Friday 8 February 2013

Amazon Coins It In

On Tuesday, Amazon announced the impending launch of Amazon Coins, their own virtual currency for apps and in-app purchases on their Kindle Fire. Everybody’s talking about it; it’s almost like a proper news story, not just another e-money-related announcement.

It’s being presented to app developers as “another opportunity to drive traffic, downloads, and increase monetization”, with no integration required – and they’ll get paid the same 70% revenue share whether the customer chooses to use Coins or their own money. Irresistible.

In a dramatic display of aggressive (virtual) monetary expansion, Amazon will be giving away “tens of millions of dollars” worth of Coins when they’re launched in the US in May, each Coin being worth one cent. Theoretically, this will increase the consumption of Kindle Fire content which will, in turn, stimulate investment into said content by the aforementioned third-party developers. Long-term, this will have the effect of strengthening the Kindle Fire platform, helping it compete against Apple and Google. Nice.

However, what’s so far unclear is what happens when Kindle Fire customers have spent their free “money”. There will have to be a way to get Coins back into the virtual economy, and the only possible options will be to buy them (which’ll be great for Amazon by making the acceptance of micro-purchases cheaper and easier to manage), or “earn” them by doing really, really, really well in Angry Birds. For example.

It might well be the case that those in-app coins in Temple Run (that you can never seem to get enough of because you’re genuinely a little bit scared of being caught by the flesh-eating demon monkeys chasing you, and end up ignoring them in favour of avoiding having your head taken off by a poorly-placed tree), might turn out to be really worth something, if they can be used to buy Amazon Coins. Well, worth something in the Kindle Fire ecosystem, anyway.

Where it will get interesting is if and when Amazon releases their Coins from the confines of the Kindle Fire environment and accepts them as currency in the wider Amazon ecosystem, allowing customers to buy physical goods with them. And Amazon pretty much sells everything these days, so will we soon find kids spending all their waking hours on Kindle Fire games, sucking up those in-app rewards and converting them to Amazon Coins – and then spending them on whatever they like on If that’s the case, then in effect almost every ten year old with access to a Kindle Fire will soon be pulling in more than I do each month. But I’ll be having the last laugh, because at least I won’t have RSI, and I’ll be able to leave the house without my mum and spend my hard-earned in HMV if I want.

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