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Amazon Allows In-App Purchases Of Physical Products

Although Amazon has made its identity as a seller of tablet PCs and e-readers through the Kindle Fire and the Kindle, it is still first and foremost a retailing company. Recently, it underscored these two roles by allowing app developers to sell physical products through the application itself.

This decision has a number of benefits, both for the app developers as well as Amazon. The most obvious is that the app developers may earn more income from the app. This could make the new Kindle devices that Amazon recently unveiled along with the Amazon’s Appstore for Android more attractive for developers. Moreover, this feature will help Amazon stand out from its competitors, Google and Apple, which do not offer the same service at the moment.

Amazon had already inked a deal with Activision, the popular video game publisher behind titles like Guitar Hero and several Marvel games. Activision has a game for kids called Skylanders Cloud Patrol. Players of the game will be able to purchase a real toy based on a character in the game through a one-click system. The developer will send the toy to the child’s doorstep. Meanwhile, the child will be able to unlock the character in the game through the purchase and use such character to play in the game.

Even prior to this announcement, Amazon has been recognized as a good place for developers to monetize their apps. Last March, a report from Flurry examined the top apps on the Amazon Appstore for Android, Google Play, and the Apple App Store. They found out that Amazon apps are able to generate as much revenue as iOS apps for as much as 89%, while Google Play apps only get 29% of the same.

Apart from Activision, several game companies also sell toys. Rovio, for one, has Angry Birds merchandise, while Zynga is reportedly in talks with Hasbro to create toys based on their games. These companies, and even others not involved in making games for children, can take advantage of Amazon’s new offering.

via allthingsd

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  1. Amazon is in a unique position to take full advantage of selling physical products through apps which Apple, Google, and Microsoft just can’t replicate. Amazon is already a very trusted brand for online shopping for pretty much everything – our family probably buys 80-90% of all non-grocery items from Amazon. With the Prime membership providing free two-day shipping, its just incredibly convenient. Tying that convenience to apps could be a huge innovation in mobile app development.

    I’m sure that the other companies will try to do something similar, but since they don’t actually distribute the products these efforts are probably going to result in a lot of “app storefronts” instead of the functionality being built directly into an already useful or fun app/game. This could be a game changer.

    Amazon doesn’t make the profits that Apple/Google/Microsoft makes, but they have been VERY heavily invested in developing its brand and creating an ecosystem (typically based on loss leaders or extremely low prices) which is going to reap huge benefits in years to come. Profits may suffer somewhat now, but nobody is better positioned than Amazon for the future. Amazon’s leadership plays the long game better than anyone right now, which is amazing in today’s short-sighted, what-have-you-done-for-me-lately, profits-based culture.

    Great article, thanks!

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