Bloomberg News

Amazon Said to Add Social Features for Tablet Digital Games

June 28, 2012

Amazon.com Inc. (AMZN:US) will make it easier for developers to add social features to games for the Kindle Fire tablet, a person with knowledge of the matter said, working to narrow Apple (AAPL:US) Inc.’s lead in the market for tablets.

The world’s largest online retailer plans to release tools for digital-game makers by the end of July, said the person, who asked not to be identified because the plans aren’t public. Developers will be able to add a broader range of features, including tracking high scores and monitoring awards won while playing games, the person said.

Chief Executive Officer Jeff Bezos is rushing to make Kindle games more alluring to help Amazon increase sales of the devices, which hold 17 percent of the $66.4 billion tablet market, compared with 55 percent for Apple’s iPad. Amazon is also trying to woo developers to help it grab a bigger slice of the global social-gaming market, which Lazard Capital Markets predicts will reach $8.98 billion in 2015.

“Amazon has been hiring a lot of folks in games, both developers and people to help grow their platform,” said Colin Sebastian, an analyst at Robert W. Baird & Co. in San Francisco. “Third-party developers are also warming up, because monetization is better on Fire than other Android devices.”

Cat Griffin, a spokeswoman for Amazon, declined to comment.

Amazon lags behind rivals in downloadable applications. The company has about 43,000 apps, compared with 4,000 when the store debuted in March 2011. Google (GOOG:US) Inc. and Apple each offer more than 600,000 apps.

Still, Amazon’s store, which peddles apps built for Google’s Android software, generates more revenue per user than Google’s.

Money-making Apps

Every $1 generated in Apple’s iTunes App Store fetches 89 cents in Amazon’s and 23 cents in Google’s, according to Flurry, a provider of app-analytics software.

Amazon, based in Seattle, has already taken steps to make apps more appealing. It started letting users make purchases within the applications sold in its online store in April, matching a feature offered by Apple and Google.

Adding variety to the app store is part of Amazon’s strategy to increase demand for the Kindle tablet, which went on sale in November and generates revenue through sales of digital music, books, movies and apps. Amazon may make $136 on each Kindle Fire over the lifetime of the tablet, thanks to movie, book and app downloads, Ross Sandler, an analyst at RBC Capital Markets in New York, estimated in January.

Kindle had 17 percent of the tablet market in the fourth quarter, while Apple’s was 55 percent, according to researcher IDC.

Amazon fell 1.9 percent to $221.31 at the close in New York. The stock has climbed 28 percent this year.

To contact the reporter on this story: Danielle Kucera in San Francisco at dkucera6@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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Companies Mentioned

  • AMZN
    (Amazon.com Inc)
    • $299.3 USD
    • 5.18
    • 1.73%
  • AAPL
    (Apple Inc)
    • $107.11 USD
    • -0.23
    • -0.22%
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