In-app purchases may have become the dominant way for developers to make money from charging for their apps, but Amazon’s new app takes a sledgehammer to the model.
Well, in a sense. Amazon Underground is an app for Android smartphones that offers a catalogue of apps and games with their in-app purchases all reduced to zero. Users can still “buy” virtual currency and items, but Amazon will pay for them – touting an “actually free” slogan.
“We’ve made this possible by working out a new business model with app and game developers: we’re paying them a certain amount on a per-minute played basis in exchange for them waiving their normal in-app fees,” explained the company in a letter to customers, introducing Underground.
In developer documentation for the new app, Amazon said that developers will be paid $0.002 per minute of usage – a figure that translates to £0.0013 in the UK and €0.0018 in Germany and France.
The company has published a “revenue forecasting calculator” for developers to work out how much their existing Android app might make under the system, based on how much it was used and how much it earned in the past month.
Among the games offered within the app are Fruit Ninja, Star Wars Rebels: Recon Missions, Angry Birds Slingshot Stella, Jetpack Joyride and Goat Simulator, while the apps include OfficeSuite Professional 8.
Users will have to download the app directly from Amazon, as the rules of Android’s official Google Play store prohibit alternative app stores from being distributed within it.
Amazon has clearly been thinking about potential loopholes in its new system. For example, it has told developers that “anti-virus or clock apps that run continuously in the background” will not be suitable for the initiative, and neither will “apps that support passive streaming content” like music or video.
The company also says that it will show advertising when apps first launch, and sometimes when they are launched or resumed by a user.
Amazon Underground may be limited to four countries for now, but it is a significant tilt at freemium, which has become the dominant way for developers to make money from charging for their apps.
Analytics firm App Annie estimates that 95% of spending on iOS apps within Apple’s App Store in 2014 was in-app purchases – suggesting that $9.5bn of the $10bn paid out to developers by Apple that year came from IAPs.
The difficulty of installing apps on iOS devices from outside the App Store – where Amazon Underground will also be barred – means the new app is almost certain never to launch for Apple’s devices.
This article was written by Stuart Dredge, for theguardian.com on Thursday 27th August 2015 11.16 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010