous Coward]

The cost to amortize that first copy for mobile games is not always small.

Look at the big names on the app store making tons of money. Most, if not all of those apps were done by teams of people over a fairly long period of time. True, it was done on a smaller budget and timescale then Gears of War or Halo or some other console AAA game, but that doesn't mean these mobile games are knocked out by a 1 or 2 person shop over the course of a weekend.

For example, I've just finished polishing up my latest game for the iTunes App Store. This was a (mostly) 2 person effort. What was involved in that effort:
- Around 6 months of 4-5/hr per day development (coding)
- Around 4 months of about the same hours per day of art and level design (3D, 2D, etc.)
- Around 1 month of beta testers, additional polish coding, level cleanup, etc.

That's just for us 2 primary creators.

Now we add in:
- Purchased music and sound effects (including time for researching said audio components.)
- Game trailers and other marketing materials (this stuff doesn't just "happen".. it takes many hours to make a good video and other material)
- Additional artwork commissioned for story elements, cutscenes, model textures, etc.
- Voiceover work for in-game audio/cutscenes (those people like to eat on occasion, too!)

And of course, let's not forget the tools
- 3D game engine (~$3,000)
- 2D graphics (~1000)
- 3D modeler (Free! - Blender baby!)
- Other 3D Modeler because the rest of the team doesn't use Blender (~1,500)
- Test devices to supplement your own iPhone (iPod, iPad2)
- Video capture devices (so that you can do a proper hands-on video for marketing.)
(This, of course, also doesn't include all the other little tools used like SoundBooth for audio editing, or the Mac you needed to get to be able to do faster builds because you're old one was too damn slow, or the many other little pieces of software you buy and use for those special cases.)

Altogether, our little "2 man" game is probably came close to $50-75,000 to develop (and that's a rough estimate for "cheap" labor.)

Do I think we have a great product? Yes! Am I guaranteed that it's going to be a huge hit and I'll reap back all that money? No! Such is life and we accept that.

But the only reason I can accept that, and put in so much energy and effort is because I believe that there is a market for my game. It's high quality and definitely can stand should-to-shoulder with the big boys with graphics, controls, gameplay and otherwise, and based on past experience we feel that will pay off for our rather large "spec" investment.

You know what I think when someone says, "Hey, your distribution cost is free! Why are you charging me for this game? (or charging too much, which is basically any price above whatever that person feels like paying.)" I think that person doesn't really get how software works, or any creative process.

Whether it's books, music, computer games, research -whatever- someone has to pay for it to be paid. Maybe it's a publisher paying the author up-front. Or (in many cases) it's the author who's "paying" up-front with his time and energy.

You the consumer are just paying the author for the time that that person put into making that product when you actually buy that finished product. The distribution costs, or lack thereof, are irrelevant. The fact that it's a "sunk cost" to the author is irrelevant to you as well. That author's business model isn't "develop on demand and only when someone pays for it." The author's business model is "develop up-front, and hope that someone will have demand and pay for it when it's a finished product."

Finally, let's look at the parent's comment:
"So even at $0.10 a copy it doesn't take long to recover the development costs."

No, you're wrong. Dead, stupid wrong.
There are a lot of people to pay in that chain. Also, the author might want to eat beyond the ship day and pay off some of his or her or their d

Re:Can no longer amortize cost of the first copy

[geminidomino]

If the price of each copy is driven toward zero, how do you recommend recovering the cost of making the first copy?

Worry more about making good games than spending 80% of the development budget on hours of photorealistic cutscenes voiced by A- and B-list talent?

Re:Can no longer amortize cost of the first copy

[tepples]

But if the price is driven toward zero, then how will even a game as simple as Bejeweled get made? Someone has to pay for the incorporation papers, someone has to pay for the secure office, and someone has to pay for advertising the game even if only through AdWords.

Re:Can no longer amortize cost of the first copy

[Anonymous Coward]

This race to the bottom forces the garage developer out of business. Consider:

Gary Garage develops a unique, innovative game, but due to his limited resource is unable to spend much on marketing, including in-game graphics & SFX. No matter, thinks Gary, I'll just undercut the big guys - people will be attracted by the lower price. The money I make on this game will go towards hiring an artist for version 2.

Billy Bigguy develops a knock-off of an existing game. He spends little on game play, but is able to spend a good deal on marketing & other assets, meaning he can sell his game for a much higher price - people are attracted by the flashy effects.

Now drop the highest price to 10 cents.

What can Gary hope to recoup for his game? A few measly cents? Hardly enough to feed himself, much less take on an artist. Due to the MUCH higher volume afforded by Billy's marketing budget, Billy can recoup his costs in no time - Gary, however, will eventually grow disillusioned and stop putting out games.

And if you think marketing is not a big piece of the top app's success, you have another think coming.

Re:Can no longer amortize cost of the first copy

[geminidomino]

"Driven toward zero" is different from "driven TO zero." It's fancy speak way of saying "made less."

Amazon wants to maximize profits too

[brainzach]

When Amazon lowers its prices of apps, it lowers the amount of money they can make off selling the app. If consumers were willing to pay for it, Amazon would charge $10 for a $1 dollar apps so they can collect 10x the amount of money.

Why would Amazon want to lower the price of a $1 app to 20 cents when 100% of the revenue goes to the developer?

Amazon believes that it is better at pricing the apps than the average developer which is why it has these policies. When Amazon lowers the price of apps for promotions, they expect that the increase sales would bring in more revenue which benefits themselves and the developers.

Re:Amazon wants to maximize profits too

[BitZtream]

Because after a period of time, after they've driven the other markets out of business ... they can raise the price to whatever they want.

They'll use their size and bank account to effectively give away things in order to make other businesses unprofitable, its a rather common tactic.

Re:Amazon wants to maximize profits too

[sglewis100]

Why would Amazon want to lower the price of a $1 app to 20 cents when 100% of the revenue goes to the developer?

First of all, you illustrate the problem. You just gave the developer 20 cents, when he priced the app hoping for 70 cents. On Android Marketplace, he would get 70 cents. On App Store he would get 70 cents.

Second of all, why? I don't know... maybe SOLELY to undercut Google, since it's THEIR app store, and they are trying to establish marketshare, and combat the (temporary) problem of how hard it is to install the app on most phones, when long term they hope to convince carriers to add their store from day 1, built into the phone, maybe even offering them 5% of sales as an incentive to do so.

Does no one remember how Amazon starting out with Kindle by insisting on $9.99 for a price point for new releases, even if they sold them at a slight loss? They did that to establish THEIR store as the predominate way to get eBooks.

Re:Amazon wants to maximize profits too

[brainzach]

Amazon is trying to gain market share, but their main goal is to maximize profits. They just need to have a few loss leaders to bring people into their store, while the majority of the apps are priced the same as Google's.

When Amazon does place an app on sale, they have an incentive to advertise the promotion to attract customers to their stores. From a developers perspective, you are just paying for advertising and the increase sales can easily make up for the lower prices. It is not all that bad.

If Amazon has policies that punish developers, they will miss out on all the best apps, which hurts profits. They have no incentive to do anything stupid like place every app at 75% off.

Basic business understanding failure

[protektor]

This has to be one of the most stupid things I have ever heard from a industry group.

"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."

I think they have forgotten that some people will never ever buy a product until it drops in price to a specific level. It doesn't matter what developers would like to happen. This is basic business 101. Businesses want to squeeze as much money as the possibly can out of customers. Customers want to pay as a little as possible for a service/product. So each of them have to decide on a price they can both agree on. The sale will bring you in more sales that you never would have gotten until you lowered the price as shown by the increase in sales. Not everyone who buys at the discounted price would ever have bought at the higher price. This is the same type of thinking that industry groups use to say every pirated copy of software is a lost sale when that is simply not true. I would also think that when an app goes on sale that people snatch up that is good that it increases the sales of your other apps. We see this exact thing happen for example when Baen sci-fi publisher gives away an author's book, the author's other books see significantly increased sales. Not to mention if the app is good the developer also gets just as much good will as Amazon probably more since the app is in front of the buy far more than the Amazon store.

"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."

The same thing happens on iTunes. A game gets set to free and people snap it up. All that has to happen is a developer doesn't give away the game and this never happens. I don't see the problem here at all. I should also mention that I have noticed huge numbers of apps that go on sale at a discount when first released then a few weeks later the price goes up. So I'm not sure I even see their point here at all when it seems this is an industry standard.

The other thing is that this seems to smack of telling developers, your too stupid to read the contracts you sign so let me explain it to you in simple terms so your little brain understands the big legal words here. I personally would find it insulting if an industry group ever sent me a letter like this, implying that I don't know the contracts I am signing. If I don't understand a contract I need to get a lawyer, which is always a good idea anyway. If I still sign a contract and get screwed, well then perhaps I deserve it since I am terrible at business, can't read and understand a contract or contact a lawyer, and should have just gone to work for someone else.

Looking right now at the top 25 paid game apps on iTunes the most expensive to develop would likely be: Asphalt 6 (although this is an upgrade), iStunt 2, Call of Duty: Zombies (again an upgrade/mod), Lego Harry Potter (a port and mod), Tiger Woods PGA Tour 12 (port and upgrade). Every single other game is a time waster with a game time of 1-4 minutes. World of Goo might be an exception, but it has been ported to/from several other platforms. In fact 10 of the 25 top titles are actually ports from web, console or computer games, 4 are variations of existing apps (mods), and at least 15 of them, that I know of, are available on multiple phone platforms.

I would also comment that there are also several other android market places as well. handmark.com, andspot.com, mobileapps.com, slideme.org, andappstore.com,

Re:Basic business understanding failure

[circusboy]

But at least at iTunes, each developer is the one mucking with the price, for their own benefit/loss/risk. The amazon method is to muck with the price of the product whether or not the developer wants them too, primarily for amazon's benefit/loss/risk.

Re:Basic business understanding failure

[MMORG]

All that has to happen is a developer doesn't give away the game and this never happens. I don't see the problem here at all. I should also mention that I have noticed huge numbers of apps that go on sale at a discount when first released then a few weeks later the price goes up. So I'm not sure I even see their point here at all when it seems this is an industry standard.

I think you didn't read the article carefully enough. The point is that that the developer surrenders essentially all control over their own pricing when they put something in the Amazon store. Amazon can just unilaterally tell you, "Oh, by the way, we're giving away your app this month. Don't like it? Tough." Now, yes, Amazon still has to give you a little bit of money in that case, but the definition of "a little bit" is pretty darn small: 20% of the list price, where the list price *must* be the lowest price you've ever sold your content at, ever, anywhere.

The point isn't that Amazon might engage in volume-based pricing strategies. Yes, times are changing and old retailing strategies don't always work. The point is that when you put your app in the Amazon store you surrender any ability to make your own decisions about your pricing strategy. Instead you hand your pricing strategy to another party who has very different goals than you do and will likely choose a pricing strategy that will optimize for their goals, not for your goals. If you're ok with that, then fine. But be aware of what's going to happen.

Re:Basic business understanding failure

[shutdown -p now]

The beauty of Android is that both users and developers have a choice. If you want to control prices yourself, publish to Market. If you want to give Amazon the reigns, publish to Appstore. If it turns out that Appstore actually gives more money to their developers because they are better at pricing things to maximize sales, then more developers will head their way. Free market will decide which model is best (though, most likely, both will remain, since a single model may not be the best for everyone).

Easy solution

[thePowerOfGrayskull]

Given that Amazon can (and currently does) function perfectly well without these terms in other markets, it is unclear why game developers should take a leap of faith on Amazon’s behalf. Such leaps are rarely rewarded once a retailer achieves dominance."

So... uh, don't? It only succeeds if enough developers jump on board; and if they do, then clearly it's not that much of a leap of faith for them.

And if Amazon does turn around and abuse this... we can walk away from the table. If, that is, our principles are worth more than the paycheck.

Re:Easy solution

[Anonymous Coward]

Given that Amazon can (and currently does) function perfectly well without these terms in other markets, it is unclear why game developers should take a leap of faith on Amazon’s behalf. Such leaps are rarely rewarded once a retailer achieves dominance."

So... uh, don't?

And... uh, that's what IGDA seems to be recommending.

Ya, welcome to real life

[Sycraft-fu]

Competition abounds and that is generally good for people. This is the same thing game makers on the PC have to deal with. Ever look at Impulse or Steam or Direct2Drive? They have sales all the time. They are fighting with each other and with retail stores to win over more market. Games get deeply discounted and it isn't as though the distributor is taking all the hit on that, the developer sees less per copy too.

However when you look in to it, you find it has been a real boon to small developers. When a sale happens they often see their biggest day in revenues, despite the lower per-copy amount. Reason is that tons of people buy it, not only because it is a deal but because they get the promotion. The download client and website prominently features the game(s) on sale, people publish the list of what is on sale on forums all over the net. Your game that was unknown can suddenly become very popular because of a sale, and you get a bunch of money and recognition.

So really it seems like the IGDA is saying "You shouldn't support the Amazon store so that Rovio can keep kicking your ass. We want a situation where only a few popular developers ever make a lot of money. We don't want Aamzon promoting your little app to people and getting you a bunch of recognition."

I mean big people like Rovio are really the only ones this would be likely to be negative for. Yes, if you game sells tons to everyone, then maybe a sale does nothing but eat at your profits. However if you are smaller, if you are something not so many people have heard of, then a sale can not only bring you more immediate profits through big volume, but it can help bring future success by making your name known.

Re:Ya, welcome to real life

[Anonymous Coward]

Read the entire letter. They addressed this issue exactly. They acknowledge that often steep discounts can and often are good for the developer, but sometimes they are not and the developer should have some degree of control over if and when a discount occurs.

Re:Ya, welcome to real life

[Anonymous Coward]

Have you actually read through Amazon's terms? I'm a small indie developer and won't touch that trap with a ten-foot pole. It's plain horrifying. For example, their terms would allow Amazon to sell your game at a deep discount so that you only get 20% of the list price, while PROHIBITING you from offering it at a discount on another service such as Steam. This will have a negative impact on anybody who is trying to sell their game through multiple services to maximize the potential audience.

For example, take this scenario:
1. You offer your game at $5 on every service you can find (most will give you $2-$3 per copy sold)
2. Amazon decides to sell it at $1.40, paying you $1 per copy as allowed by the terms.
3. Sales on Amazon go up, but your income from everywhere else plummets.
4. You decide to temporarily offer the game at $1.40 on other services as well (profit $0.70 per copy)
5. Amazon's terms now allow it to sell the game in perpetuity at $0.40 (profit $0.28 per copy)

This will only be profitable to you, the game developer, if your game is an absolute mega-hit (like, say, Minecraft). Smaller, niche developers cannot survive with such a low per-copy profit.

Inflation; unbundling

[tepples]

I recall getting 45's for about $2 so that is 2 songs for $2

Expressed in dollars, yes. But how much expressed in loaves of bread or gallons of gasoline? The U.S. dollar is worth less now than in the days when vinyl dominated.

I also recall getting CD singles for about $3-$5 and those having 4-5 songs/versions.

One song you want and 3-4 filler you may not have wanted. Paid downloads allow unbundling the song you want from the filler.

Re:Inflation; unbundling

[protektor]

The cost of albums hasn't changed a whole lot in relation to singles. If anything the cost of albums has seemed to me to have gone up a bit in raw dollars, not buying power. In terms of album costs versus singles cost they seem kind of the same with maybe it being slightly cheaper for the album years ago. The cost of other good has changed but the price of music doesn't seem to have changed a lot and the ratio of single costs to album costs seems to about the same.

Not everyone lives in your town

[tepples]

Half the buses in our town have wifi

My experience differs. The city buses in Fort Wayne, Indiana, have no outlets and no Wi-Fi. Nor do the Lakefront and Greyhound motor coaches between Fort Wayne, Indiana, and Milwaukee, Wisconsin, that I rode back in March of this year to go to the Midwest Gaming Classic. (Greyhound offers Greyhound Express service on some of its routes, but Fort Wayne is not among them.) A publisher of video games capable of running on laptops and handheld devices has to be aware of this lack of connectivity among many of its customers.

Oh horse crap!

[Kamiza Ikioi]

Amazon AND Apple give away free mp3's to keep people coming into their only stores daily. Amazon did the logical thing and applied this to apps. And let me tell you, most of them are CRAP not worth paying for. Every once in a while, a gem like the WolframAlpha app pops up, but not that often. But, it keeps me going back, every single day, cause there's a chance... just a chance... the IGDA is full of shit, cause there are several alternative app stores I've tried, and they offer me no reason to not use the Google one. In fact, I have little reason to go to the Google one unless I hear about something or need something specific. But I go to Amazon, will keep going to Amazon. The rest of their store is nice and slick and simple, like all of their apps. But the free give aways in apps and mp3 is the ONLY thing like it, unless Jobs has a brain fart and publishes an iTunes store with free daily mp3 on Android. HAH! That'll be the day!

Today's app? Wordsmith. It's a Scrabble clone.

It's $2.49, and the 78 ratings show 2 out of 5 stars. Now, let me see... any of you gonna fork over $2.49 for a game with 2 out of 5 stars with 78 reviews, 42 of which are 1 star? No, you're only going to get the game if a friend recommends it. And Amazon did them a FAVOR by getting the game out into the hands of a bunch of people who never would have bought it who might recommend it to friends who didn't catch the 1-day deal.

I'll give the haters the Apple answer. If you don't like how we run our walled garden, GTFO.

The problematic Amazon terms tl;dr

[drb226]

0) You set your app's Amazon app store list price. It cannot be any higher than the lowest list price of the same app anywhere else.
1) Amazon will pay you the greater of either 70% of the sale price or 20% of the list price.
2) Amazon can sell your game at a discounted price (even free) anytime it wants.

This is a double-edged sword. While the ideal scenario is that Amazon sells your app deeply discounted, or for free (thus getting you tons of downloads, and Amazon basically gifting you 20% of the list price per download), the huge downside is that you simply cannot provide your own discount in any other market, or else your Amazon list price must drop permanently to that discounted price.

When it adds up to less than minimum wage

[tepples]

"Driven toward zero" is different from "driven TO zero."

If it's driven toward zero every week, eventually it will approach an amount that adds up to less than minimum wage for the developers.