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To encourage more user activity and spending, Amazon announced Wednesday that it would be introducing a virtual currency called Amazon Coins.
Kindle Fire users can expect some free coins this May, as Amazon gives
away tens of millions of dollars worth of the coins during the launch of
the currency. With these coins, you will be able to purchase apps,
games, and in-app items. Amazon is in hopes that these coins will entice
users to try out new apps, be pleased with their purchases and in turn
generate more revenue through Kindle Fire.
The Amazon Currency Value
The coins will have a value of 1 US cent. In other words, to purchase
an app worth $1.99, you will need 199 Amazon coins. The revenue from
the coins will be shared in a 70-30 split between Amazon and the
developers, Amazon receiving 30 percent and the developers being paid 70
percent.
The app developers who already offer merchandise in the Amazon
Appstore are all set up and ready to go with the new coins. However, new
developers who want in on this opportunity must submit their apps by
April 25th.
Benefits of the virtual coins
Amazon is hopeful that the coins
will prove as profitable as the virtual Facebook currency. However,
Facebook does seem more suited to a currency than Amazon because of
their vast selection of games, which is where most of Facebook users
spend their time and money. But, Amazon is positive that this marketing
ploy will become an asset to its developers.
When a company mints their own virtual money, buyers are naturally
drawn to the offer. After all, most people are more comfortable
purchasing with virtual coins, than real ones. And similar to the credit
card effect, shoppers tend to spend more when not using cash.
While Facebook has been very successful with their currency, this is
not true for all companies who have tried this strategy. Only time will
tell if this idea will be beneficial for Amazon and Kindle, as well.
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