In-App Purchases: A Scourge Or A Necessity?


In these highly restrictive financial times many of us have to count every penny. We have to ensure we have enough to feed ourselves and keep a warm roof over our heads. However we also need distractions and for many this distraction comes in the form of a video game. 

In the good old days (yes, my good old days probably differ from your good old days, mileage will vary) you simply decided you wanted to purchase a game, you handed over your cash and played the game ad nauseam. It was a simple process with a clearly defined outlay. However many games nowadays have plumped for the in-app purchase model. This is usually, although not exclusively, associated with 'free' games.  

I am pretty sure the whole situation began with console Downloadable Content (DLC). As the internet grew in popularity and speed, developers realised they could bolt-on new content to their games. This allowed for new maps, new missions, new equipment and various other items to become available to the user. However very rarely was the new DLC required to continue playing the original game, it simply enhanced it.  

Fast forward to the introduction of the iPhone and the App Store. As the store grew in popularity it created great competition between developers to get their app noticed. Many developers poured their heart and soul into their creations and charged, what they considered, an appropriate amount. Sometimes this resulted in a fairly high costing app, which made many potential customers baulk at the idea of purchasing it. Suddenly developers appeared to engage in a price battle which sent many developers rushing to the bottom of the pricing scale. The obvious result was that revenue dropped and eventually dwindled to nothing once the initial excitement of a new launch had passed. 

The developers needed to find a new model.  

Apple tried to help developers by introducing iAd. This allowed devs to place Apples Mobile Advertising platform right into their app with the hope it might generate enough revenue from impressions and click throughs. Unfortunately (or fortunately) this system never really took off. 

However, the Freemium model did start to catch on. A developer could give their app for free but in some restricted form. If the user liked the app they could pay to have the full application unlocked. Many followed this model and it proved quite successful for a time.   

This model eventually suffered in a similar fashion to the initial method. It still only allowed for one trip to the well, so to speak. Another method had to be found.  

Dungeon Keeper in-app purchase screen

This has now led to In-App Purchases. This model also gave the game away for free but still hobbeled it in some form or another. As before money could be traded to unlock areas or currency within the game. However, now these unlocked features were rarely permanent. They would be gradually consumed as you continued to play. They could buy you some in-game currency for example to build something. They could be used to reduce a predetermined wait time to speed up production. They could unlock new equipment or characters. Basically they turned the game into a slot machine that just kept demanding more and more of your cash. Suddenly games went from being fun, addictive and entertaining to managerial and time consuming financial grinds, all in the cause to build some virtual doohickey that had no real worth or purpose, and worst of all, folks bought into it. 

Free games with IAP's rose quickly through the gaming charts. They currently occupy the top position in the 'Highest Grossing' section in the App Store. There have been court cases, appeals, refund demands and a growing sense of distaste for this new model. However the games still come. Every week a new app appears in the App Store that is laden down with restrictions and artificial delays that demand you spend real money to negate them. 

My real concern however is that we, as users, have been complacent in all of this. Firstly we didn't want to pay the initial prices of developed apps. Then, we didn't want to pay for apps reduced in price. Then, we didn't want our apps loaded with advertising. However, we do appear to love hitting the 'Buy' button to purchase some virtual goods or service. It is no surprise then that developers keep producing these kinds of apps. The sheer number of users willing to continue funding such software makes the whole process profitable and worth continuing, at least for the foreseeable future. Maybe only when we, the great buying public, decide that enough is enough and stop downloading these apps might the developers rethink their commercial strategy.

BlogKarl Madden