Virtual currency can be used to acquire virtual commodities that are sold by a variety of communities. The most popular are the social networking sites, virtual worlds, and other online gaming sites. This kind of purchase and sale of goods or services, whatever their nature, is gaining ground rapidly. You could be short of currency the is required to continue playing the game you are engrossed in on Facebook or for any other make believe online business transaction. You are prompted to acquire more currency and you do so without giving it a second thought, such is the compelling nature of addiction to games online.
It is not just goods or services, you could acquire a piece of land that you can virtually own, in addition to farm supplies and other items. Virtual currency often denotes cyber currency or electronic money, which cannot be classified legal tender. It is actually an intangible asset, however it is backed by virtual goods that are again not materially real. Virtual currency has taken the market by storm, with the demand increasing rapidly, prompting large players to enter the fray. Game providers like Zynga are believed to have generated revenues exceeding $100 million and still going fast. Zynga is quite popular with their games featuring on Facebook, with a mad rush of players busy around the clock, across the world.
The latest to enter the virtual currency market is Amazon which has introduced their new virtual currency specifically for the Kindle Fire owners who can use the currency for in-app purchases at the Appstore of Amazon. The service that is expected to go public in May where millions of dollars worth Amazon coins
are expected to be purchased by eager customers who can choose to pay for the in-app purchases either through their credit cards or the virtual currency from Amazon
. The existing app developers are already using the Amazon Coin system of bartering; however they would need prior approval from the App store, in order to use the virtual currency in their apps. The approval needs to be in place by the 25th of April.
The app developers can expect brisk business, and benefit from the high-conversion rates reported from Kindle Fire, allowing the users to spend money in new ways, thus contributing to the revenue of the developers. With the virtual currency replacing real money, developers can expect increased revenues, with the users making a beeline at the App store for more purchases of virtual currency to use for their needs. For every purchase made, the developers are entitled for a hefty commission of 70%, which is rather high. According to Amazon, the valuation is 10 times the real currency, for example, you need to spend $3 to acquire 300 Amazon coins.
The service is currently available only for users in the United States. While developers are allowed to trade in virtual currency, they cannot offer their services and expect to get paid in virtual currency for now. Maybe, if this is allowed in the future, the developers will be able to promote their products vigorously and generate much more revenue.
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