retail news in context, analysis with attitude

Bloomberg reports that Amazon, looking to get application developers to create more programs that can be used on the Kindle Fire tablet computer, plans to introduce virtual currency, dubbed Amazon Coins, that consumers will be able to earn and then use them to buy items on the tablet. Developers will get the standard 70 percent revenue share from purchases made with the coins, which will eventually be available for purchase on Amazon.com.

Developers will continue to get the 70 percent revenue share from purchases made with the coins. After the coin giveaway ends, customers will be able to buy the tokens using Amazon accounts, the company said.

"Amazon Coins is an easy way for Kindle Fire customers to spend money in the Amazon Appstore, offering app and game developers another substantial opportunity to drive traffic, downloads and increase monetization," the company said in an announcement.

Analysts quoted in the story seem to be mixed in their reaction to the move. Some think it could be a good way to light a fire under both app developers and Fire users, while others think that it won't drive growth in any significant way.
KC's View:
What I think the criticism misses is that companies like Amazon should do everything possible to lock people into their systems. That seems to have worked for Amazon when it comes to things like its Prime service, as well as Subscribe & Save ... once you are part of the system, using Amazon becomes your default position in a lot of ways. That's what Apple has done, in its own way ... there's nothing like having the seamless integration of a Mac laptop, iPod, iPad and iPhone. It creates virtual boundaries beyond which a lot of folks (I would include myself in this group) are less likely to venture.

I think, in essence, that is part of the thinking behind the Amazon Coins. Usage will generate Coins, which will generate usage, and so on...