February 5, 2013
Amazon’s New Virtual Currency Not About Small Change
Peter Suciu for redOrbit.com — Your Universe Online
Amazon.com became an online retailing behemoth built upon its customers spending real money on the goods and services it offers. But soon it will launch its own virtual currency. Amazon Coins are being introduced as a new form of tender for purchasing apps, games and even in-app items via the Kindle Fire. On Tuesday, Amazon officially announced this new virtual currency will debut in May.The Amazon Coins, which won´t actually be minted of course, are being touted as a way to make it easier for Kindle Fire customers to spend money in the Amazon Appstore, while also offering app and game developers another opportunity to drive traffic, downloads and increase monetization.
To ensure there is actually confidence in the currency, Amazon will give tens of millions of dollars´ worth of “free” Amazon Coins that can then be spent Kindle Fire apps.
App developers won´t have to worry about giving their wares away for free, however. In fact, developers really won´t have to do much to take advantage of this new currency; those in the Appstore will get paid as usual — and in real money. Those developers not yet in the Amazon Appstore will have to have their respective apps submitted and approved by April 25 to take part.
“Developers continue to report higher conversion rates on Amazon compared to other platforms,” said Paul Ryder, vice president of apps and games for Amazon, in a statement. “Now we have another new way to help developers reach even more of our millions of customers. Amazon Coins gives customers an easy way to spend money on developers´ apps on Kindle Fire in the Amazon Appstore–and we´re giving customers tens of millions of dollars in Amazon Coins to get started. Developers who aren´t yet in the Amazon Appstore will want to make sure their apps have been submitted and approved by April 25 so they´re ready for customers to start spending their Amazon Coins.”
This is just the latest of several recent announcements by Amazon intended to make the Appstore more appealing to developers, reports Venture Beat. Amazon´s recently announced Game Connect also enables customers to discover and purchase virtual items on Amazon.com and have these virtual items sent directly to linked game accounts.
And Amazon isn't alone in trying to invent its own currency or create a virtual economy. Numerous online games have utilized virtual currency for the purposes of buying in-game items, which in turn has created robust economies. In some cases, these have created demand where gamers have paid real-world money to buy either in-game items, or paid for in-game currency to buy those items.
Last year, the social media giant Facebook also made a bold move with its own virtual currency “credits,” which the company looked to make a real currency. The credits first debuted in 2008 when the social network changed the monetary units for “gifts” from U.S. dollars into “credits.” Throughout 2009 and 2010 Facebook created a way for these credits to be used on hundreds of games and apps available on Facebook, including Farmville, and even spent at select retailers such as Target.
It seems Amazon could be following a similar path and, at present, has many developers excited as well.
“We've been extremely pleased with how well our games monetize on Amazon,” said Michael Grobe, Chief Financial Officer of GameCircus in the company's statement. “We're very excited about the launch of Amazon's new virtual currency.”