The value of in-app purchases

18 Apr 13 03:07PM EST
Post by Peter Zaluzny  Peter Zaluzny Google Plus

I have mixed feelings about in-app purchases. On the one hand, they can expand the lifecycle of a program with special updates and expansions suited to specific consumer needs. On the other they can capitalise on a desire for instant gratification.

It's the latter that are currently making headlines all over the world, with kids unknowingly spending thousands of dollars of their parents' money. Nevertheless, in-app purchases are wildly popular, accounting for 76% of iPhone app revenue in the US alone. Consumers need to be able to identify which apps are offering a product or service and which ones are offering a quick fix, so to speak.

What's an in-app purchase?

In-app purchases, or micro transactions, are commonly available in free entertainment apps such as games. These games are usually referred to as 'freemium products', as you get the base app for free, but the best stuff, which is sometimes otherwise unavailable, requires a fee.

Take Subway Surfers for example. It's a hugely popular free app for Android and iOS, with over 25 million users logging on every day. You control a character who runs down a tunnel, dodging trains and collecting coins, which you can spend on upgrades. These unlocks start out cheap, but the advanced items require tens or hundreds of thousands of coins, such as one character who costs 120,000 coins. To amass this hoard of virtual currency would take hours - on a really good run I'm lucky if I grab 1000 coins. Alternatively, you can skip all the hard work and buy 180 000 coins for US$20.99.

The emphasis placed is on the downloadable content and how it can be used to enhance the application. Usually the purchase is not so much an enhancement, but rather, an additional purchase that makes difficult or boring parts of the software easier. A popular development technique that creates an illusion of difficulty is 'the grind.' The grind showcases a reward to the player then forces them to complete the same tasks over and over again to reach it, turning a fun game into a mundane experience. I'd have to complete 180 good runs in Subway Surfers before I could unlock the aforementioned character, for example.

Is there a point?

What I don't understand is why you would download a game, then pay for a product that completes the game for you. How can you refer to a paid item that reduces the amount of time spent with a free app an enhancement? You don't purchase a DIY shelf kit then pay someone else to build it for you. Part of the satisfaction is in the sense of achievement in doing it yourself, and that's what these games are supposed to be about. It's the satisfying experience of playing the game and earning a reward, but some consumers are only able to find satisfaction in the rewards. These people are the most vulnerable.

Is it fair?

Such vulnerability has prompted the Office of Fair Trading in Britain to investigate whether these development techniques unfairly pressure people into buying in game items and whether the products are misleading, commercially aggressive, or otherwise unfair. For example, Tap Fish for iPhone and Android playfully offers 'Fishbucks,' which could be said to tempt children, as they focus on the Fishbucks and not the actual money involved. They are also looking to see if some apps can appropriately refer to themselves as free just because they don't incur a cost for the initial download. In app purchases won't be banned, but I'm confident that we'll see a change in how these are advertised to really drive home the fact that when you consider an in-app purchase, you're using real money.

At the end of the day, it's up to you to decide whether these micro transactions are worth the cost. If you're a parent, it's important to understand what these apps have to offer and whether your child could be tempted by the promise of instant in-game gratification to combat the grind. Some purchases can genuinely expand an already satisfying game or service, and are worth every cent.

But before you reach for your hip pocket, ask yourself if you think that they'll enhance the experience for you, or if they'll simply provide a quick fix to a problem you can solve for free over time.


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