Starting today, Amazonis finally giving developers in its Appstore the opportunity to sell digital content and subscriptions within their apps. As part of the announcement, the retailer is also confirming it will take a 30% cut of each transaction, which is the standard across both Apple’s App Store and Facebook. Google is one exception because it takes only 5%.
The announcement is not a huge surprise since it has been testing in-app payments over the past few months with a number of developers in the Amazon Appstore, which runs on the Kindle Fire and a number of Android handsets.
The payments platform utilizes Amazon’s well-recognized and trusted 1-click purchasing experience that so many consumers familiar with from shopping online. By bringing it to mobile, it will make it easy for consumers to purchase a few more coins inside a game or to subscribe to a magazine.
While the announcement sounds fairly basic, the roll-out is important for Amazon to get right since developers’ initial reception to the Appstore was a little strained — and stories of making money on the platform have been mixed. That’s because unlike other app stores, Amazon has decided to dictate how much an app sells for, and in some cases, they elect to make apps free a part of its Free App of the Day promotion. In doing so, developers sometimes make less revenue than they would normally expect (especially since there was no potential upside from in-app purchases).
In contrast to how it sells apps, developers and publishers will be able to set the price of the items within the store, including virtual goods or subscriptions, an Amazon spokesperson said. Based on developers that participated in the beta tests, so far Amazon’s Appstore looks like it has been monetizing well. Storm8, which was one of the game developers that participated in the beta test, told All Things D it generated USD 700,000 in revenue from in-app purchases in March — before Amazon’s cut. The Redwood City developer said it has 10 free-to-play apps in the store, including titles, such as Kingdoms Live, Nightclub Story and Farm Story, and at one point, four of its games ranked in the top five most popular free apps on Amazon.
Flurry, which provides analytics software to developers, also estimated that Amazon’s in-app payment platform monetizes well, and that it outperforms Google Play, but fell short of industry’s gold standard, which is Apple. Still, it’s unclear whether Amazon will be able to woo developers given that its is so much smaller than the other players. Last month, after celebrating its first year in business, Amazon confirmed it had more than 31,000 apps in its store, which is far fewer than both Google and Apple. It’s also unclear how many devices the Appstore is installed on since Amazon does not share much information, including how many Kindle Fires it has sold. According to a report by IHS’s iSuppli, it shipped 3.9 million Fires in the fourth quarter to claim 14.3% of the market. That makes it the world’s second-largest tablet vendor, surpassing Samsung, which has been in the market far longer and with many more devices.