Amazon’s New Free-to-Play Store Challenges Steam for Game Distribution

Amazon made back-to-back videogame announcements last week, showing its dedication to moving beyond music, video and e-books in the digital content space.

The first piece of news was Amazon’s new GameCircle, which allows gamers on the Kindle Fire to record and track their achievements and to save their game progress to the cloud — similar to features found in Apple’s Game Center.

The second addition is called Game Connect, an e-commerce distribution system that lets customers discover and download free-to-play PC games. Amazon is also handling some of the back-end features for the developers, such as selling virtual goods and subscriptions.

Take, for instance, Uber Entertainment, a 16-person development shop in Kirkland, Wash., that started distributing its game, Super Monday Night Combat, through Game Connect last week.

John Comes, creative director at Uber Entertainment, said that, until now, the company distributed its games only through Steam, the Valve-owned-and-operated digital game distribution platform on the PC. With Amazon, it now has two points of distribution.

“We’ve been working with them for six months. We were talking to various people about getting the game to more people, but for us, they can bring a lot of users,” he said.

Uber Entertainment’s Super Monday Night Combat game is a free PC download that makes money through the sale of virtual goods, similar to games distributed on Facebook. Uber does not have the infrastructure to charge customers directly, which makes a partnership with Amazon sensible. The retailer has millions of credit cards on file, enabling customers to quickly link their game play to their Amazon account.

Once games are linked to Amazon, users can pay and shop for virtual goods on Amazon’s homepage. For instance, Hippies in the game cost $9.99, a tank costs $4.49 and Captain Spark costs $7.49. Each character in the game has a landing page on Amazon’s site, enabling all the sorts of features you would normally associate with a product for sale on the site — such as the ability to add it to your cart or add it to your wish list.

The wish list capability appealed to Uber. “A kid can say ‘I really want this character for Super Monday,’ and parents can buy it for them,” he said.

This is not Amazon’s first foray into the digital distribution of videogames.

In October 2010, the company launched its digital games store, which offers customers more than 3,000 titles, including free-to-play and massively multiplayer online games. But with Game Connect, it makes shopping for virtual goods much easier. It also makes it much more comparable to the Steam service, though that targets a much more hardcore gaming demographic.

Amazon said terms of the store will be similar to industry standards used by Facebook and Apple’s App Store. It will share 70 percent of virtual good revenue with developers.

However, when it comes to price, Amazon will decide the cost of virtual goods, not the developer (although he or she will have some influence). Amazon will set a sales price for an app, and developers will set a list price. Amazon also uses this model on its Appstore for Android, where it distributes games and apps for developers.

It claims to have the resources to monitor sales across the board and come up with a strategy that will maximize sales much faster than a developer or publisher would normally be able to react.

In addition to helping with the payment process, Amazon says with Game Connect it will provide significant resources to the developer, including marketing, discovery, customer service and downloads. A spokesperson said in a statement, “We work hard to help customers find and discover great new games they never knew about and are focused on offering a great shopping experience along with fast and excellent customer service. We do provide a download service from the cloud for client-based games but provide a link to developer servers for browser-based games.”

The one situation where payment terms could get a little sticky is when a player originally discovers a game on Steam’s service, but then connects to Amazon to pay for the virtual goods. Amazon and Steam have likely figured out a way to compensate each other behind the scenes.


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