Today Amazon.com launched it’s Casual Game Portal featuring over 600 games priced at $9.99 or less. Last October I wrote about how Amazon bought Reflexive and was just thinking last night “hmm, I wonder when Amazon will actually do anything with their acquisition?” and then … BAM … today they launched their portal.
Only newer games seem to be priced at $9.99, many are less; for example my own games are $6.99! Clearly this is an effort to compete with the Big Fish Games Game Club ($6.99) and Game House ($5.99) etc. The problem is that with a price war no-one wins and casual games are getting devalued yet they still take a large budget and a lot of time to make (well, the good ones do anyway).
Actually it’s not entirely true that no one wins – the customers win! But developers certainly don’t because they will see their average royalty drop from $8 to as low as $2.40! Obviously if sales increase by 3 times then maybe it’s not so bad – time will tell. Also price warring can be dangerous for the businesses as they profit drive margins lower and lower. Really the best way to compete is on the old classic Unique Selling Point and customer service. Perhaps now really is a good time to be making niche Indie games and selling them on your own site (or XBLA games of iPhone games)? Who knows? Again time will tell…
It will be interesting to see if I start making more sales via Reflexive now that Amazon owns them and the price has dropped. I certainly get tons more sales (and better conversion rate) from BFG who has a lower price (than the old Reflexive $19.95 price) and more traffic.
One other thing, I noticed that Amazon is not selling Mac games even though Reflexive does. I wonder if they’ll start supporting this soon? Also the Amazon site is frankly not that pretty, is it? But they are a huge player and this is early days yet so anything could happen. Something to keep an eye on for sure.
Oh and to end positively… because Amazon are such a big “player” (yes great pun, thanks) they may make many more people aware of the whole Casual Games thing which is not a bad thing for the Industry. They may even buy game development companies to start up their own brand (like BFG does) but then again I think they have always focused just on distribution and not manufacturing (please correct me if I’m wrong) so maybe making their own games is not very likely.
[Edit] Seems like Juuso is writing about the same thing if you want to read more.