Read the full letter here

For those with an interest - Amazons new app-store for Android do have some 'interesting' terms of use since it went public two weeks ago, but this might set a very dangerous trend for developers.

For those who want the short version:
"Amazon reserves the right to control the price of your games, as well as the right to pay you "the greater of 70% of the purchase price or 20% of the List Price." While many other retailers, both physical and digital, also exert control over the price of products in their markets, we are not aware of any other retailer having a formal policy of paying a supplier just 20% of the supplier's minimum list price without the supplier's permission. Furthermore, Amazon dictates that developers cannot set their list price above the lowest list price "available or previously available on any Similar Service." In other words, if you want to sell your content anywhere else, you cannot prevent Amazon from slashing the price of your game by setting a high list price. And if you ever conduct even a temporary price promotion in another market, you must permanently lower your list price in Amazon's market [...] The IGDA's bottom line is simple: under Amazon's current terms, Amazon has little incentive not to use a developer's content as a weapon with which to capture marketshare from competing app stores. "

Whilst IGDA holds the view that:
"1) A developer's permission should be required by any retailer seeking to pay less than the standard percentage of a developer's minimum list price. This could be automated and even "opt-out" with a reasonable period of notice, but ultimately, a developer's permission should still be required.

2) Developers should have the freedom to set a minimum list price of whatever amount they see fit, without regard to pricing in other app stores."

Sadly my bet is that Amazon will ignore everything and steam ahead...

Edit: Hah - and I managed to spell Amazon as Amozone in the thread name.... one fo thise day's I realy need to learn too type proporly

Is that how they get the "Free App of the Day" deal?

Short answer- Yes

This is pretty much how industry works. Can I point something out before we get to the part where you call me stupid? Because Amazon reserves the right to pay the greater of 70% of sale or 20% of list, that means that you only get the 20% of list when the game is selling for less than about 28.5% of list price - so initially, when your app is new, you're probably getting the 70% of sale price. You know what digital distributors keep on game sales? I do. It's 30%. See how that matches what Amazon is doing?

Now if Amazon wants to hurt you, they have to hurt themselves. The free app of the day means that for every one they give away, they're losing 20% of the list price of the app - and the publisher is getting 2/7ths of the best profit per sale they could get, *and* they're getting a greatly increased volume of sales (because a lot of people will buy an app for free that they wouldn't pay for).

Amazon is a raging out of control river of content. Everyone and their grandmother knows about it. So the deal that you point out is another case of "nobody knows you, so sell it yourself for all the moneys, or let us sell it for you for less moneys each." It's capitalism in effect, really, and while you're welcome not to like it, the choice of full profit for fewer sales or partial profit for more sales is the kind of thing that a developer needs to make for themselves. Amazon's not really screwing developers that badly. They're just making the opportunity cost clearer.

edit: typo and a clarification

The % is not really the main point in the letter, even though it is the lowest one recorded. The issue IDGA is raising is the complete control Amazon is enforcing - if you read their goal they do not say anything about any percentages, but that:

"1) A developer's permission should be required by any retailer seeking to pay less than the standard percentage of a developer's minimum list price. This could be automated and even "opt-out" with a reasonable period of notice, but ultimately, a developer's permission should still be required.

2) Developers should have the freedom to set a minimum list price of whatever amount they see fit, without regard to pricing in other app stores."

There is also a fear that Amazon can use this stipulations to force other retailers out of business. The 20% is only the opening lines.

In the letter they pose 5 concerns with this business strategy:

"1) Amazon steeply discounts a large chunk of its Appstore catalog (imagine: "our top 100-rated games are all 75% off!"). Some developers will probably win in this scenario, but some developers -- most likely, those near the bottom of the list -- will lose, not gaining enough sales to offset the loss in revenue per sale. Amazon benefits the most, because it captures all the customer goodwill generated by such a promotion.

2) By requiring all developers to guarantee Amazon a minimum list price that matches the lowest price on any other market, Amazon has presented developers with a stark choice: abandon Amazon's market or agree never to give another distributor an exclusive promotional window.

3) Other digital markets that compete with Amazon (both existing markets and markets yet-to-be-created) may feel compelled to duplicate Amazon's terms, and perhaps even adopt more severe terms in an effort to compete effectively with Amazon. In essence, we're looking at a slippery slope in which a developer's "minimum list price" ceases to be a meaningful thing.

4) Amazon steeply discounts (or makes entirely free) a game that has a well-defined, well-connected niche audience. The members of that niche audience snap up the game during the promotional period, robbing the game's developer of a significant percentage of its total potential revenue from its core audience.

5) Amazon steeply discounts (or makes entirely free) a hit game at a time when the game is already selling extremely well. This sort of promotional activity may attract consumers away from competing markets and into Amazon's arms. But it might actually represent a net loss for the developer, which was already doing quite well and didn't need to firesale its game at that moment in time."

From a developer point of view there are some worrying things there. So in this case, maybe it is only capitalism - but the more rampant kind?