Amazon launches casual games site

Amazon announced the launch of their casual games download site. They bought Reflexive a while back, and so this wasn't unexpected, but it certainly is going to shake things up a bit in the casual games space, if not in the games digital distribution space in general. Some things to note:

• The downloads are priced at $9.95 for most downloads and $6.99 for back catalog. This vs the $19.95 that is common in much of the casual games space. (e.g. Jewel Quest III on Amazon, vs MSN). Lots of sites have played with lower pricing but usually as a promotion, on select titles, etc. This is an outright assault on the $19.95 price point that's going to have impact, if not kill it entirely.
• They are offering downloads, but no free play on the web (ad-supported), no subscription offering, no other business models for monetizing games.
• There are a couple notable absences from the catalog (perhaps related to the pricing?). No Popcap content. No Playfirst content (Flo is a no-show!). No EA Casual Hasbro licenses. Hold the line guys! (uh, ya, good luck with that)
•  While these are all casual game downloads, note that it doesn't say "casual" anywhere. Just 'game downloads'. There's no reason they can't get into digital distribution of large download game titles if they feel the money is there.

Ok, so to quote my fave line from Burn After Reading, so what have we learned?

Amazon's entry marks the entry by a very large etailer into the games download market. If you distribute content this way, or plan to, take note. If you are an etailer or distributor (Steam, MSN Games, Oberon, etc) take note if you haven't already.

It's a really good time to think hard about who you are and what your core strengths are. e.g.

• Amazon is an etailer that offers games for purchase. It's a store. They have great transactional tools, and are great at removing hurdles between the customer and the cash register. However, I'd guess they are weaker on understanding their customer's playing habits, preferences, etc, and don't offer other business models for customers to get games. They've also got things like their associates program for referrals and such.
  
• MSN, to contrast, is a destination. Once there, users can choose to access games via a number of different models, and the catalog is curated for them based on the MSN communities tastes, etc.
• Oberon is a distributor. They have unparalleled reach, and can use that to optimize the suggested merchandising their network uses to maximize revenue, they can also offer distribution to game devs and pubs that other people can't.
• Steam (just to pick a different example), is a service first. One of the elements of that service is that they offer their customers games for sale, but it's worth noting that this isn't the whole offering, just a piece of it. They've also got great 1st party content that customers WILL come in the door for, regardless of what else Amazon or another competitor offers. So long as Steam is the place to come get Gordan Freeman goodness, that's where his fans will come.

Anyhow, I highlight these examples only to make the point that when there's a shakeup of this nature, it's a good time to think about what your core competencies are, and then focus on making those delight your customers.