As had been expected, the Federal Trade Commission sued Amazon, alleging that the online retailer made it too easy for children to make millions of dollars' worth of unauthorized in-app purchases on its Kindle tablet devices. The FTC wants to make Amazon refund money spent without parental permission and to stop Amazon from allowing in-app purchases without requiring a password or other mechanism that gives parents more control.
As developers have shifted away from a monetization model based on paid downloads to "freemium" or free to play approaches, many of them are looking at in-app purchasing (IAP) as a better way to create a revenue stream for their work. However, there's one major concern that could drag on both big and small app vendors: in-app fraud. Special report
Amazon said it is prepared to go to court with the Federal Trade Commission rather than submit to increased oversight and other measures the FTC says are needed to ensure children do not make unauthorized in-app purchases from apps in Amazon's Appstore.
It's becoming conventional wisdom that paid downloads are out and the freemium model is here to stay, but half of the revenue from in-app purchases come from a meager 0.15 percent, according to Swrve's Mobile Games Monetization Report.
Whether you work in San Francisco, New York or anywhere else in the U.S., the place app developers should be thinking about most is China, according to a recent report from InMobi. The company released the results of recently-concluded research, based on a survey of both U.S. and Chinese consumers, on its blog.
Keep iOS apps free but offer some opportunities for consumers to open their wallets once they're engaged: that sums up the main takeaways from Distimo's recent research report: "How The Most Successful Apps Monetize Their User Base." The Netherlands-based company, which provides an app store analytics tool, looked at the highest-grossing 250 apps in Apple's App Store in February that have been released in the last year.
As developers continue to weigh the pros and cons of offering in-app purchasing in the mobile games they create, Apple's decision to settle a class-action lawsuit over the use of IAPs by children for $100 million sparked considerable disagreement across social media about how well consumers understand the way they work.
Instead of viewing customers as just part of the mass market, new developer tools help highlight individuals with unique needs, expectations, tastes and potential for engagement. While most developers don't have the technology or manpower to deal with people on a one-on-one basis, they may be able to sort users in a more knowledgeable way. This, in a nutshell, is mobile app audience segmentation, and it's an industry segment that's likely to mature significantly in the next few years.
Android developers may be starting to catch up with their iOS counterparts in winning over customers, based on a global survey of app store activity over the last four months of 2012.
According to a recent research report, small transactions in mobile games, ranging from 99 cents to $1.9, accounted for only six percent of total mobile game revenue. In contrast, close to half, or 47 percent, of in-app purchases were for relatively big-ticket items, costing $9.99 to $19.99.