In-app purchases - two sides to every story

I recently read an interesting story of a mother of a 12 year old boy, who is facing a £7,000 bill - a bill he inadvertently ran up by playing a popular online game on his mobile phone. Mrs Cox told the BBC that neither she nor her son were given any warning about the charges, incurred from purchases within the game application.

The situation arose when Mrs Cox’s son bought two add-ons within the game ‘Clash of the Clans’, which cost £5.98 in total; however, these transactions triggered a permissions setting that, from then on, allowed the phone to continue make in-app. purchases automatically - at a staggering rate of £240 per day.

Mrs Cox claimed that safeguards against such purchases were not in place and that firms offering apps should review procedures “…and forget making a profit from vulnerable people”.

A games expert stated, however, that there would have been an email receipt sent to the Google account that is registered on the phone. He also stated that there would also have been a warning when the game was initially downloaded and that on each occasion a purchase was made there would have been a request for an approval.

What this unfortunate story highlights is the obvious need for parents to be acutely vigilant of what their children are doing on their personal electronic devices and monitor their actions and behaviour. Now, teenagers may find this annoying and object to their ‘privacy’ being invaded, but this is just the same as wanting to know who they are hanging around with or setting a time when they should be home by - it’s called good parenting, the only difference being that it requires parents to realise that they need to talk to their children about their online activities and have an on-going understanding of the technological age that they are growing up in.

Having just read the above story, you may have formed the opinion that in-app purchases within children’s apps, such as games, are undoubtedly a bad thing and should be banned outright. Indeed, read most articles within the popular press about this controversial subject and you would quickly realise that you were not alone.

There is, however, another side to this story.

Recently, British publisher ‘Nosy Crow’ released an iPhone/iPad app called ‘Nosy Crow Jigsaws’, which is a collection of digital jigsaws based on artwork from the company’s own books and apps. Now, this app is a ‘freemium’ app - that is it is free to download but users have to buy packs of puzzles, via in-app purchases. This is, however, where Nosy Crow have been careful and have demonstrated a responsible awareness of the problems associated with in-app purchases in children’s apps.

When parents download the app, they get five free puzzles as well as others based on the company’s fairy tale apps. They are then offered the options of either purchasing packs of 10 puzzles at a time for £0.69 or unlocking the whole collection of 200 puzzles for £6.99. Setting an upper limit to unlocking the whole contents of a game/app is completely contrary to the usual business strategies of the freemium games industry, where publishers gain significant profit from heavy-spending users, but the company believes that offering the cap is a responsible approach and have gone as far as to purposefully not offer common game ‘rewards’ such as tokens or ‘gold coins’, which they believe confuse children as to whether or not they are spending real money.

What this highlights is a major dilemma for app development companies who specialise in mobile software aimed at children. On the one hand, these companies have to be sustainable and hence have profitable business strategies, but on the other, they wish to appear responsible and not be caught up in a situation such as the one described by Mrs Cox.

Up to now, this dilemma has not been resolved, so, until the app industry can consistently demonstrate a responsible approach to ‘freemium’ apps aimed at children, it remains the parent’s responsibility to constantly observe what their children are doing, not only on their computers, but on their mobile phones and tablets, to ensure that their enthusiasm for playing the game is not clouding their awareness and hence causing them to be duped into running up huge bills by making in-app purchases.

In a related news story recently, it was reported that Google is to pay out at least $19m in refunds to settle a formal complaint over unauthorised in-app purchases. Read more,

We would love to hear your thoughs on 'freemium' apps, so please let us know by using the commments section below.

Written by Steve Gresty on September 11, 2014 08:24

Freemium - Tricks of the trade or legitimate practice?

It may seem somewhat ironic but the Internet has disrupted the traditional business models of the computer games industry just as it has many other industries.

The ability to distribute data electronically as opposed to on a physical disk has been an undoubted boon for many suppliers of digital or digitise-able content. It has also provided great benefits to the end consumer.

Not only does the Internet allow gamers located in different continents and time zones to communicate and play each other in real time, it also provides an efficient way of acquiring upgrades, expansions and even bug fixes to the original game software. Modern games consoles provide a platform which assumes a hybrid online/physical disk model.

These days of course gaming is big business not just on the traditional platforms and computers, but also on mobile devices such as tablets and smart phones - all of which have an Internet connection.

Playable game demos have always been important for the marketing of new computer games and magazines have been distributing demos on cover mounted cassette tapes, disks and later CDs and DVDs for almost as long as the industry has existed.

In is therefore no surprise that the playable demo has used the Internet as a means of distribution.

Combine the notion of online program upgrades and the idea of the playable demo and you get the 'Freemium' model as it applies to the computer games industry.

A player can acquire a basic form of a game for little or no money and have a play. If they enjoy the game and wish to experience more, they can expand the games parameters by paying for an upgrade from within the game's own interface (and 'in-game' or 'in-app' purchase).

The Freemium model for digital content is widely used in a number of industries. Many online newspapers for instance will provide a certain amount of information for free, but require an upgrade to read deeper.

There has however been much debate around the freemium model as applied to computer games, and especially those which appeal to younger children. Recently the Office of Fair Trading warned the games and online application industry of what it perceived as "potentially unfair and aggressive commercial practices" amid concerns that they could irresponsibly coerce children to pay to continue playing.

There is obvious concern over potential for children to spend or run up bills on in-game or in-app purchase.

It is yet one more area of online safety which parents and teachers will need to educate their children about. But like many aspects of e-safety, much of the learning is about ensuring that usual practice and knowledge is understood when contextualised within the online world. If a child has no concept of money or cost then what hope do they have of understanding a virtual purchase.

While it is undoubtedly possible to cite cases of some app and games providers applying a cynical approach to exploiting in-app purchases by bamboozling the end user into making purchases, the model when used responsibly is a legitimate mainstay of the software publishing sales strategy.

The freemium model is here to stay and is comparable to the way in which we pay for utilities per metered unit or cell phone call time through pay as you go.

One of the reasons that app and games producers use the freemium model is because it provides some kind of defence against the rampant piracy that the software, games, music and movie industry has suffered. Piracy is now so common place that many people simply expect all digital content to be free of charge and show little respect for the talent, energy, time and cost which goes in to producing it.

And yes, once again it is our responsibility to teach young people about piracy in the same way we would talk to them about theft of a physical item.

For teaching resources on gaming or online piracy, visit the E-safety Support Lesson Plans and E-safety Support Assembly Plans

Written by Safeguarding Essentials on October 10, 2013 18:48

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