in-app purchases
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You're the Pundit: Is in-app purchasing out of control?
When it comes to forecasting the next big thing, we turn to our secret weapon: the TUAW braintrust. We put the question to you and let you have your go at it. Today's topic is in-app purchasing, or IAP for short. We've been having a house debate recently about the proper role of IAP in game marketing and development. Some companies have been treating their customers as cash cows using IAPs. We find that attitude unacceptable. That said, many games (including Tiny Tower, Battle Nations and others) use IAPs responsibly and well. We feel IAP by itself isn't bad, but some companies (and let us be clear, those are actually the minority of companies) put in-app purchases over game play instead of the other way around. Our group take is that IAP, economically speaking, rewards bad game design. Developers can make more money from games with a high initial fun factor followed by a long, dull grind that players already in the groove will then pay out to avoid. If you're paying to avoid game play or to add cheats that put you at an advantage over other players, then in-app purchases are hiding bad game design. Similarly, if you're paying to "accessorize" your world ("collect all 12 fish"), we feel that IAP is taking advantage of customers. When IAP works in games, it branches, extends, or expands gameplay rather than cheats it. So is IAP out of control in App Store? Should Apple be cracking down on the more predatory uses of IAP? You tell us. Place your vote in this poll and then join in the comments with your take on this. %Poll-71599%
Daily Update for September 23, 2011
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes, which is perfect for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for listening through iTunes, click here. No Flash? Click here to listen.
Developers bemoan trouble with in-app purchases
Twitter was buzzing this morning about a problem with Apple's in-app purchasing system. According to the comments, Apple's receipt verification system is down and developers are losing potential sales. An unconfirmed report from Engadget suggests, Apple may be trying to purge the system of fake receipts. Regardless of the reason, let's hope Apple can get things squared away soon. Customers want to make their purchases and developers want to make their money.
In-app purchasing fail on iTunes is starting to bug developers
In-app purchases via iTunes have apparently been failing in a big way for the last ten hours and app creators who depend on this heavily taxed income are getting antsy. We're hearing unconfirmed speculation that the problem may be connected to fake purchase receipts getting into the system. Whatever the cause, one developer told us the failure is "losing lots of sales" for apps that use receipt verification and is "threatening to more-or-less take down the entire IAP ecosystem." Seeing as Apple insists on this being the only route for in-app purchasing, they'd better fix it pretty darned quick. [Thanks, Tipster]
Report: In-app purchases a strong source of iOS app revenue
iOS app developers who are looking to make big bucks on the App Store should consider using the in-app purchase model, according to a recently published study from Distimo. In-app purchases are a huge source of revenue, accounting for a whopping 72 percent of all App Store revenues. That number has increased drastically from July of 2010, when only 28 percent of App Store revenues came from in-app purchases. What's even more surprising is that only four percent of all apps are currently using the in-app purchase model. This all points to a trend of freemium apps dominating the App Store. These, of course, are apps that are free to download and try out, but require an in-app purchase to supply full functionality. Freemium apps made up the majority of the revenue -- 48 percent, or nearly half of all App Store earnings. Many of these apps are games, but comic apps are also starting to create an impact. TUAW would like to know what your favorite purchase model is -- a one-time purchase that gives you unlimited upgrades and full functionality, or a free download with in-app purchases. Answer our poll below, and if you feel compelled to provide a longer answer, do so in the comments. %Poll-69266%
Freemium items may make money for devs, but aren't kept by consumers
The developers behind the iOS game Hungry Shark recently released some statistics showing just how powerful the freemium model (in which customers download an app or game for free, and then support it with in-app purchases) can be. While the game floundered as a paid app, it's gotten much more popular after going free, and actually increased its revenue by five times over. Currently, says Future Games, the average in-app purchase is as high as $3.26, and that's in addition to having a daily active user base of 250,000 people. Clearly, the freemium model, when combined with the right game and the right audience, works very well. But what's the other side of the equation look like? Mobile advertising firm Flurry also released a report recently, and said that almost overwhelmingly, the main items sold in a freemium game are a "consumable" -- a boost or temporary ability that a customer can use up. That's opposed to a "durable" item, like a new weapon that stays around, or a "personalization" item, like a name change. Flurry says that since consumable items can often directly affect the game, consumers are much more interested in spending money on them, sometimes in surprising amounts. Now, I'd argue that beyond all of this data, it still depends on just what game and which items you're talking about. If a game is terrible, it's far from guaranteed to make any money no matter what model you're using. And I know for a fact that some consumers will backlash against a consumable item that affects gameplay too much, like a double-damage token in a multiplayer game, or anything else that could be seen as cheating. But for the right games, and for items used and sold in the right way, freemium can support an app and even a whole developer with significant amounts of revenue. Angry Birds has been cited before as a great example of how to implement freemium content, with its Mighty Eagle consumable item. And there are a number of other games out there that have figured all of this out, and have the monetary rewards to prove it.
Nintendo 3DS titles to get in-game purchasing later this year
Nintendo needs to milk more out of its revenue-generating units -- er, that's us -- in order to reassure anxious investors. Hence Satoru Iwata's mention at a financial Q&A of plans to allow in-game premium DLC on 3DS titles by the end of this year. He said he was wary that the Nintendo brand could be damaged by low-quality DLC, but was nevertheless keen to offer 3DS customers a way to purchase extra levels or features that extend the life of a game. It's about time Nintendo spruced up its online offerings, but we'd rather spend our arcade money on this.
Lodsys adds Rovio, Atari, EA and others to patent suit, makes birds even angrier
If you thought Lodsys was done making a spectacle of itself and dragging app developers to court, you were sorely mistaken. The king of the patent trolls has amended its original complaint against mobile devs, removing one company, but adding five new ones -- all of them big names. Rovio, Electronic Arts, Square Enix, Atari, and Take-Two Interactive have been added to the list of defendants in the suit filed back in May. Vietnamese company Wulven Games has been dropped from the complaint, but Lodsys has more than made up for it by directly targeting possibly the largest mobile title out there -- Angry Birds. You can find the completely amended filing at the source link and, if you're in the mood for a bit of a refresher, check out the more coverage link.
Hulu adheres to Apple's revised in-app subscription rules, others to fall in line?
A mere eleven days have passed since Apple relaxed its in-app subscription rules, and now All Things D has stumbled upon screenshots of the first major subscription program to comply. A forthcoming update to the Hulu Plus iOS app will nix all references that previously pointed towards Hulu's own website for signing up new users, allowing Hulu to skirt around implementing Apple's in-app subscription mechanism (and the thirty percent cut that goes along with it). That said, it'll also kill Hulu's opportunity to easily inform folks of where to pony up for Hulu Plus, but we suspect the added friction is worth losing a few eyes instead of buoying Cupertino's warchest. Seeing as there's under a fortnight until Apple's new rules come into effect, we certainly wouldn't recommend betting against a slew of similarly-positioned apps to follow suit.
New York Post blocks iPad access through Safari browser, hopes you'll pay for a subscription instead
Well, that's one way to make people pay for puns. The New York Post, that bastion of fair, balanced, and not-at-all sensationalistic reporting, has blocked iPad owners from reading its stories through the tablet's Safari browser. If folks want the full spill on Hugh Hefner getting ditched at the altar, they'll be prompted to download the iOS app, which requires signing up for a subscription starting at $6.99 on a month-to-month basis. Setting aside News Corp.'s hubris for a moment, what's odd about this is the number of workarounds Rupert Murdoch & Co. left us cheapskates. You can still read the site on a desktop browser or a phone, including an Android one. Basically, then, News Corp. is strangling web access, but only for a select group of readers. That's a stark contrast from other content providers (even the News Corp-owned Wall Street Journal), which have been more platform-agnostic. Then again, there's the dim possibility that News Corp. targeted the iPad in an effort to re-brand the Post as a glossier sort of tabloid, à la The Daily. To which we say, that's some wishful thinking there, Rupe.
Apple gives in to publishers, changes policy on in-app subscription prices
It looks like Apple has decided to make some pretty major changes to its App Store Review Guidelines -- and, in particular, to its controversial in-app subscription policy. Under the new guidelines, publishers will be able to offer subscriptions to content outside of the App Store, as long as their apps don't include a "buy" button that directs users away from Apple's marketplace. Under the previous version of the policy, which was set to go into effect at the end of this month, app owners offering subscriptions outside of App Store were required to sell equivalent, in-app services at the "same price or less than it is offered outside the app," while giving a 30 percent cut to Cupertino. Now, however, they can price these in-app subscriptions as they see fit, or circumvent the system altogether, by exclusively selling them outside of their apps. Apple will still receive 30 percent of the revenue generated from in-app subscriptions, but won't get any money from purchases made outside of its domain. Theoretically, then, publishers would be able to offer in-app subscriptions at higher prices, in order to offset Apple's share. This is how the new rules are worded: 11.13 Apps that link to external mechanisms for purchases or subscriptions to be used in the app, such as a "buy" button that goes to a web site to purchase a digital book, will be rejected 11.14 Apps can read or play approved content (specifically magazines, newspapers, books, audio, music, and video) that is subscribed to or purchased outside of the app, as long as there is no button or external link in the app to purchase the approved content. Apple will not receive any portion of the revenues for approved content that is subscribed to or purchased outside of the app. It's important to note, though, that Apple hasn't made any changes to its policy on sharing user information. Publishers had been lobbying to gain access to subscribers' credit card data and other personal information, which they see as critical to applying a TV Everywhere model to online publishing. With today's concessions, though, these demands may become less insistent.
Wired, GQ in-app purchase subscriptions launching today
Condé Nast has officially launched subscriptions today for iPad editions of Wired and GQ. The Wired and GQ apps are free, and readers can buy either single issues at US$1.99 a pop or a full year for $19.99 through in-app purchases. The subscriptions automatically renew until you cancel them, so if you're curious about the magazine and don't want to be billed monthly for single issues, buy the subscription and cancel as quickly as possible. Current subscribers to the print versions from the US and Canada can access their digital subscriptions from within the app at no extra cost. Past digital issues of Wired are available for in-app purchase for $3.99, and you'll be able to do the same with back issues of the digital edition of GQ. You can read a full TUAW review of the Wired app here. Show full PR text WIRED SUBSCRIPTION NOW AVAILABLE ON IPAD New York, N.Y. – May 24, 2011 – WIRED is excited to announce that subscriptions for its game-changing iPad app will be available through In-App Purchase on the App Store beginning today. Starting with the June issue, featuring a special report produced in collaboration with NPR's Planet Money on the future of American jobs, WIRED will offer monthly and yearly iPad subscriptions and will continue to offer single issues, all via In-App Purchase on the App Store. Subscriptions to WIRED will be available for $1.99 per month or $19.99 per year. "WIRED thrives on progress across platforms, whether it's in the magazine, on the website, or on the iPad, " said VP and publisher Howard Mittman. "When the app launched last year it was the first to show how interactive and innovative the medium could be. Now, by offering our readers a subscription on iPad, WIRED is poised to lead the digital publishing conversation and reach a wider audience." Current WIRED print subscribers can access iPad editions immediately through their current subscription. Those who would like to purchase new print subscriptions, which include access to the iPad edition for $19.99, may do so at www.wired.com. The WIRED app is available as a free download from the App Store on iPad or at www.itunes.com/appstore. GQ SUBSCRIPTIONS NOW AVAILABLE ON iPAD New York, N.Y., May 24, 2011- GQ subscriptions for iPad are now available through In-App Purchase on the App Store, it was announced today by the magazine. Beginning with the June issue, featuring Alexander Skarsgård, star of HBO's True Blood, GQ will offer monthly and yearly iPad subscriptions and continue to offer single issues, all via In-App Purchase on the App Store. Subscriptions to GQ will be available for $1.99 per month or $19.99 per year. Current GQ print subscribers will be able to access iPad editions immediately through their current subscription. Those who would like to purchase new print subscriptions, which include access to the iPad edition for $19.99, may do so at GQ.com. The GQ App is available as a free download from the App Store on iPad or at www.itunes.com/appstore. About GQ GQ is the leading men's general-interest magazine, with a monthly readership of 6.6 million readers. It is available in print, online at GQ.com, and as an app at iTunes.com. The magazine is published by Condé Nast, a division of Advance Publications. Condé Nast operates in twenty-five countries and is the world leader in exceptional content creation.
Angry Birds gets a web version, coming to Chrome Web Store
Yet another platform has been conquered by the affronted fowl: the web! Angry Birds' web client is built in WebGL, so presumably browsers other than Google's Chrome should be able to run it as well, and even if you can't handle WebGL, there's Canvas support too. 60fps are promised on most modern PCs, and we've spotted SD and HD labels, suggesting there'll be a choice of quality to match your computer's performance. Offline gaming will also be available. Chrome will get some exclusive content, such as "Chrome bombs" and other cutesy bits. Rovio just noted it's "really, really happy about the 5 percent," referring to Google's pricing model of charging a flat fee of 5 percent to developers on in-app purchases in the Chrome Web Store. Yes, the Mighty Eagle will be a purchasable option for the impatient among you. The game will be available in the Store immediately after Google's I/O 2011 keynote, so look out for it shortly. Update: And the Angry Birds have landed. Hit up the source link below to obtain the free app. %Gallery-123364%
Google makes Chrome Web Store available worldwide, adds in-app purchases and flat five percent fee
Google has just announced that it's making the Chrome Web Store available to the "entire userbase of Chrome" -- all 160 million, according to the company's latest numbers -- and in 41 different languages no less, although those outside the current markets will apparently only have access to free apps initially. What's more, it's also now added in-app purchases to the mix -- which it notes developers can add to their apps with "literally one line of code" -- and it's announced that it plans to "keep it simple" by simply charging developers a flat five percent fee instead of opting for some of the more complicated fee structures out there. As for how the Web Store has been doing so far, Google revealed that there has been 17 million app installs to date, although it provided few details beyond that. %Gallery-123363%
Report: 40% of App Store game downloads are freemium
Xyologic is a company that analyzes mobile app sales and trends, and its latest report says that a full 40 percent of game downloads from Apple's App Store consist of freemium titles -- games that are free to download, but make money with ads or in-app purchases. Ngmoco made a big splash a while back by saying that freemium was the future of the App Store, and according to this report, that is turning out to be more and more true. Xylogoic says that there were 99.9 million downloads of free iPhone games last month, and 80.8 percent of all app downloads were of free apps. It's well known that free games have a wider audience than paid apps (just because the barrier to entry isn't there), and while some developers say that the free audience is always better, the question has always been how to monetize all of those users. In-app purchases seem to be working -- the number of free games with in-app purchases available on the App Store is rising every month, and of the top 150 free games on the store, Xyologic says that 94 of those (63 percent) are making use of in-app purchases. There are certainly still apps benefiting from other models, but there's no question that freemium is still growing as one way to put a successful app on the App Store.
Apple faces lawsuit over in-app purchases by children
Apple is facing a lawsuit over its newly revised in-app purchasing policy. The suit was filed by Garen Meguerian of Pennsylvania who accuses Apple of the unlawful exploitation of children with this iOS feature. The crux of the suit hinges on Apple's policy that uses a single password to gain access to an Apple account and make an in-app purchase. Apple's in-app purchasing policy was recently updated to require users to enter their iTunes password a second time to make a purchase following reports of children racking up thousands of dollars in iTunes purchases. Meguerian recognizes Apple's new policy, but asserts this change is not enough. Minors under 13 who have their parent's iTunes account can still make purchases without their parent's consent. According to the suit, Apple should require a secondary password, separate from the main iTunes password, for all in-app purchases. Meguerian's suit stems from his own experience with his 9-year old daughter who racked up over $200 in charges while playing Zombie Cafe (shown above), Treasure Story and City Story. Meguerian was not aware of these charges until he received his monthly credit card bill. Though it may or may not have bearing on the case, receipts submitted as evidence show these purchases were made before Apple changed its in-app policy in February.
TUAW's Daily App: ClubWorld
ClubWorld may not exactly be your kind of game. It's sort of a mashup of popular freemium gameplay elements. ClubWorld includes Farmville-style time sinks as you build your club up, social environments to customize and share with friends, and even some music-based mini-games. The look and the aesthetic are more tuned towards younger players than the average gamer, and most people old enough to buy an iPhone for themselves probably won't be too interested. But that's not really what's interesting about ClubWorld. What is interesting is that it's from Tapulous, the company that's had so much success on the App Store that it was bought by Disney last year. While Tapulous has been moving towards the freemium model with its Tap Tap Revenge series, ClubWorld is a complete embrace of that model. This looks like a Facebook game more than anything else. There are even in-app purchases for "energy items" (called sugar here) and iTunes referral links to music. Looking at this game, I'd almost call Tapulous a social gaming company rather than an iPhone developer. ClubWorld does take full advantage of Tapulous' music expertise, using lots of fully-licensed tracks in the various clubs you can create and play with, but this is much more a stab in the direction of We Rule and even Booyah's Nightclub City. It's a very interesting turn for the company; we'll have to see how it works out. Meanwhile, if you want to give it a try, ClubWorld is a free download right now.
Tap Tap Tap developer says 5% of Camera+ users make in-app purchases
So yes, says Tap Tap Tap boss John Casasanta, US$70,000 isn't to be sniffed at, but it still represents only 5 percent of Camera+'s 2 MILLION users using the in-app purchase facility to buy the $0.99 "I (heart) Analog" effects pack. Well, whether or not you sniff at 70 grand depends rather on how much you earn elsewhere; Casasanta, in fact, has sold 2 million copies of Camera+ (currently on sale at $0.99 instead of $1.99) so, yeah, they can consider it small change. However, the statistics he reveals on the company blog are interesting; half of all Camera+ users upgraded to the new version within six days, he says. And while the app was launched last summer (and then withdrawn because of the use of the iPhone's volume switch as a shutter release before coming back at the end of 2010), and its first million sales took, well, a while, the second million sales took only three months. "If we were to stay on the same weekly pace that we're currently on (~160k sales per week), we'll get to 3 million in only 1.5 months from now," says Casasanta. And 4 million in three weeks, 5 million in the next 10 days and then a million a day, muahaha... perhaps he should buy a white cat to stroke to go with that cackle. Seriously, Camera+ is a great app and the free 2.2 update adds many worthwhile features that we like here at TUAW. It's excellent to see them having such success. [Via AppleInsider]
Android Market gets in-app billing, your virtual nickels are now spoken for
Google said they were coming this week, and here they are -- Android apps can now have their own miniature storefronts for in-app purchases galore. You'll find Tap Tap Revenge, Comics, Gun Bros, Deer Hunter Challenge HD, WSOP3 and Dungeon Defenders: FW Deluxe accept your credit card for microtransactions starting this very instant, and Android developers can start building similar functionality into their own creations right now. Head on over to our source link for instructions on how to shake those extra coins out. Don't want to commit to a full transaction yourself? Hit the break for a quick video refresher of how in-app purchases work. [Thanks to everyone who sent this in]
In-app purchasing coming to Android Market next week
Google has launched the final testing phase for in-app purchases in Android Market products, with the feature set to make its public debut next week. Developers are encouraged to upload and test in-app content and transactions on the Developer Console "right away." But hang on: First, it's "absolutely essential" for developers to review the security guidelines, Google notes. You wouldn't want the Ring of Doom slipping through the cracks and into the wrong hands, would you? Obfuscate your code!
