E-commerce leviathan Amazon today is taking a step into social gaming: Amazon Coins, its new virtual currency, is now live in the U.S. To kick it off, Amazon announced that it would put $5 worth of the currency — equivalent to 500 Coins — into all Kindle Fire users’ accounts to use on apps and in-app purchases on its platform. The company says that this is equivalent to “tens of millions of dollars” worth of Amazon Coins.
Coins, which were first announced in February, are the company’s move into an area that has been a strong way for app publishers to generate revenue through their apps. In that sense, the launch serves a two-fold purpose for Amazon: a way of encouraging developers to come to its platform (something Amazon has already been working on), and to spur more revenue generation.
A lot of the talk in virtual currency of late has been around the potential for bitcoin and other new monetary instruments fuelled by a network effect. But before bitcoin became the buzz, there were already a number of other virtual currency networks run by Facebook, Zynga and many more, with aim being to spend the “money” on gaming and other apps on their platforms.
Unlike bitcoin, and more like Amazon Coins, most virtual currency is based on users redeeming standard currencies for “virtual” ones on the network in question. This money can then be used to buy new features in a game, or extend your life, or to send “virtual gifts” to friends. One idea here, I think, is that users are more likely to spend money when it’s less transparent that they are doing so; in Amazon’s case, 500 Coins sounds a lot more exciting than $5. Another is that it ties a user more closely in with a particular game and a particular platform. Amazon Coins will give Amazon a way of more reliably monetizing users longer-term.
Amazon Coins is an extension of other social services that Amazon has added to its app platform. Specifically, Game Connect lets developers list virtual goods for sale on Amazon.com — a way of also marketing those games themselves; and GameCircle is a kind of social network that lets users measure their achievements in games against their friends and other players. On top of that, Amazon also allos for in-app purchases using real-world money as well.
Amazon says that it will be offering discounts of 10% to those users who buy Coins in bulk. Developers will get a standard 70% revenue share on all coin spend.
This looks like it is just the beginning of Amazon Coins, which the company says will extend to other services on the platform — and likely outside of the U.S. over time, given that virtual currency has proven popular outside of the U.S. in markets like Asia and Europe.
“Today we are giving Kindle Fire owners $5 worth of Coins to spend on new apps and games, or to purchase in-app items, such as recipes in iCookbook, song collections in SongPop or mighty falcon bundles in Angry Birds Star Wars. And with discounts of up to 10% when you buy Coins, this is a great way for customers to save money when they buy apps, games and in-app items,” said Mike George, Vice President of Apps and Games at Amazon, in a statement. “We will continue to add more ways to earn and spend Coins on a wider range of content and activities—today is Day One for Coins.”
Whether that will ever include making purchases on Amazon.com with Amazon Coins remains to be seen — but it seems that in any case Amazon Coins will be one more way that Amazon will build out its e-commerce empire ever further.
Messaging app Line, which recently announced it has passed 150 million users, has withdrawn a function from its iOS app that allowed users to gift paid-for stickers to each other by paying for them with a virtual currency. The change, spotted earlier by The Next Web, was explained by the company in a blog post today, in which it wrote: “As of 15:00 today, May 10, 2013, we regret to announce that we will be withdrawing the function to send purchased stickers as gifts to friends on the iPhone version of LINE.”
Line did not go into detail as to why it is withdrawing the paid-for gifting function, saying only that Apple asked it to remove this feature. It is also removing purchases of the virtual currency used for sticker gifting. The change only affects Line’s iOS app. Users can still buy stickers for their own use, or gift free stickers.
Line said:
We received a request directly from Apple who operates the AppStore, that this sticker gifting function will have to be withdrawn from the app, and we do apologize for the disappointment this may cause to all of you who are having fun sending stickers as gifts to your friends.
The problem with Line’s process here appears to be that it was bypassing Apple’s in-app payment rules — i.e. circumventing the sanctioned in-app payment process via use of a virtual currency. That’s a pretty clear no-no, although some other apps, such as Skype or Spotify, get round this issue by allowing users to buy services outside the app and then make use of their credits within the app.
It’s unclear whether Line allowed users to buy virtual currency via its web platform and then redeem those credits in-app, which may be one workaround. Another would be for Line to let users gift stickers by making direct in-app payments — which would not cut Apple out of the transaction.
We’ve reached out to Line with questions and will update this story with any response. Line noted on its blog that free sticker gifting can continue within the iOS app, and Line users are also able to buy stickers for their own use (via an in-app purchase) — so it’s clearly the virtual currency that’s the culprit here. Line added that iPhone users will still be able to receive stickers gifted to them by Android users. Any iOS app users with remaining Line coins will be able to gift stickers to use them up.
Line, which is now operated by Line Corporation, after a corporate name change last month, reported its first set of financial results earlier this week, announcing some $58.9 million in revenues for its Q1 – around 30% of which, or some $17.67 million, came from sticker purchases. The majority of Line’s revenues (around 50%) come from game in-app purchases.
Line does not break out its sticker revenues further so it’s unclear how large an impact the iOS change will have. However if paid-for sticker gifting is a significant revenue stream the company could deploy an alternative payment mechanism to keep offering the feature on iOS.
Update: A Line spokesperson told TechCrunch the company has no plans to reinstate sticker gifting using in-app purchasing as the payment mechanism, which suggests the feature wasn’t hugely important to it from a revenue-generating point of view.
I’m pretty much out of superlatives when writing about Dylan Collins’ latest venture.
Box of Awesome, which we previously described as a “free Birchbox for kids“, has acquired Swapit, the site that lets kids and teens trade unwanted items for stuff they do want and operates an accompanying ad network with a reach of 7.3 million. And with it comes a change of name. The newly formed company, which Collins says is now the leading kids and teens discovery platform in the UK, is to be called SuperAwesome.
That’s right, just when you think it can’t get any more ____________ [INSERT SUPERLATIVE].
The terms of the deal remains undisclosed, though I understand it was for stock not cash and that Swapit’s 9 person team will be joining the newly-formed company, including Tom Impallomeni as COO and Lee Veitch as VP Sales.
Box of Awesome launched back in February as a way to solve the discovery problem faced by physical and digital products targeting the 8-14 year-old kids market. It consists of a bi-monthly box delivered in the post to subscribers, stuffed full of games, music, books and other kid-friendly stuff. The draw for brands who pay for space in each Box of Awesome is the opportunity to be discovered by influencers in that hard to reach demographic — and to get valuable feedback from the mandatory surveys the kids take if they want to receive the next box.
The following month, the UK startup launched a version targeting girls, cleverly named OMG!, and there’s also a digital-only version to keep kids happy while they sit it out on the waiting list.
Meanwhile, Swapit has been around for a lot longer. Founded in 2001, it has three legs to its business. First is the online swapping and trading community for kids and teenagers. On the site, members earn virtual currency called “swapits” for every item they trade in, which they then use to bid on items they do want. But here’s the clincher: They can also earn “swapits” from leading brands and organisations for various activities. This includes mini-games, competitions and taking surveys. Swapits can also be used to bid on brand-promoted items. All of which makes sense from a SuperAwesome point of view.
In addition, Swapit operates an extensive ad network targeting kids, and has a research arm, too. Both also of value to the “kids discovery” proposition offered by the new company.
“Our vision is to create the next generation discovery platform for the kids and teens market,” says Collins in an email. “This generation of kids is enormously disruptive: they exist on multiple platforms and locations. And this maps exactly to how we’re building our company. As well as being experts in understanding kids and teens, Swapit has always shared this hybrid view which is why we realised there was a genuine match here.”
Collins also reckons that by combining forces, SuperAwesome has a reach of about 65% of the UK kids/teens market.
In a statement, Tom Impallomeni, CEO of Swapit, adds: “With SuperAwesome we’ve created the biggest kids and teens discovery platform in the UK which is safe, compliant and effective. I think our awesome customers, who include the likes of Warner Bros, Topps, Activision and Random House (amongst many others) are testament to this. For many brands, we are already a required part of their marketing mix.”
PromiseUp, a new iOS app that sees its full launch today, has a simple but rather lofty mission: To make people keep their promises, and ultimately, make the world a better place. It hopes to achieve this with a mixture of social and gamification in which users earn (or lose) virtual currency depending on whether or not they keep the promises they make to one another.
The app starts with the presumption that by making us more accountable for the things we say we’ll do, including when, we’re far more likely to follow through on those intentions. It does this by making each promise — to a friend, family member, or even to yourself — easily trackable, and by rewarding users for the tasks they complete.
As a new user you’re given 1,000 UP dollars (PromiseUP’s virtual currency) which you use to wager against the promises you make. Each time you make a promise to another user, or to yourself, you state what it is you intend to do and when the promise will be completed. Then you attach an amount you’re willing to wager — in UP dollars — which you win if you fulfil the promise on time or lose if you renege.
In PromiseUP’s beta testing, the range of promises made include a son promising to call his mother once a day for a month, a wannabe athlete promising themselves that they’ll run 3 miles a day every day for a week, and a user promising to eat lunch using only their feet. In these examples alone it’s easy to see how the app potentially competes with affirmation-based health and fitness apps that let you publicly record and track your goals, or a goal setting app like 43things. At the more frivolous end of the spectrum, it also reminds me of something like Klash, where you challenge and dare your friends to do things just for the fun of it.
Of course, there’s little point in winning UP dollars if they have no value. Aside from sheer point scoring, the virtual currency can be traded in for real prizes via the app’s UP-Shop. In addition, when users run out of UP dollars because of all those broken (or kept) promises, they can purchase more using real money — the basis of the Russian startup’s business model.
And as opportunistic as that sounds, it was enough to get PromiseUP’s backers excited. The company raised a $210,000 seed round from TDVF Investments in May 2012.
Lastly, I’ll leave you with the video below. In it you’ll see founder Ivan Kochetov pitch PromiseUP at TechCrunch Moscow last December where he promised the audience that the company would raise an additional $5 million by 20th April 2013. Unless he knows something we don’t know, that’s at least one promise that has yet to be kept. Maybe there is a need for an app like promiseUP after all.
Another day, another Bitcoin-related investment, and further affirmation that VCs are hungry to invest in the ecosystem surrounding the decentralized digital currency. Today, OpenCoin, better known as the developer of open source payment protocol, Ripple, announced that it has raised an undisclosed angel round from Andreessen Horowitz, FF Angel, Lightspeed Venture Parnters, Vast Ventures and Bitcoin Opporunity Fund, SecondMarket founder Barry Silbert’s investment vehicle for Bitcoin-related startups and companies.
OpenCoin will use its new capital to expand the open-source code behind Ripple, which, for those unfamiliar, is a virtual currency and payment system that aims to make it easy and affordable for anyone to trade any amount in any currency. Headed by financial services veterans like CEO Chris Larsen, who is also the founder of P2P lending giant Prosper, OpenCoin is on a mission to create a new kind of global currency.
Some would say that makes OpenCoin the equivalent of a “Bitcoin copycat”, due to its being a distributed, open source payments network with its own native virtual currency called “Ripples” (like bitcoins). But OpenCoin, for its part, is eager to avoid that moniker — and to avoid being mislabeled as the “next Bitcoin.”
In spite of (or because of) its growing popularity — and its becoming a billion-dollar market for the first time — Bitcoin has been subject to increasing volatility and security issues. Bitcoin transactions also have a tendency to take a long time to confirm.
OpenCoin wants to solve these problems by creating a unified ledger, which keeps track of every account, transaction and balance, which the system automatically pings to confirm the legitimacy of transaction, allowing them to clear in under a minute, the company says. By doing so, it hopes that it’s also created a system that can eliminate interchange fees and enable people to trade across borders with minimal cost and chargebacks, while solving some of Bitcoin’s security issues.
The company claims that Ripple can accommodate any currency, including dollars, yen, euros, and even bitcoins, making it one of the first distributed currency exchanges. Until now, a few Ripples have been in circulation, but the company will begin releasing a huge chunk of its currency (with plans to distribute 50 billion Ripples) beginning in May, with plans to put 100 billion coins into circulation over the long-term, the company tells us.
The news follows OpenCoin’s acqui-hire of SimpleHoney, a startup making a “wish list shopping app,” to help it popularize virtual currencies and make Bitcoin easier for Average Joes to use and convert, for example. The move comes as OpenCoin looks to expand the ecosystem of tools around its exchange service, which now allows users to send and receive payments, monitor balances, convert ripples into other currencies, and so on.
While many believe that the odds are stacked against Bitcoin and that it may just be a passing fad (or at least a bubble), perspectives that could very well be applied to OpenCoin and Ripple, there’s plenty working in its favor, too. The fact that Ripple was developed by hackers like Jed McCaleb, who were instrumental in the early development of Bitcoin (McCaleb is the founder of one of the largest Bitcoin exchanges, Mt. Gox), gives it plenty of early cred in the virtual currency world.
OpenCoin believes that it is facilitating the evolution of Bitcoin, and by creating a multi-currency, security-focused exchange, it can have a better shot at selling the concept of a distributed, global virtual currency to the mainstream.
