At the end of August, Amazon dropped a bomb on the android app eco-system when it announced Amazon Underground, an app that contains thousands of apps, valued over $10,000, for free. Today it is being reported that developers who have put their apps in Amazon Underground are seeing significant revenue spikes, and the amount of apps available have tripled since the launch.
The Amazon Underground app operates just like the traditional Amazon Shopping app, only it has an extra "Underground Apps" tab where you can download the likes of Goat Simulator, Shadow Gun, Monument Valley, Duck Tales Remastered, and thousands more at absolutely no cost. Even the extra bonuses, items and additional levels that would previously be in-game purchases are included for free. Amazon has made it possible to give users all these apps for free by entering a mutually beneficial arrangement with the developers. Amazon pays developers $.002 for every one minute users spend in the app, and the free apps draw users to the Amazon eco-system. It may not sound like the developers are receiving much money, but when you are talking about thousands of addicted Angry Birds players fanatically replaying levels, it equals enough that Rovio is reporting its profits have tripled since adding their products to Amazon Underground.
Rovio isn't the only app makers seeing this new distribution method pay off in big ways. Halfbrick Studios, the developers behind Jetpack Joyride and Fruit Ninja told Business Wire "Thus far we have doubled the downloads and revenue from our apps in the Amazon Appstore and most interestingly, customers are engaging with our in-app purchase content within our games at an extremely high rate. Since all in-app purchases are free in Amazon Underground, they can play the games in new and exciting ways."
Amazon Underground works on Amazon's Fire tablets as well as Android phones and tabletsâ€"and that is really the play here isn't it? Amazon's move here isn't all that surreptitious, as it being seen as a way for Amazon to up the ante and offer something that is not offered through the Google Play Store. If Amazon Underground continues its rise in popularity, (which is probably just an issue of alerting users to its existence) how does the Play Store compete against 'free'? Which also begs the question, how long can Amazon afford to pay developers for apps that the company is not making money on? If Amazon Underground becomes the primary source for downloading apps, eventually Amazon has to make revenue in order to pay for these apps. It's hard to say what the company's plans for the future are, but this experimentation is certainly beneficial for users and developers in the here and now.