Amazon rolls out Coins virtual currency via Kindle Fire giveaway


Amazon (NASDAQ:AMZN) launched Coins, a new virtual currency designed to drive purchases from its Appstore for Android.

Amazon Coins

Each Amazon Coin is worth 1 cent.

"If you own a Kindle Fire, you'll find a little unexpected something in your account right now--500 Amazon Coins, worth $5," writes Amazon founder and CEO Jeff Bezos in a letter posted on the Amazon homepage. "You can use the coins to buy apps and games, as well as items inside apps and games."

Each Amazon Coin is valued at 1 cent. U.S. Amazon account holders can purchase 500 additional Coins for $4.80, a 4 percent discount; Amazon also offers Coins in denominations of 1,000 ($9.50, a discount of 5 percent), 2,500 ($23.00, a discount of 8 percent), 5,000 ($45.00, a discount of 10 percent) and 10,000 ($90.00, also a discount of 10 percent).

In addition to discount purchases, Amazon Coins use case scenarios could include gifts from one Kindle Fire owner to another. Parents also could award children a Coins allowance to control their spending on apps and in-app purchases.

Amazon first announced Coins in February. The virtual currency co-exists alongside Appstore for Android credit card purchase options billed to the customer's Amazon account. Amazon Appstore developers will earn their standard 70 percent revenue share when customers make purchases using Amazon Coins, and Amazon will continue paying developers in dollars. At launch, Amazon Coin transactions are limited to the U.S. market.

Amazon Appstore for Android opened to U.S. consumers in March 2011. The store promises a user experience rooted in the company's e-commerce expertise, highlighted by a series of automated marketing features extending Amazon's signature product recommendation engine to mobile software merchandising and a Bestsellers section to further improve consumer discovery. Amazon has since expanded Appstore for Android to more than 200 international markets, stretching to the lucrative China market last week.

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