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Canajun Finances Home » In-App Purchases and the New Economy

In-App Purchases and the New Economy

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

in-app spending
In-App Purchases, the NEW Money Magnet?

How big are Freemiums (aka in-app 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”. You need “money” 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 Inâ„¢ from EA Sports. 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 have in-app purchases. The option to do in-app purchases is turned OFF on his iPad and many times he has wanted to “buy money”. We have not relented on this rule.

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

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Helpful Video

There was a South Park episode about this very topic “Freemium Isn’t Free“, which sums things up nicely. It 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.

In-App Freemiums

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

Canajun Finances Home » In-App Purchases and the New Economy

Feel Free to Comment

  1. 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!!!

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