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Microsoft Points are dead (or may be soon) ... long live Amazon Coins

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May 20, 2013

Just as Microsoft is reportedly phasing out Microsoft Points, Amazon is launching a simila...

Just as Microsoft is reportedly phasing out Microsoft Points, Amazon is launching a similar virtual currency

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If you’ve ever owned an Xbox, you’re probably familiar with one of the most annoying payment systems known to humankind: Microsoft Points. They’re great for Microsoft’s bottom line, and nothing but a hassle for customers. Well, the folks at Redmond may finally be ready for change – as the dreaded points are reportedly on their way out. Yet, not far away – at that other Seattle-area tech company – Amazon just launched a similar payment scheme for its Kindle Fire ecosystem.

The impending death of Microsoft Points comes from The Verge, who cites “people familiar with Microsoft’s Xbox plans.” Supposedly the Points will be replaced by – gasp – traditional credit and debit cards, as well as iTunes-like gift cards. This can only be seen as a win for Xbox owners.

Amazon Coins

Amazon hopes Coins increases the flow of money into its Kindle Fire ecosystem (coins image...

So what is Amazon doing? Why, it’s launching its Coins virtual currency ... you know, the one we told you about back in February.

If you own a Kindle Fire, you’ve probably already gotten an email telling you about 500 Amazon Coins (a US$5 value) waiting for you in your account. That same email might also tell you that you can save 4 percent by buying Amazon coins in bulk. Can’t complain about free money, right?

Well, that depends. As it stands now, Amazon Coins are harmless. Because there are two key differences between it and Microsoft Points. First, each Amazon Coin is the exact equivalent of a US penny. Unlike Microsoft’s system, it’s simple to know how much bang you’re getting for your buck.

But the much more important difference is that Amazon Coins are optional. You can still pay for Kinde Fire content with a regular old credit card. It isn’t forced on anyone. So, even though it might lock some customers’ money into the Kindle Fire ecosystem, they're only putting it there out of pure choice.

Cause for concern?

The only concern is if either of those things change. There’s nothing stopping Amazon from eventually changing the value of Amazon Coins (the Terms & Conditions give Amazon the right to change its terms at any time). This could not only lead to Microsoft-esque confusion, it could actually lead to people losing money.

There’s also the possibility that Amazon could eventually require Kindle Fire customers to use Amazon Coins for all purchases.

But we’re going to give the customer-centric Amazon the benefit of the doubt here. As much as any company likes its platforms to be as "sticky" as possible, it’s hard to see Amazon’s brass seeing either of those potential moves as anything but hostile toward their loyal customers.

Let’s keep our fingers crossed that Jeff Bezos and company learned the right lessons from that other Washington state company.

Sources: Amazon, The Verge

About the Author
Will Shanklin Will Shanklin covers consumer technology for Gizmag. He's previously written for Android Central, Geek, GottaBeMobile, Android Police, and The Huffington Post.
He lives in New Mexico, U.S., with his lovely wife, Jessica.
  All articles by Will Shanklin
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1 Comment

I think the difference is that MS was playing the Sony game (the one Sony dropped after they got hacked) which is annoying and reminds most people of paying taxes. By contrast, Amazon is putting out a customer loyalty program, and has enough of an ecosystem available (millions or even billions of products all at reasonable value, vs maybe 10,000 MS products of which only a few hundred are a good value) that it makes sense for consumers, and allows Amazon to pass the reward of lower credit card charges on. Also, just due to the nature of the markets, I think it's a lot more likely parents would put $50 worth of amazon coins on a Fire than $50 of MS currency on an Xbox.

Charles Bosse
21st May, 2013 @ 12:16 pm PDT
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