What the Angry Birds Rio Exclusive on Amazon Android Store Means

Angry Birds developer Rovio is launching its follow-up game, Rio, for Android devices exclusively on the Amazon App Store (s amzn), giving Amazon’s new market a marquee title as it prepares to open for business. The game, which will roll-out in conjunction with a new 20th Century Fox (s nws) movie, marks the second time Rovio has launched an Android title first on a third-party market after offering Angry Birds on GetJar last year. Rovio, which just secured $42 million in funding, said it will also offer paid ad-free versions of Angry Birds and Angry Birds Seasons on Amazon App Store.

The launch of Angry Birds Rio, due out on March 22, is illuminating for a number of reasons:

It shows Amazon is serious about its Android App Store and has made sure it launches with a can’t-miss title. Few games are as popular as Angry Birds, which has been downloaded now 100 million times. There are still a number of questions surrounding Amazon’s Android app store, but grabbing an exclusive like this should be an easy way to introduce the store to millions of users, who will no doubt show up to get the next version of the game. It’s unclear if Amazon paid for the exclusive rights to Rio, and there’s no word how long the exclusive period lasts.

In the case of the Angry Birds launch on Android, GetJar, the independent store, was supposed to get a 24-hour exclusive launch window before the game appeared on Android Market. But crushing demand prompted Rovio to ask GetJar to open downloads on Android Market early. Still, GetJar saw a huge bump in visitors, with traffic up tenfold in that first day. That’s why this is a savvy move for Amazon. Even if it did pay for the rights, it will certainly be worth it for the amount of customers who will show up.

The launch also highlights the importance of third-party app stores. Developers are increasingly being confronted with app store options, which can be confusing. But with some big options like Amazon emerging, it gives developers new channels to sell apps. And it means that there’s a better chance their apps will be promoted beyond anything Google (s goog) does in Android Market. People already trust Amazon for online purchases, so opening an app store makes a lot of sense. Now developers will be able to tap into that experience to sell apps.

That Amazon struck a deal with Rovio suggests it will be very active in selling apps, perhaps even more so than Google, which is good news for developers. If Amazon gets this right, it could become a major player in the app market. It has some challenges, which I’ve noted before, including competition with Google. And, developers will need to get over the fact that Amazon will be able to set app prices. But if Amazon executes well, it will further underscore the growing clout of third-party app stores, which some are expecting will eventually overtake native app stores in downloads soon.

The move by Rovio also points out the fact that Google still has a ways to go in improving Android Market. Rovio hasn’t been shy about its problems with Android Market. After the launch on GetJar of Angry Birds, the company tweeted about its issues with overcoming fragmentation problems on Android. When it launched its own in-app payment system, company officials talked about their frustration with Android’s payment process. Rovio is launching paid versions on Amazon, when it has only offered free ad-supported versions on Android Market and GetJar, suggesting the company believes it can do a better job selling on Amazon than it can on Android Market.

Google has done a lot recently to improve the buying experience on Android Market, including a new web storefront and in-app purchase options, and it’s working on improving its carrier billing feature. But the challenge from Amazon really shows how much more Google has to do to improve its store experience. It’s now getting direct competition from a well-known retailer that will offer an easy billing option, great discovery and recommendations, established promotion channels and an app review process, which could be important for combating malware threats. If Google doesn’t up its game substantially, it will be left behind by a third-party app store, which is not only embarrassing, but could mean a big missed revenue opportunity.