Reflexive Arcade acquired by Amazon

http://www.reflexive.com/index.php?PAGE=Blog&BID=169

Explains why they've not just been moving the goalposts, but putting ruddy great steel doors on 'em. Some people claim this is a good move for casual developers. I'm not convinced. Never am when large companies start swallowing up smaller ones.

I've been at the cruddy end of company take-overs before, and its not very nice.

I'm a bit out of touch with portals, not having dealt with them in a couple of years, so I'm not really sure in what way they've been putting up doors or moving goalposts.

I don't know whether it's good or bad for casual developers. Probably good for bigger developers and bad for smaller ones, because Amazon tend not to want to deal with the small people. I would imagine it was the only way Reflexive were ever going to compete with the big boys though. They were never going to be able to compete with MSN, Yahoo, AOL, Oberon, BigFish and Real without major backing.

What do you expect them? Affiliate percentages to drop? A less open-door policy on game submissions that in the past? Developing more of their own games?

Well, for starters they banned all affiliates from hosting their own downloads a couple of months back, forcing them to instead, download directly from Reflexive and pay Reflexive for the bandwidth used in doing so. James C Smith was a bit 'cloak and dagger' about the reasoning behind this, but its quite apparent now.

They've now decided that all developers need to have a US Tax ID. This request manifested itself as a massive red banner in my developer account, saying that it will affect royalties if I don't (to the tune of 30% of royalties withheld).

They offered no help on what to do if you aren't in the US and therefore can't get a US Tax ID. It later transpired that non-US residents need to get an ITIN instead, but the accounts guy at reflexive claims he's "not an expert on international tax", and doesn't really know how this is done.

From what I've gleaned from him, and from James C Smith, it seems that we need to apply to the IRS in the US for an ITIN, and provide several documents to support the application...... no idea what these documents are but Reflexive first said I need a letter from them, which didn't arrive after two weeks, so I emailed again and the same guy who told me he'd send this letter, now says I "probably don't need it".

For tax purposes I gave a W-BEN8 form to Oberon and that's always been fine. So I'm not really sure why Reflexive are trying to get developers to do party tricks all of a sudden. I guess it wouldn't be such an issue if they could offer some reasonably solid advice on how to sort it, instead of passing the buck and changing their story.

They've already dropped the discount scheme (which I was building my new site around). I'd imagine that affiliate percentages falling is going to be a dead cert, as is a decline in developer percentages. Whether that will pan out on the basis that there might be more sales as a result, I don't know.

One thing's for sure - Amazon wouldn't buy a company if they weren't going to turn a profit from it. And that money's got to come from somewhere, and some of it is going to (I assume) come from the developer's pocket.

All the fuss over the ITIN number is certainly odd, in the past I've only ever needed to fill in a W-BEN8 form, same as you.

I hadn't heard anything about dropping the discount scheme or not permitting you to host your own downloads. Those are both disappointing developments, particularly because Reflexive were always one step ahead of the competition in these sort of areas.

Certainly it would be a shame if they lose all the things which made Reflexive a slightly more attractive prospect in so many ways, and just leverage Amazon's selling power to capture market share through brute force.

Oh joy!
.. now the portals look even less attractive ..

This is big news. I always found Reflexive to be friendly and helpful and to take a wide variety of games. I hope this doesn't change too much with Amazon acquiring them. It wouldn't make much sense to drop the affiliate percentage because other people offer 40% so they'd be losing clients. Also I wonder what impact this will have on BFG and Real as Amazon have huge marketing clout...

As for the ITIN, I applied for mine a while back because BFG needed it. I had to fill out a US form to apply for the number (W7 I think) and send off a notarised copy of my passport (my accountant notarised it). The first time the IRS refused because I didn't fill out the tax treaty article number correctly. The second time I waited months and nothing happened so I called them and they processed it on the phone.

When Oberon and Reflexive accepted a w8-BEN without an ITIN on it, it wasn't legally correct (although it was nice and easy to fill out the form without it). Clearly some accountant from Amazon is wishing to correct this anomaly ASAP. I got an email from Reflexive today saying I needed to submit a new form (because I never originally filled out the ITIN) so I've just sent them my BFG one which has the ITIN on it.

There are various assumptions here. For one thing, sometimes companies don't acquire something to turn a profit in that area but as a marketing exercise to boost a different area. Or they actually shut down the acquired company to remove competition (although in this case Amazon doesn't have a games division so there's no competition) But yes, I agree that generally acquiring is done to make a profit. Also the money doesn't have to come from the developer, especially if they want to keep developers coming to them. They could just use their marketing expertise and financial clout to make Reflexive a much bigger player and make their profit that way. It doesn't have to be bad for developers. Naturally I say this all with the caveat of "we'll see" ;-)

TurboSquid have been doing the same for 3D media sales, by the time a model sale goes through for a non-US resident only about 10% of the original price ends up in the hands of the artist and that's 6 months after the model is sold.

The US tax stuff is a real pain in the lower endian.

I'm just going to call the IRS in the morning and see what they say.

If I'm not getting any joy from Reflexive, might as well get the info straight from the horse's mouth.

My passport expired a couple of months back so I'm hoping I can use my driving licence or something for ID.

Personally, I hope that it will not be the first buyout in a series, as it happened with payment processing companies a while ago when all but two companies were swallowed up by Digital River.


The 30% withheld is the standard tax paid by foerign people which have business in the USA but which don't are part of a country with treaty benefits. Of course if you don't have an ITIN they can't check the benefits. However, legally speaking AFAIK even if Reflexive or BFG didn't check taxes, you should still have done it on your own, so it's not bad practices (and maybe they are obligated to do so as a USA based company).


You can use any kind of ID document, as long as it is in english language. However, if obviously you don't wish to send the original, you must authenticate the copy with an american notary (you should check with the local embassy, but it's cheap).

I just spoke to a Russian who got an EIN instead for his company (the ITIN is for individuals). He phoned and it took 15 mins to get it. Try that out if you have a company. Otherwise you need to take the long route.

Here's what the W7 says about ID:



Phew. Also I didn't get my passport notarised at a US Embassy I used my accountant (a laywer would probably also do). The form says:



Note the last sentence.

OK that's my legal council done for the day...

I need an ITIN, not an EIN. I guess I'd need to send them my birth certificate and driving licence.

Do they accept copies of documents or have I got to send original ones? I don't like sending original documents because it costs me money to replace them if they get lost, plus it rules out using a fax.

You can send either a) originals (risky) or b) notarised copies. Don't think you can fax it anyway, you have to post it as they want an ORIGINAL signed copy of the form.

Hey, true, I didn't notice it on the W7 since I thought that submitting the passport was the easier route.


Read my post above! :)

To take an appointment, check 'notarials' or 'notarial services' from the local embassy: http://www.usembassy.gov/

For the UK: http://london.usembassy.gov/cons_new/acs/scs/notary.html

Is there a british portal thingy? - so that this paperwork can be
avoided? - not to mention getting taxed twice.. im guessing all the big
names are american..

actually..why do i care - i dont have anything to sell ;) - feel free to
flame me to death..

Seems like a gap in the market. There is a French one called Boonty and probably other European ones. But yeah all the big ones are American.

I had issues getting my ITIN too.

I filled in it and sent it off with an Australian Notarised copy of my passport, the letter from BFG etc...

After 2 months the US tax office sent me a letter saying they could not accept the copy of my passport because it needed an apostle with it.

So I talked to the lawyers and they gave me another nortarised copy and also stamped it. I then looked up about this apostle thing, and what they gave me wasnt an apostle!

I ended up sending them my original passport and hoped for the best... another 2 months I got my ITIN and my passport back!

But still waiting on the money from BFG...

More thoughts on this:

http://greyaliengames.com/blog/reflexive-arcade-is-acquired-by-amazoncom/

I hope mine doesn't take that long. o.O

I can send everything to the US Embassy in London, I think, which should speed it up a bit?

Interesting, I'm not sure if this is good or bad. Hopefully, they'll let Reflexive do what they've always done best.

I forgot that there is an US Embassy in the UK, so it should be a lot quicker!

I had to send it to Texas USA. Australia Post says it could take between 7-10 days, and knowing Oz Post its at least 10..

10 days there, processing and 10 days back...

So the 2 months was actually quick once I sent them my passport!

Flaming Nora!

Got a reply from the US Embassy this morning. They need evidence from Reflexive of any royalties paid/due. This is despite Reflexive telling me last week "they probably don't need it".

Well they did need it! :/

At least I got my driving licence and birth certificate back, but I now have 28 days to get them the aforementioned from Reflexive, otherwise I need to send my original proof of ID again.

Question for you non USA'ers... couldn't you just find someone in the states to act as your agent or middle man and have your publisher send the cash to them and they send the cash to you?

You can but you'd still need to fill in the same forms, so you'd essentially be doing exactly the same, but giving a cut of your profits to a middle man as well.