The coins will be usable in lieu of cash - well. credit cards to be exact - for the purchase of Kindle Fire Apps and games. To launch the initiative Amazon are planning on giving away tens of millions of dollars worth of coins when they launch in May.
They haven't released any details yet in how the coins will be distributed, or how many any individual is likely to get hold of, but they have indicated that any developers who have their products bought using Amazon Coins they will still receive the same level of royalty payment, currently 70%.
Why are Amazon doing this? Well, I guess they want to boost the attractiveness of the Kindle Fire as an App and game device. Apple have played a long game, even by Amazon's standards, given that in general Amazon is the king of the long game. Consequently, Apple have a strongly entrenched and mature App store. They're followed by a fair margin by Google's Play store, available for many Android devices. In third place, by a long margin, sits Amazon's App Store, hindered by their refusal to tie up with Google - they've taken Android, skinned it to within an inch of its life for the Fire, and pointed buyers at their own offerings.
Now there's no doubt that Amazon hold the upper hand with eBooks and print books; they probably hold one of the better hands with virtually all things consumer to be fair, but they aren't winning the App and Game competition.
So, when offered a choice of losing or moving, Amazon move in the direction that usually works for them - they incentivise, or bribe. It wouldn't surprise me if, when the fine details come out on this, that the price for developers to cash in on this very generous offer that they will have to agree to exclusivity, because one thing Amazon isn't good at is sharing - see my rants and views on KDP Select for an unbalanced view on that topic.
If you're a developer then you may want to look into the new Amazon Coins program - if they're prepared to throw tens of millions of dollars at it then you may as well get your hat ready to catch some. Just make sure you don't end up cutting ties with existing friends in the process.
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