Amazon’s Kindle Fire tablets are among the cheapest decent tablets you can buy. That’s because Amazon sells the devices for about what it costs to make them, and hopes to make money by selling books, music, movies, and apps — and by locking customers into the Amazon ecosystem.
Starting in May, Amazon will have a new way to do that: by offering Amazon Coins.
Amazon Coins are a virtual currency that you’ll be able to use to buy apps, games, and in-app items.
Customers will be able to buy Amazon Coins for a penny each: so if you buy 500 Amazon Coins, you’ve got $5.00 to spend on content in the Amazon Appstore. You’ll be able to choose Amazon Coins, a credit card, or other payment method on checkout.
There are a few advantages to this approach. First, it allows parents, for instance, to buy a limited number of coins for kids to use while making sure they don’t keep adding charges to your credit card.
Second, it makes it easier to offer promotions: Amazon says it will be “giving out tens of millions of dollars worth of Coins” when the new virtual currency launches in May.
Of course, there’s also an advantage for Amazon: Once you purchase coins, they can only be used to buy content from Amazon. It’s sort of like the tokens that you used to buy at video game arcades: Sure, each one might cost a quarter, but if you traded in a pocket-full of quarters for tokens at the start of your visit, you’d already given your money to the arcade. There was no point taking those tokens home with you, because you couldn’t spend them on candy or comic books anyway.