Amazon Launches In-App Purchase Mechanism for Amazon Appstore Apps

Amazon Launches In-App Purchase Mechanism for Amazon Appstore Apps

Apr 11, 2012

While it was announced a while ago, the Amazon Appstore API for in-app purchases is finally live. This is a major milestone for Amazon’s store, as free-to-play games have previously had to use third-party payment processors in order to generate the kind of revenue that is driving mobile games as of late.

While revenues have been coming at better rates on the Amazon Appstore than on Google Play, the latter has offered IAP systems where the former did not. The real strength that Amazon’s IAP system will provide is the ability to one-click purchase content with Amazon accounts, which many users have accounts for – with credit cards on file. So if Amazon is empowering increased spending from users just by buying apps, and if now they’re enabling the revenue driver in mobile apps, then it could make the Amazon Appstore even more powerful of a market for selling Android apps than Google’s own.

There’s already evidence of this working – Storm8 saw a 1000% increase in sales when they were taking part in the beta of the API. Even if it doesn’t have the same impact for Amazon Appstore apps at large, it could still be huge for developers on that store. While total numbers are unknown, Amazon had 80 million customers monthly (as of 2010) compared to iTunes’ 210 million+.

Google might need to watch their back, or figure out just what Amazon is doing to improve their margins, if it is just a matter of having payment information on file. While they may want to push their own Google Wallet, there’s increasing evidence that not having as much payment information on file as their competitors at Apple and even Amazon (who are co-opting their own OS, remember) is a weakness to developers on the service. Partnering with PayPal, who may be running behind Apple nad Amazon but are still a massive payment processor, may help with this increasing divide.

Or maybe it’s not a matter of having credit cards on file. Maybe the structure of Apple and Amazon’s stores are what is making it easier to discover apps, or the Kindle Fire is going a long way toward improving Amazon’s margins. But Google needs to find something in order to make their market more friendly to developers and prospective customers.