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Digital Life

Forget Bitcoin, Amazon Wants You To Use Its Coins

Forget Bitcoin, Amazon Wants You To Use Its Coins
February 19, 2014 12:06PM

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It’s interesting that Amazon is making its Coins available on Android devices while Microsoft is abandoning its virtual currency method for dollars in the Xbox realm. Artificial currency like Amazon Coins is something users often struggle with because you can typically only use it inside the vendor. It’s not like real money, said analyst Rob Enderle.

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While Bitcoin remains a controversial digital currency system, Amazon is forging ahead with coins of its own for Android phones and tablets. The e-commerce giant just announced that customers in the U.S., U.K. and Germany can now buy, spend and early Amazon Coins on the Android platform.

Until now, Android Coins were only available for use with Kindle Fire Tablets. By opening them up to more devices, consumers can use the digital currency to buy the latest apps, like Ridiculous Fishing, purchase extra lives within Candy Crush, or unlock Red's amazing Super Roaster in Angry Birds GO directly from their Android devices.

"Since the launch of Amazon Coins, we've been amazed by the number of customers using Coins, as well as how many Coins they're spending on apps and games," said Mike George, vice president, Amazon Appstore and Games. "Because customers can earn Coins when they buy apps in Amazon's Appstore, and because they can buy Coins themselves at up to a 10 percent discount, customers love the extra value they get when shopping in our Appstore."

Attracting Developers

Here’s how it works: Customers need to download the latest version of the Amazon Appstore and their existing Coin balances automatically appear. Customers can earn extra Amazon Coins by downloading specific apps or by reaching achievements within certain games.

At the other end of the app world, Amazon Appstore developers still earn their standard 70 percent revenue share when customers make purchases using Amazon Coins. By extending Amazon Coins to Android devices, the company is offering developers a more complete system for building, monetizing and marketing their apps and games.

Indeed, there’s a slew of options for developers, from in-app purchases to mobile ads and from A/B testing to analytics. The analytics, for example, provide usage metrics on daily and monthly active devices, sessions, retention, and in-app purchase revenue. When using this service, developers can assess how, for example, launch day is going or how a new feature might be affecting retention.

The Amazon Advantage

We caught up with Rob Enderle, principal analyst at The Enderle Group, to get his take on Amazon Coins going to Android. He told us it’s interesting that Amazon is making this move at the same time Microsoft is abandoning its virtual currency method for dollars in the Xbox realm.

“This artificial currency is something users often struggle with because you can typically only use it inside the vendor. It’s not like real money,” Enderle said. “You end up buying a lot of it in bulk and they don’t pay you interest. It’s like having a non-interest bearing bank account. It doesn’t depreciate but you are limited. Consumers haven’t traditionally been all that excited about in-service money. So we’ll see how it pulls.”

All that said, Enderle said Amazon Coins may fit the e-commerce giant’s purposes, though most consumers may just as soon pay with the familiar currency called cash. Amazon would love for consumers to adopt the Coins, he said, because it offers a measure of control.

“If you buy Coins you have to spend them with Amazon. It’s like if Target came in with Target bucks and gave you a 10 to 15 percent discount but you can only use the currency at Target,” Enderle said. “Retailers get more of your money but consumers lose flexibility because you can only shop at Target. Over time users have shied away from this type of mechanism, but you can see why Amazon would want customers to use it.”

Tell Us What You Think
Comment:

Name:

erik:

Posted: 2014-02-22 @ 9:39am PT
you can already shop amazon with bitcoin... no big news https://bitk.in/img/bitkin-screenshot-amazon.png

Q:

Posted: 2014-02-20 @ 2:14pm PT
Getting reward points is so ten minutes ago. Now you get coins instead. Yawn

Zyo:

Posted: 2014-02-20 @ 7:07am PT
Amazon coin is just a pre-paid card. Nothing more, you can't send them arbitrarily to someone else, it's not cryptographic, is not decentralized, it has NOTHING that Bitcoin has. A company having a balance is nothing new... even if they add the buzzword "coin".

Shortbus:

Posted: 2014-02-19 @ 9:35pm PT
It's a precurser to trade Amazoncoin for Bitcoin.



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