Video game developers group slams Amazon pricing

NEW YORK Thu Apr 14, 2011 11:24am EDT

Workers scan goods at the Amazon warehouse in Leipzig, December 3, 2008. REUTERS/Fabrizio Bensch

Workers scan goods at the Amazon warehouse in Leipzig, December 3, 2008.

Credit: Reuters/Fabrizio Bensch

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NEW YORK (Reuters) - A group representing individual video game developers has accused Amazon.com Inc of setting pricing terms that could harm them in the long run and of trying to win a near monopoly selling games made on Android software.

The International Game Developers Association in an e-mail to members on Thursday took issue with Amazon for requiring developers to permanently lower their prices on Amazon if they offer a discount, even temporarily, on another outlet.

"Amazon has little incentive not to use a developer's content as a weapon with which to capture marketshare from competing app stores," the IGDA said in its note.

The group also said Amazon's steep discounting of games hurts developers by unnecessarily lowering prices on games that are selling well.

That echoed book publishers' accusations in 2010 that the low prices Amazon wanted to charge for books on its Kindle e-reader, even for bestsellers, cheapened the value of books.

Amazon, which last month launched its "Appstore" with games developed using Google's Android software, did not immediately respond to a request for comment.

Last month, Amazon raised the ire of music labels when it launched a service that lets customers store songs and play them on a variety of phones and computers without warning them first. Amazon executive are meeting with music industry companies on Thursday, sources told Reuters this week.

While the IGDA said Amazon has been willing to address its concerns, it said that could change "the minute Amazon's Appstore becomes so big that Android developers have no choice but to distribute their content via the store."

But Amazon's market position could prove irresistible.

"The Amazon ecosystem is controlled where we don't find too many pirated versions of our games or malware games, so for the consumers, it will be a safer place," Gameloft Chief Executive Michel Guillemot told Reuters in an interview last month in reference to Amazon's store.

Amazon shares were down 1.1 percent in morning trading.

(Reporting by Phil Wahba and Liana B. Baker, editing by Dave Zimmerman)

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