>When Amazon Coins launches in May, we will give out tens of millions of dollars in Amazon Coins to customers to spend on Kindle Fire apps, games, or in-app items.
For a split second I thought, "is this a new way for Amazon to spend their free cash flow to the point where their profits approach zero?" but then I realized that this is only for digital purchases so they aren't actually spending money per se and the hit to their actual top line will be a small fraction of the total giveaway (esp. since these coins can't be used on kindle books it seems)
If a consumer purchases something then wouldn't Amazon be losing 70% of that as they have to pay the developer of the app the consumer made the purchase on/for?
given their history with paying developers that are the app of the day on their store[1], I can see them finding a loophole to avoid paying devs who collect payments with coins.
This is sort of a very different situation - whether or not you agree that their offer to be featured as the free app of the day is valuable, they were upfront that the rev-share in that situation is 0% when they make the offer.
In this situation they are claiming that it's exactly the same as cash to developers - that is, you will receive 70% of the purchase price. I have absolutely no reason to believe that they're attempting to mislead or be dishonest.
Yes, but 1) not every coin is likely to actually get redeemed, and 2) the total loss they incur is more or less a controlled marketing investment in order to jump-start user familiarity with the coin program anyway.
For a split second I thought, "is this a new way for Amazon to spend their free cash flow to the point where their profits approach zero?" but then I realized that this is only for digital purchases so they aren't actually spending money per se and the hit to their actual top line will be a small fraction of the total giveaway (esp. since these coins can't be used on kindle books it seems)