Biz Daily: Can Amazon disrupt F2P games with its Underground move?

hello and welcome to Biz daily I'm John Jordan so the news we're talking about today is Amazon's announcement of its Underground app store so this is pretty interesting and um quite a surprise really so Amazon obviously has been around in the mobile space mobile gam space for quite a long time now 2011 it launched it first um Kindle Hardware um and the Amazon app store for Android full title um obviously Amazon runs um Android but runs a special version of of Android so got a for version of Android um which just makes it kind of a its own version so it runs its own app store app store that's created by Amazon so it's very uh very different to the Google Play Store where pretty much you can put anyone can put anything anything live Android the Amazon app store is

kind of um like a quality kind of lead thing from Amazon and Amazon um kind of runs that it's kind of like a pretty much a much more like like apple than Google really it's kind of a vertical um kind of a organized business so the hardware comes from Amazon the the App Store comes from Amazon um even has its own currency um and the next step that's kind of come along now is this thing called um Amazon underground so what's it's kind of seems to risen from is Amazon for many years now now had a had a daily um kind of free app of the day type thing where a paid app has got been free just for a day basically Amazon uh kind to pays the developer um for the money they would have got or some proportion of the money they would have got um or they've lost because the apps gone free um so it's kind of an interesting model that the user or the the consumer um or anyone using the Amazon app store you don't have to be in you don't using Amazon Hardware you can download the the Amazon app store any

Android app it's a bit complicated you have to go into settings and and Fiddle around and download and allow your device to download um kind of unauthorized kind of Hardware um software sorry because um Google Play won't uh you can't download the their App Store from Google Play because it's a kind of a rival App Store so it's kind of like Google locks it out so it's a bit complicated um but anyway for the consumer um if you get the the the if you have the ad store you get free app every day um so obviously pretty compelling the developer is I said is paid by Amazon um so to degree kind of he kind of see a win-win and obviously the point of Amazon doing this is it encourages people to use its App Store um which is kind of what it wants and the Amazon underground kind of initiative is they kind of called it experimental at the moment although it seems like you know a long-term kind of plan um that just extends the model so obviously at the moment you know the bulk of the industry is in free to-play games um P Gam small Niche really um and

Amazon's kind of new thing is um what it calls calls them kind of really free um apps within this this this underground store so it's another like separate store that's games have to be specifically um kind of a uh kind of distributed via Amazon it's not just go through the Amazon app store um but everything in there is free so it's quite weird really so there's some free-to-play games um and you go into the kind of store where you normally buy currency all the currencies free um now this to some degree to some consumers might seem like great wow you know can you imagine a free to playay game where everything's free don't have to wait around for kind of stuff to to build or wait kind of like you know I don't have to wait around to grind out some currency to get the best characters or up up you know level up my characters or get the best sword or anything um it's all free but then of course what that does is for games that haven't been designed to be played in that way it completely destroys the game experience cuz basically just go through and you go I have I started game off and I have the

maxed out character cuz I've just bought everything and I just kind of yeah there's no there's no challenge in there at all it's it's a very odd experience so um we'll have to see kind of how it works but it is very interesting because because for the consumer it's kind of taking taking this idea that um you don't pay for anything um but you start using Amazon Services which is what Amazon obviously wants in the long term wants more people using its services the developer it's more interesting model so they are getting paid by Amazon but Amazon's paying them on a on a kind of a a Time basis so the amount of time people are spending in their game so I should point out it's not just for games so there is software as well um that you can access through the Amazon underground store but in terms of games or in in either term you get paid um 20th get this right so it's .2 um of a dollar per minute played so basically works out um if you work it out it's about just over kind of 8 8

third hours gives the developer $1 at least that's the mathods that I did um so obvious you can see it takes developers quite a lot of time to earn it will take them quite a lot of time to earn money um but in some of the really big games it's interesting that Amazon has launched and they've got some pretty big players in this they' got Sega and glue and Disney and roio got some angry Bir games in there as well so you see these games some of these games have been big time syncs so particularly say Angry Birds Angry Birds you bought for a dollar maybe $2 and you might put kind of 20 30 40 5050 hours into that so you can kind of see for those type of games this model would work or potentially would work I think it's much harder to see how it work for the small Indies um and suddenly suddenly unless they start making games that have 100 hours of gameplay that are compelling enough for people to play through it's going to be very hard for them to generate kind of decent revenues and actually you kind of think freet to play is better potentially for those kind of niches you can generate quite a lot of free-to-play revenue from small niches but people who are very committed cuz obviously freet to playay play games is

only 1 or 2% of people actually spend any money in the game and a lot of the revenue from freet to playay games is generated from a very small number of people spending lots of money this is a completely different model where you basically it's a it's a volume model really it's it's um basically as as as currently set up it's it's like a flat rate so you get $1 per eight and a thir hours spent in your in your software um guess the interesting thing in the long run is if Amazon does get it to a big enough level where there's millions of people playing this playing games in a daily basis there so so decent Revenue are being generated off the back end will developers start to change their game play um will they start to change their design will they start to make games that encourage you to play longer um almost like an inverse of of the old arcade games where you trying to get key off quickly so you put another coin in these would be games where they'd be of you'd be repeating stuff you'd be in kind of replayability you'd have kind of high scores but it wouldn't be like Flappy Birds where you die really quickly it'd be like games where I mean where you spend a long time and then to generate a high score and then when you um and that kind of kind of game

sessions over you are then addicted enough to go back in or or beat your high score there a very different model that could have could could arise from this makes it very interesting obviously you can kind of see we're talking in slightly um uh kind of abstract terms it's really hard it's only just launched and there's very few games on it at the moment but I think it's certainly interesting and Amazon um because it has such a longterm view because it has it own kind of vertical um kind of uh kind of mobile game kind of ecosystem it can do these things other com other kind of companies or other platforms can't can't do um will it work I mean impossible to tell really at the moment obviously to a degree it's a kind of a highrisk high reward thing if Amazon does get to work it will really disrupt the industry um I guess the the big issue is can Amazon Drive enough volume of of of players into its ecosystem to to actually make this work for any you know a decent number of developers to that's ensure it gets the content we'll see we'll be checking it out obviously this will take months and years to check out but um it's certainly interesting and kind of a um we'll see I guess if if if it does if

that does start to gain traction we'll probably see other kind of platform holders trying to do something similar um certainly certainly fascinating move on one that we didn't really expect from Amazon so anyway that was the news for today uh come back tomorrow and we'll see what the news is in see you then