Will Kindle Users Bother with Amazon's Virtual Currency?
CREDIT: Shutterstock: Smit
Is virtual money easier to spend than real cash? Amazon thinks so and is preparing to launch "virtual coins" for Kindle Fire users.
To prime the system, Amazon says it will give customers tens of millions of dollars' worth of Amazon Coins to spend in its Appstore. (One Amazon coin will be worth a penny.)
Traditionally, PC gamers have taken to in-game virtual currency, such as the massive amounts of World of Warcraft "gold" that's spent every month on weapons, special potions and repairs. (While buying WoW gold with real money is against Blizzard's terms of service — gold must be earned within the game — it hasn't prevented a burgeoning black market for the stuff.)
And, Xbox gamers have had no choice but to buy points using a credit card that can then be used for items in the Xbox Live market. Microsoft offers several set amounts that often leave a player with a small balance that's not enough to buy anything else.
Other virtual currencies created for casual gamers and app purchases such as Facebook credits , have failed. Beginning July 2011, Facebook required all developers to use its credits for payment. If you weren't a Farmville fanatic, there weren't too many other places to use your credits, and about a year later Facebook discontinued the program. Facebook users who had accumulated credits found their balances turned to an equal amount of local currency. (In the U.S., 10 Facebook credits equaled $1.)
However, Flooz customers weren't so fortunate. Flooz was a digital currency launched in 1999 and promoted by Whoopi Goldberg. Flooz could be used at participating online stores, but failed to attract participants. Just two years later, the company collapsed and Flooz became worthless.
And Apple has never used its own digital currency for iTunes or the App Store . Similarly, Google Play, the store for Android apps and games takes credit, debit and gift cards.
While the Kindle store has plenty of games and apps, most are free. Aside from making it easier for parents to give their kids an allowance with Amazon coins for occasional in-game and app purchases, it's tough to see why people would take the trouble to purchase the coins when they could just buy an app or game credits with the payment card they've already registered with Amazon.
Can Amazon win with its golden coins? Odds are it can't — Kindle apps buyers bear more similarity to the Facebook crowd than WoW gamers — and why pay with two steps when you can opt for the convenience of one?