In-app purchases are a huge source of income for app developers, allowing them to remove some of the initial hesitance users might have in dropping a few bucks on an app, and instead letting them make their money bit-by-bit, as users pay a little here and there to unlock new features or add functionality. Today Amazon announced a new way for Kindle Fire users to make such purchases, with plans for the launch of its Amazon Coins virtual currency. The Coins will arrive this May, but we’re left asking ourselves, what’s the point of all this?
Amazon promotes these Coins as an easy way to both buy apps outright and make in-app purchases, but it’s not like you can’t already do these things – Amazon announced in-app purchases for Appstore apps last April, already fully integrated with Amazon’s 1-Click payment system.
Developers will get the same 70% cut of profits with Amazon Coins as they already do now from regular payments, so they don’t appear to have much to gain from this new payment system. Consumers actually seem like they could end up on the losing end of this arrangement, especially if they convert real money to Amazon Coins in advance, and have all these funds sitting in their Amazon account rather than in the bank, earning interest.
The one benefit we can see is that Amazon intends to launch Amazon Coins by giving away tens of millions of dollars’ worth of the currency, so you might be able to score some free apps at first, but in the long run this might not be to anyone’s benefit but Amazon’s.