Amazon's Appstore has been chugging along for a couple of weeks now. I was highly dubious that there was a need for it, but I have to admit I've become something of a convert. The daily free app probably has something to do with it; it gives me an incentive to visit every day.
I never stopped to think about what impact that free app (often a game) had on developers, probably because I'm not a developer. But it turns out that game developers, at least, have some serious issues with Amazon's terms.
To hear the story from the horse's mouth, so to speak, check out the IGDA (International Game Developers Association) blog post on the topic, or read the full text of the open letter the IGDA sent to Amazon and the development community over at VentureBeat.
If I'm reading things correctly, Amazon is setting the actual prices of Android games on their Appstore (the developer sets the list price but if Amazon chooses to offer it for another price they can do so). Amazon then pays the developer either 70% of the purchase price, or 20% of the list price, whichever is higher. So if an app costs $1 and I buy it, the dev gets 70 cents, but if Amazon makes that app the free app of the day and I download it, the dev gets 20 cents.
Whether this works out for or against the dev depends on how well the app was selling before the sale, but the point is that Amazon decides to give the app away, not the developer. And as the IGDA points out, we consumers think Amazon is great for giving stuff away. They get the good will generated from the freebies.
Another sticking point is that the developer has to set the list price of her app no higher than it has ever been offered in another appstore. So if a dev has an app she normally wants to sell for $4.99 but she ran a launch-day special on the Android Market and sold it for 99 cents for a day, she has to price it at 99 cents on the Amazon Appstore.
There's more, but rather than read my re-interpretations, it's probably best you learn more about the situation directly from the IGDA at the links above.
Last month I was writing about the possibility of an Amazon Tablet and I said "The best news for Amazon is that they've gotten as big as they are without being labeled as evil by too many people." Perhaps I was being naive because this system is sounding a bit evil to me.
[Update: Amazon has responded to the IGDA's concerns, saying they were based off an old version of the Appstore's terms. ]