Average Mobile In-Game Purchase: $14

Some interesting data on in-app purchases.

You probably know that only a few percent of players of free games actually go ahead and pay for something within the game. But here's the part you may not know: According to Flurry, the average in-game purchaser racks up $14 in charges on a game. It seems that if you like a game enough to spend some money on it, you really like it.

Their take-away lesson for game developers: You're whale hunting. Whales, that is, in the casino phrasing, which are players who spend big money.

Find a way to attract whales, and you're going to make some money.

Apple Fires Back Against The Trolls

This may be a picture of Lodsys' CEO.

Apple's legal team has fired off a letter to the trolls at Lodsys, basically telling them to lay off their threats to app developers over use of Lodsys patents on in-app purchasing. Apple's licensed those rights and app makers owe Lodsys nothing, according to Apple. Besides, Apple's lawyers are bigger, hairier, and meaner than yours. Nyah, nyah, nyah.

Hopefully this will shut down the attempt to extort fees from app developers; we'll see how Lodsys responds. My advice to them is to quietly slink away before Apple costs them more than they can ever hope to earn in the next few decades, by way of lawyer fees.

Apple Being Investigated By FTC

Look, kids! These can be yours if you just hand over mommy's credit card...

Looks like the complaints about in-app purchasing have found some investigators... the FTC has launched an investigation of Apple over the way kids have been running up hundreds or even thousands of dollars of purchases . (I wonder if smurfberries will be classed as a controlled substance?) Of course, now that Apple has made you enter the password again in order to initiate in-app purchases, this investigation may not go too far. But it's not clear yet whether Apple's solution will fix the problem entirely.

Also of concern is how sneaky companies are prepared to be in order to drain dollars out of hapless children. Excuse, I meant "adult power users," how silly of me to think that children would be the only players of The Smurf's Village. I wonder how this will affect Capcom's revenue stream? Probably makes them feel a little blue...

Apple Closes In-App Purchase Loophole

Is this Capcom's insidious device for plucking the cash out of your credit card?

No doubt responding to the flurry of stories in the media about kids running up hundreds or thousands in charges on mom's credit had something to do with this, but Apple has made an important change in iOS 4.3. Previously, you could buy an app, which requires entering your password, and then for the next 15 minutes any purchase on your iOS device does not require a password. So mom would buy, say, The Smurf's Village, then hand the iPad over to Junior, who would find that he could load up on smurfberries and win the game with mom none the wiser... until the credit card bill arrived.

After much wailing, and gnashing of teeth, and rumors of tense conversations between Apple and Capcom, and an FTC investigation, Apple's got a fix in place. When you use iOS 4.3,  you still have a 15-minute window once you enter your password where you can purchase apps without re-entering the password. However, should you try to make an in-app purchase, you'll need to re-enter the password. This simple change should fix the problem in the vast majority of cases.

However, I predict a big drop in the smurfberry futures market. Perhaps Capcom will have to rely on getting more "adult power users" to play The Smurf's Village if they want to keep their revenue numbers up. Wehn you can't steal from unsuspecting small children, it's so much harder to make money.

Smurfs Encounter Bad Apple

Smurfberry pusher.

Sounds like Apple isn't too happy about Capcom's The Smurf's Village iOS title, which has been occupying the #1 slot for a while now. The issue is smurfberries... and kids buying hundreds or thousands of dollars worth of them, without understanding that they are spending their parent's money. Oops. So Apple is calling Capcom on the carpet, in what must be some uncomfortable conversations. Apple may end up changing their 15-minute window where you don't have to re-enter your password to authorize purchases. Which means Capcom may be making life more difficult for people who don't even know their app exists. Good one, guys.

No official word from Capcom about this... I hope they don't plan to use the "We only do it for adult power users" defense again. Will they make changes to the game? I doubt it... not even if Apple says they'll hold their breath until they turn blue...

Update: Capcom says they haven't heard any complaints from Apple. Well, if indeed they haven't, perhaps they should...

In-App Purchasing Boosts Profits, Burns Parents

I think Gargamel must have designed this scheme to have kids rob their parents.

The in-app purchasing boom that has taken the App Store by storm continues to cause problems with parents. Apple's default 15-minute window for the iTunes password means that if you hand your iPhone or iPad to a child, they can make in-app purchases without entering the password if they do it within 15 minutes after you entered it. And if they keep doing it, or if they happen to know the password (or get an older sibling to use the password)... you can end up with $1400 in smurfberry charges on your credit card, like this mother of a second-grader.

It does bring to mind the ringtone boom, when so many unscrupulous vendors were getting people to buy subscriptions services when they just wanted a little ringtone. It eventually led to the downfall of the ringtone business.

The game industry should be concerned about what children's games with in-app purchases could be doing to the industry's image. And to the image of in-app purchasing, and the perception of game companies. Yes, perhaps Apple should be making the parental controls more obvious or even the default. Perhaps there should be more oversight by Apple on children's games, and requiring them to make in-app purchasing more difficult or more under the control of parents by default. And perhaps Google should be taking notes before in-app purchasing enters the Android market.

Saying that "Oh, it's just a few games that have a problem" or "It's only some kids games, not MY games" is like thinking having a No Peeing section in a swimming pool means that the whole pool will be kept clean no matter what somebody does in some corner. All game developers are in the pool together, and we should make sure nobody's smurfing things up.

The Dark Side Of In-App Purchasing

Who knew Smurfberries were so mothersmurfin' expensive?

It hasn't taken long for the dark side of in-app purchasing to emerge. Of the top 10 highest grossing apps in the App Store, 6 of them are free to download... and make their money from in-app purchases. Capcom's The Smurfs' Village was the highest grossing app shortly after its release a month ago, even though it's a free download. The secret? In-app purchases. You can buy Smurfberries to help you play the game, and in fact you can buy a wheelbarrow full of them for $59.99 if you want to. Who would be crazy enough to do that? Perhaps a 4-year-old child who doesn't really understand the idea of money, and all it takes is two taps to buy things. In the AP story on the link I posted, one kid racked up over $66 in a short time, and another hit $140.

Wait, isn't there a password protection to prevent unauthorized iTunes purchases? Yes, but there's a loophole: If you tap on another purchase within 15 minutes after entering the password, you're not asked for the password again. So if you use your password, then hand your iPad or iPod to your child, they can merrily buy Smurfberries until your credit card freaks out.

Well, but that loophole should only occur in a very limited number of cases, right? Apparently the 15 minute time limit doesn't work all the time... some parents are reporting they hadn't used their password that day and the kids are still able to buy things without re-entering the password. Not good, Apple.

On the positive side, Apple has been very good about providing refunds. And you can lock out in-app purchases using the settings menu. But there's an issue with publishers providing games with seductive in-app purchases aimed at children too young to be deciding on purchases. Wait, here's Capcom's response: Capcom spokesman Michael Larson says "Smurfs" is no different from other games in this regard, and the bulk purchasing option is useful to adult "power players."


Adult power players? For a Smurfs game? What kind of bullsmurf are you trying to hand out? Here's a general marketing tip: Try to avoid obvious flights of fancy when talking to reporters.


Of course, it's not just Capcom that's doing this. Four of the six top-grossing apps are kid-oriented games. Mixing in-app purchases into games aimed at children seems like a recipe for problems. Sure, you might make some serious money for a while, until the angry hordes of parents descend on you with tar and feathers.


In-app purchases are a very powerful tool... and like all power tools it's very dangerous if mishandled. Marketers need to tread carefully in this area.