In-app purchases are often seen as a necessary evil, but is there an alternative?
A number of Angry Birds titles are actually more profitable when in-app purchases are removed, TrustedReviews has learned.
Amazon revealed that Rovio, the acclaimed developer behind the Angry Birds franchise, has seen better margins with games offered through Amazon Underground.
Amazon Underground is a spin-off app store where all apps are free to download, and are modified to be devoid of in-app purchases (IAPs).
“From a developer’s perspective, we just had some quotes a few weeks ago from big developers,” Aaron Rubenson, Amazon Appstore Director, tells us.
He continues: “
Amazon Underground is made possible thanks to a deal struck with a number of developers that sees app creators paid based on the amount of time a user spends in a game.
Instead of profiting from an upfront fee or pay-per-downloadables, developers are now rewarded for the minutes racked all by all users of the game.
“They have users, they have usage, and they just weren’t able to monetise in the old model,” explains Rubenson.
“In Underground, those first two are what you need to drive revenue,” adds the Appstore lead.
Four Rovio titles are currently available on Amazon Underground: Angry Birds Space, Angry Birds Rio, Angry Birds Slingshot Stella, and Bad Piggies.
Rubenson recently told us that just 3% of mobile users buy in-app purchases, based on developer data, which makes it difficult to turn a profit with IAP monetisation models.
He also said developers would “prefer to charge money upfront”, but they believe that “relatively few customers are going to…spend money upfront”.
And when it comes to IAPs, customers are getting “frustrated with that model”, says Rubenson, adding: “Just when things get good, it seems like you’re being asked to pay.”
Related: Best Android Apps 2015
But if all the apps are free, how does Amazon make any money from Underground?
“The app is Amazon’s shopping app. So we have physical goods shopping, digital goods shopping,” explains Rubenson. “For us, there’s value in having customers engage frequently with our mobile shopping app.”
“The thinking is, it’s likely they’ll see other offers that we have, and some customers will go on to shop for other things, so there’s value economically for us there,” he continues.
“The other component is that apps and games customers download through Underground, when they open, customers occasionally will see advertisements before the app and the game starts,” the Amazon exec adds. “So that’s the other way that this works for us.”
According to Rubenson, developer feedback on Amazon Underground is “quite strong” so far.
Amazon Underground currently offers over 1,500 apps and games that will never require payment from a user.
Due to Google regulations, the app isn’t available from the Play Store, and instead must be side-loaded from Amazon’s website as an .apk file.
Share your thoughts on on this revelation in the comments below.