Amazon takes to GDC to promote its game platform and services

Amazon welcomed a handful of developers and press to a reception for its growing gaming business this week at GDC, eager to share some statistics about the company's growing Appstore and its Kindle Fire tablet, originally launched in September 2011.

Gaming is an increasingly important part of Amazon's business, Aaron Rubenson, director of the company's Appstore initiative, told Polygon.

Amazon's focus on gaming extends across many of its services including the company's shopping cart service, which powers in-app purchases on both mobile and desktop categories (see World of Tanks on Amazon, for an example of the latter); the GameCircle social platform; and the newly announced Amazon Coins virtual currency, which launches in May.

GameCircle launched last September alongside the two newest Kindle Fire models, the 7-inch and 8.9-inch Kindle Fire HD. GameCircle provides a competitive social layer, letting players track how they're doing in games compared to friends. What Rubenson wanted to impress upon us was that GameCircle-enabled games have 80 percent more revenue per user (RPU) than non-GameCircle-enabled games. Developers that have included GameCircle support in their games are a third more likely to convert free users to paid, and players are a third more likely to make in-app purchases, Rubenson said.

GameCircle-enabled games have 80 percent more revenue per user

Following concerns from indie developers related to the way Amazon promotes and discounts their games, the retailer has modified its policies to be more developer friendly, Rubenson said. Unlike other platform's marketplaces, games and other apps in the Amazon Appstore are sold by Amazon, not the developers themselves. "We have a long history being a retailer," Rubenson explained. That experience led Amazon to want to control the timing and severity of discounts and promotions, leading to decreased revenue for developers whose software was promoted.

"As we adjusted price, the developer's share scaled," Rubenson explained. "But we changed those terms last year."

The new terms guarantee developers their usual 70 percent of the list price, regardless of what price Amazon drops it to. For example, if a $4.99 game was dropped to $0.99 as a timed promotion, the developer would still receive his usual $3.49 share, meaning Amazon is treating these promotions as loss leaders for its platform.

The company's "Free App of the Day" works a little differently; developers are asked to be a part of the program and, while they're "potentially making less than your 70 percent" of the list price, they are compensated for making their game available. While Amazon "prefers" that these games be GameCircle compatible, it's not a requirement.

With 56 percent of the US Android tablet market and 33 percent of the worldwide tablet market (according to data from Localytics, presented by Amazon), the retailer wants developers to consider its platform a requirement for Android development.

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