Amazon sells its line of Kindle Fire tablets (roughly) at cost, betting that each owner will buy enough books, music, movies, and apps to make a tidy profit. With digital spending playing such a huge role for the online retailer, Amazon wants to make it as easy as possible for you to throw down for that new Angry Birds game. Jeff Bezos and company have a new approach to driving the post-purchase Kindle Fire economy: virtual coins.
You might cringe at the mention of virtual currency. At best, it allows customers without credit cards to make digital purchases. At worst, it’s an annoying scheme to make you pay more than you would with a direct purchase (I’m talking to you, Xbox Points).
Fortunately, Amazon is taking a more customer-friendly approach with its Amazon Coins. Customers can still pay with a credit card; the virtual coins are just another option.
The company is framing the move as a boon for developers. When Amazon coins launch in May, the retailer will give away “tens of millions of dollars worth of coins” to Fire owners. Devs will get their standard 70 percent cut of all coin-based purchases, with any apps approved before April 25 eligible for the spending bonanza.
From a business perspective, it’s a way to bolster Amazon’s Appstore economy. That “tens of millions of dollars” investment gets Fire owners in the habit of buying new apps and making new in-app purchases. This fits with Amazon’s overarching strategy of sacrificing some short-term profit for a long-term customer base.
As long as Amazon doesn’t eventually replace credit card buying with its Coins, it’s hard to see how this hurts anyone. Amazon increases its Appstore's stickiness, developers make a few extra bucks, and Fire owners get some free stuff.