appcfg.py doesn't work- opens source code in sublime

I am trying to update (deploy) a simple hello world python app to the google app engine. I have created the account through GAE, and the hello world program works via the local host. when I type

appcfg.py update [path-to-helloworld-folder]

it just opens up the source code in sublime text.

If I try to deploy the program via the GAE launcher, it directs me to sign in in chrome, but then it just displays the "hello world" on the webpage without actually updating anything.