Amazon’s Virtual Currency Hopes to Spark Actual Profit

Amazon Coins

[Photo Credit: TechnoBuffalo]

Amazon has been aiming its sights at Apple since the introduction of its Kindle Fire and Kindle Fire HD. Jeff Bezos’s Internet company has gone head-to-head with Apple, Cupertino suing Amazon for the use of the phrase “App Store” for its Internet store nomenclature. Now, Amazon is fighting back against Apple again – this time, the Internet company has created its own “virtual currency” in hopes of sparking actual profits.

It seems to be a dream, the idea that virtual currency has real-time significance. If it’s “virtual,” then to use it in the real world is a contradiction, right? Interestingly enough, the idea has caught on that items in the virtual world can be used in the real world. If a person marries in the virtual world, he or she can sue for virtual items in the real world. There have been legal cases in which a “virtual” wife was able to sue for a dog and home in the real world that existed in the Internet realm. As someone who frequents Google’s Play Store and Apple’s App Store on a regular basis, I can attest to the virtual currency that Apple gives its App Store customers each day. In the game “Crime City,” iOS users are allowed to scratch a ticket to win a prize each day. Some days, you may win a “ballistic vest,” other days a car or rifle, a pair of boots, a helmet, etc. Some days, however, you may be fortunate enough to win $100,000 or a set amount of gold. The gold is virtual, but it buys you weapons and money within the game. When you run out of gold and cash, you can then spend more money to purchase more cash, gold, weapons and armor. Freemium apps are already employing the concept of virtual currency in hopes of motivating users to spend real-time cash.

These virtual coins will be called “Amazon Coins,” and Amazon will give away “tens of millions of dollars’ worth” of its coins to Amazon account holders to spend in the Amazon App Store for games and other applications. Along with this new Amazon Coin offer, the company wants to add game and application developers to its list, granting the deadline of April 25, 2013 for any games that developers want to add to the Amazon Store as part of the Amazon Coins program.

Imangi Studios CEO Keith Shepherd says that Amazon’s App Store gains a high percentage of revenue than on Android’s OS: “we’ve already found that the average revenue per user on Amazon is higher than other Android platforms. We’re very excited about the monetization opportunity with Amazon’s virtual currency” (Kevin Krause, Amazon Announces Virtual Currency for Use With Kindle Fire, Appstore).

Amazon is to be applauded for its policy with regard to virtual coins. It is Amazon’s hope that if they provide virtual currency to their users, they will return the favor by spending real-time cash. You cannot create a return on an investment without investing first; in the same way, you cannot create a spending atmosphere of actual money without investing virtual currency.

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