Gaming organisation slams Amazon price fixing

The Independent Game Developers Association (IDGA) has slammed the pricing and payment policy of Amazon's Appstore.

The organisation, which looks after the interests of the kind of smaller coding outfits and one-man-bands beloved of the likes of Apple and Amazon's app stores, says the giant book-seller's terms and conditions could be damaging to future game development as well as the developers themselves.

In an open letter to Amazon, the IGDA says that it has 'significant concerns' about the app store's distributions terms 'and the negative impact they may have on the development community'.

The main thrust of the complaint seems to address Amazon's insistence that it should be allow to set prices as it sees fit, and control prices in comparison to other app providers.

Basically, if an app developer decides to offer its wares at a discounted rate on another platform in order to create a buzz, for example, Amazon reserves the right to reduce its own price without recourse.

"Many journalists have noted the unusual nature of Amazon’s current store terms, but little has been said about the potential implications of those terms," states the missive. "In brief: Amazon reserves the right to control the price of your games, as well as the right to pay you 'the greater of 70 per cent of the purchase price or 20 per cent of the List Price.' While many other retailers, both physical and digital, also exert control over the price of products in their markets, we are not aware of any other retailer having a formal policy of paying a supplier just 20 per cent of the supplier’s minimum list price without the supplier’s permission."

The IDGA says it has identified five major problems with Amazon's terms and conditions:

1) Amazon steeply discounts a large chunk of its Appstore catalog (imagine: “our top 100-rated games are all 75 per cent 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.

The organisation says that the policy gives Amazon little incentive not to use a developer's content in order to steal market share from competitors and says the company should allow contributors to set prices as they see fit.

"If Amazon responds to this open letter, it will likely invoke the success of games that have already been promoted in its Appstore; for example, games that have been featured as Amazon’s free app of the day," write the IGDA Board of Directors. "The company may claim that the success of those games is proof that Amazon’s model works. The IGDA believes that this argument is a red herring.

"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."