OK, not so much actually. But we do see eye to eye on this: We\u2019re both miffed about in-app purchases.
That\u2019s the sneaky and pernicious practice of free apps \u2014 typically kids\u2019 mobile games \u2014 offering additional content or functionality for cash. And that cash will come from Mom or Dad\u2019s credit card, often without their say-so.
After his young daughter bought an upgrade, Kanye tweeted his displeasure with \u201cany game company that puts in-app purchases on kids games!!!\u201d
\u201cThat makes no sense!!! We give the iPad to our child and every 5 minutes there’s a new purchase!!!\u201d
He added: \u201cIf a game is made for a 2-year-old, just allow them to have fun and give the parents a break for Christ sake.\u201d
Me and Kanye, totes sympatico.
Unfortunately, this is bigger than the both of us. This is a big, big business.
In-app purchases account for the bulk of revenue from mobile games, which is expected to reach nearly $37 billion this year, according to the research firm Newzoo. By 2019, revenue from mobile games could hit $52.5 billion.
Also, Kanye may want to think twice before dissing this as a moneymaker. His wife, Kim Kardashian , makes millions from in-app purchases within her own game, \u201cKim Kardashian: Hollywood.\u201d
In-app purchases caught my eye after a federal judge ruled the other day that Amazon has to pay refunds to customers whose kids made unauthorized purchases on Kindles.
The decision was one of the final actions in a case brought by the Federal Trade Commission in 2014 over unfair business practices involving smartphone and tablet apps.
The FTC settled similar cases with Apple and Google. But Amazon chose to duke it out. The Seattle company was found liable for the in-app purchases in April.
Since Apple, Google and Amazon, as the proprietors of their respective app stores, get a piece of the action \u2014 typically about 30% \u2014 it\u2019s understandable why Amazon chose to litigate over in-app purchases. The company argued that app users were well aware that real money was changing hands.
The court saw it differently. \u201cGiven the design of the Appstore and procedures around in-app purchases, it is reasonable to conclude that many customers were never aware that they had made an in-app purchase,\u201d it ruled.
An Amazon spokesman declined to comment. As a result of the FTC\u2019s crackdown, though, all three companies now require a password for in-app purchases or upfront approval for purchases to be made without a password.
David Cole, chief executive of the San Diego digital-entertainment consulting firm DFC Intelligence, said in-app purchases are a response to software pirates ripping off popular games. By making the game free and then nickel-and-diming users with upgrades, game developers are able to maintain a lucrative business without a perpetual fear of piracy.
\u201cI don\u2019t see the model changing,\u201d Cole said.
Peter Warman, CEO of Newzoo, said the same. \u201cThis is the business model of now and the future,\u201d he told me.
Like Kanye, I discovered the phenomenon of in-app purchases through my kid. First it was a game called \u201cClash of Clans,\u201d which involves slowly training an army to battle the digital forces of other players. For those who\u2019d rather pick up the pace, you can plunk down some greenbacks to supply your troops more quickly.
\u201cCan I put $5 on your credit card?\u201d my son asked one day.
\u201cWhy?\u201d
\u201cJust can I?\u201d
\u201cWhy?\u201d
\u201cFor Clash.\u201d
No, he hadn\u2019t just discovered punk rock.
That was my first encounter with the crack-like marketing of \u201cfreemium\u201d games \u2014 free games with premium features. It\u2019s such a successful business model that a Chinese Internet company, Tencent Holdings, paid $8.6 billion in June for a controlling stake in Supercell, the Finnish developer of \u201cClash of Clans.\u201d
My son has since moved on to a new fantasy battle game, \u201c League of Legends ,\u201d whose Los Angeles developer, Riot Games, also has been acquired by Tencent. \u201cLeague of Legends\u201d reportedly generates more than a $1 billion a year in in-app purchases.
We can thank the FTC for compelling Amazon, Apple and Google to straighten up and fly right. Requiring passwords for in-app purchases is an important safeguard. The companies also make a point of disclosing that in-app purchases may be a part of a particular download.
I\u2019d go a step further. An email notification should be sent to the credit card holder any time an in-app purchase is made. That notification should include instructions for shutting off a device\u2019s ability to make such purchases (which can be accomplished by clicking \u201csettings\u201d for the gadget or app store).
Like Kanye says, \u201cLet\u2019s go on a living spree … they say the best things in life are free.\u201d
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