Amazon expands Kindle Fire in-app purchases to include physical goods

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Amazon is introducing new in-app purchase options enabling Kindle Fire software developers to sell and ship physical goods to consumers.

Game publisher Activision is leveraging the new feature in the 99-cent Kindle Fire version of its Skylanders Cloud Patrol. Players can purchase physical Skylanders toys via Amazon's 1-Click Purchasing option, and the digital retail giant will mail the product to the consumer. Buying a toy also unlocks a digital character within the game.

The introduction of in-app physical product sales further differentiates Amazon's Appstore for Android from Google's (NASDAQ:GOOG) rival Play storefront and Apple's (NASDAQ:AAPL) App Store, both of which limit in-app merchandising to digital content like in-game currency and power-ups. Amazon recently announced that the number of developers building apps for Appstore for Android has more than doubled over the last year, crediting the growth to monetization features like 1-Click Purchasing and adding that the average in-app transaction now yields more than twice the revenue of the average premium app transaction.

Players can purchase physical Skylanders (picturedtoys via Amazon's 1-Click Purchasing option, and the digital retail giant will mail the product to the consumer.

Amazon introduced three new Kindle Fire HD tablets last week: An 8.9-inch large-screen, LTE-equipped model priced at $499, as well as Wi-Fi-enabled 7-inch ($199) and 8.9-inch versions ($299) without LTE functionality. The devices offer access to more than 22 million Android applications, e-books, movies, TV shows, songs, audiobooks and magazines.

Gaming is a major component of the Kindle Fire platform. The new tablets introduce Whispersync for Games, which syncs the player's place in the game and saves unlocked levels, backing up all progress in the cloud for gameplay across multiple devices. Additional gaming enhancements include a gyroscope and accelerometer for full tilt and turn controls, as well as social gaming features like group leaderboards and achievements.

"We want to make money when people use our devices, not when they buy our devices," said Amazon founder and CEO Jeff Bezos. "If somebody buys one of our devices and puts it in a desk drawer and never uses it, we don't deserve to make any money."

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