In App Purchases and the New Economy

in Spending

You may not be aware, but one of the biggest ways to make money on-line is by making “free” games. How can you make a bloody fortune on line with a game that costs nothing to buy? Simple, the game is free, but to do things inside of it can cost the player money (now known as Freemiums) , and this seems to be replacing the chocolate bar at the grocery store check out, as kids’ impulse purchase item of choice.

Money Magnet

In App Purchases, the NEW Money Magnet ?
Image courtesy of nongpimmy at FreeDigitalPhotos.net

How big are Freemiums (aka inApp purchases)? Both Google and Apple were forced (or thought it was a good idea?) to add an option to STOP in app purchases (or at least force the user to input a password to do it), that is how much money it made in the early days of “free” apps. This was only done after many horror stories of folks (some kids, but many adults as well) rolling up over $100 worth of purchases on these apps, before realizing they were spending “real” money.

The games themselves don’t call their currency Dollars, Pounds, Yuan or Yen, they call it “money” and you need it to buy the good things to make your “gaming experience better”, which seems to suggest they might worry that if you called it Dollars, folks might tweak in that this is REAL money, but maybe not.

I play Simpsons Tapped In™ from EA Sports, and this game looks like the Golden Calf for EA sports in terms of income numbers. I have actually “bought money” once, when it was “on sale” (odd idea, money being on sale) but I have mostly steered clear of paying for anything. My son plays many (many) games on his iPad that has inApp purchases (however the option to do inApp purchases is turned OFF on his iPad) and many times he has wanted to “buy money”, but we have not relented on this rule.

Money no longer grows on trees, you simply twiddle some bits.

Helpful Video

There was a South Park Episode about this very topic “Freemium Isn’t Free“, which sums things up nicely and compared freemiums to alcohol, in that freemium apps keep saying, “ask your parents about purchases first”. They compared this to the Alcohol industries, “drink responsibly” program.

Be warned, the following video is INCREDIBLY NSFW (it is South Park after all), but it does sum up the business of Alcohol Advertising:


  • John Ryan September 2, 2015, 2:16 PM

    As they point out in the South Park episode – typically it’s a TINY number (0.15% – 1.5%) of “whales” who are spending all the money on these app.

    Make me sad, as it seems like this business model is really exploiting a mental illness more than delivery value.

    South Park hit it out of the park with this episode! Damn Canadian Devil!!!

    • bigcajunman September 2, 2015, 2:19 PM

      I was talking with Terence and Phillip about that yesterday


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