Earlier this week, video game retailer GameStop (NYSE:GME) released a software application on the Google (NASDAQ:GOOG) Android App Market that was particularly significant for the company’s future — It provided users with about 300 free games from Kongregate, a casual and social game website that GameStop acquired last summer as part of a move into digital video game distribution.
The app was downloaded, “tens of thousands of times,” according to GameStop, before Google promptly removed it from the App Market. On Wednesday, video game website Joystiq published an interview with Kongregate CEO Jim Greer, who confirmed that the app was pulled because Google said “you can’t use their app store to distribute another app store.”
As Greer goes on to say, it’s strange on its own that the Kongregate app would be designated as an “app store” considering its range of disparate content is free and advertising-supported. There are many apps available on Google’s App Market, Apple’s (NASDAQ:AAPL) App Store, Nokia’s (NYSE:NOK) Ovi Store and most every digital storefront for software that offer multiple services within a specific app. Electronic Arts’ (NASDAQ:ERTS) Pogo app features both paid and free game content, for example.
Given Google’s public stance that the Android platform and attendant App Market are intended to be more open than the heavily monitored and controlled Apple App Store, the banning of GameStop’s app is troubling to other app developers.
Troubling for investors, however, is the precedent that Google is setting for companies that were planning to release actual app storefronts through the Android App Market. Amazon.com (NASDAQ:AMZN) confirmed at the beginning of January that its much-rumored app store would open this year on Google’s Android operating system first, and would be presumably distributed through the Android App Market.
When it announced that developers could begin submitting apps for inclusion in the store in early January, Amazon stressed that it would differentiate itself from Google’s App Market by tightly curating the service. Now, it would seem that Google feels threatened by the introduction of competing storefronts being distributed through its stores.
And what does this mean for existing digital storefronts available on the Android App Market? Will Google move to blog Amazon’s Kindle or Barnes & Noble’s (NYSE:BKS) Nook e-bookstore given that they compete with Google Editions? If Google does move to block them, will Apple follow suit? Google’s already begun bolstering the selection of full movies on YouTube in deals with Lions Gate Entertainment (NYSE:LGF), so will the company block hugely popular Android apps like Netflix’s (NASDAQ:NFLX) streaming service on the grounds that it’s an app store?
Google has yet to comment on Kongregate’s removal from the App Market. In the meantime, it remains available for manual installation at GameStop’s website. Without access to a devoted app store with fewer restrictions than competing outlets, how will Google curry favor with app developers?
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here.
