http://www.computerworld.com/s/article/51392/Amazon_apologiz...
And that article even states that they will continue to have price a/b testing, just a more fair sort. They aren't 'trying again', they are continuing.
This is how the vast majority of retail products work. The manufacturer suggests a retail price, but it is up to the retailer to determine what the consumer ultimately pays. Software was sold this way for several decades.
So it strikes me as more "retro" than "original". Not that it's a bad thing -- I love the idea of Amazon split-testing my pricing, because it lets me focus more on the app itself.
This is quite different because in retail the wholesale cost is negotiated between the manufacturer and retailer. Therefore, the price that the retailer chooses to sell the product at to consumers does not change how much the manufacturer makes (except indirectly, by affecting quantity sold and therefore bought from the manufacturer). Coca Cola gets the same amount of money per can if Walmart sells the cans for 20 cents each or $2 each.
In this case, Amazon essentially gets to choose not only the retail price, but the wholesale price, except that the prices are at a fixed ratio to one another and there is a price floor on the wholesale price based on the suggested retail price you gave.
i. List Price. The “List Price” for an App is an amount that does not exceed, at any time, the lowest list price or suggested retail price for such App (including any similar edition, version or release) available or previously available on any Similar Service or the lowest actual price at which you make or made such App available for sale through any Similar Service. You will update the List Price for each App as necessary to ensure that it meets the requirements of this section 5i.
But, I assume, Amazon and the developer split the sale price? If so, then the more money amazon make, the more money you make, right?
Though I assume that Valve consults with the publishers before putting an item on sale. I guess Amazon figures it would be inefficient to have to do that will the multitude of apps they are expecting.
I could see some pretty angry developers pulling their app, and having amazon's "automated" pricing engine heavily reduce the app's price at the same time.
Amazon pricing on a large range of products pretty much change daily; for example Books:
In the next week we'll also be adding optional price tracking for any item you already have in a public Amazon Wishlist.
What works to grow and establish a market may not be best later. Right now app stores and e-books are still up and coming, it's more important to get them accepted and popular than to maximize efficiency or revenue. Once they are more mature, things may change.
iTunes put it in people's heads that a song is worth $1. Amazon is working hard at saying that a book is worth $10. This is the same model - by setting the price for individual apps, Amazon is going to be setting the price for the entire industry. I'd assume Amazon would almost always price an app lower than developers would (and I doubt you'll be able to game the system by suggestion for 2x what you would have otherwise), meaning an overall downward pressure in app prices.
Would benefit users...seems impossible to tell whether it'll benefit developers (or whether other aspects of the store will compensate them, such as with increased sales).