The new App Annie-IDC report on portable gaming is out and one graph stands out in particular: According to the report, microtransactions have grown to 51% of total portable game revenue from 40% in just one year. This means that in-app purchases now generate ten times the sales that game advertising does and notably more than pre-paid games across both smartphones and consoles such as the Nintendo 3DS and the PS Vita. More →
According to a new report from research firm IDC, annual mobile app downloads are expected to jump from just 10.7 billion in 2010 to 182.7 billion in 2015. The company noted that that developers should keep a close eye on in-app purchases as the primary focus for monetizing applications – a far different approach than the standard method of relying on the initial app purchase. “This shift is most evident in the free app category, where in-app purchases allow users to buy a more functional version of the app or to turn on additional features,” the report said. “In this instance, the mobile apps space is largely emulating the success of mobile games that have long incorporated in-game purchases of additional levels, features, and functionalities as a key revenue source.” IDC argued that ad-supported applications and those that offer in-app purchase options must continue to keep users attracted over time. “The user sustainability trifecta of social networking, location, and the cloud are now increasingly being supported by the business model financial trifecta of application store purchases, in-app purchasing, and in-app advertising,” said Scott Ellison, vice president of mobile and connected consumer platforms at IDC. Read on for the full release. More →
A firm called Lodsys has been targeting Apple and Android developers that it believes are using its in-app purchase technology illegally. Despite Apple’s efforts to argue that its developers are covered under the same license, Lodsys doesn’t appear to be letting up anytime soon — it’s giving developers 21 days to cough up licensing fees before it files lawsuits. In a few recent blog posts, Lodsys explained its position on the matter:
[Apple's] letter was very surprising as Apple and Lodsys were in confidential discussions and there was clearly disagreement on the interpretation of the license terms of Apple’s agreement. Before, during and after these interactions, Lodsys has carefully considered this issue and consulted several legal experts to consider Apple’s claims. We stand firm and restate our previous position that it is the 3rd party Developers that are responsible for the infringement of Lodsys’ patents and they are responsible for securing the rights for their applications. Developers relying on Apple’s letter do so to their own detriment and are strongly urged to review Apple’s own developer agreements to determine the true extent of Apple’s responsibilities to them.
Lodsys is so confident that it has the upper hand in this legal battle that it’s offering developers $1,000 if courts rule that Apple’s license does, in fact, cover them. According to MacRumors, the developers currently being targeted include Combay, Iconfactory, Illusion Labs, Machael G. Karr, Quickoffice, Richard Shinderman, and Wulven Games. Google has yet to respond to Lodsys’ complaints against Android developers. More →
Earlier this week we reported that a firm named Lodsys had started to send out letters to Apple developers claiming that they were infringing on a Lodsys patent related to in-app purchases. Apple stepped in and claimed that, since it licenses Lodsys’ products and services, its developers were also entitled to use the technology. Now it appears that Lodsys is also going after Android developers for the same reason. “We recently implemented in-app purchases for our Android application and several weeks later we received a letter from Lodsys, claiming that we infringed on their patents,” one programmer said in a Google forum. It is unclear how many Android developers have been contacted, and Google’s Android team has yet to respond, but we hope the search giant backs its developers the same way that Apple did. More →
A Pennsylvania man has filed a class action lawsuit against Apple in a U.S. District Court in San Francisco alleging that the firm deliberately targets children with free applications that have appealing in-app purchases. Garen Maguerian believes that kids are purchasing in-app content and unknowingly costing their parents bundles of cash. In-app purchases are a great way to purchase extra content, such as levels or characters, in games. However, games such as Smurf’s Village or FarmVille can charge up to $99.99 for extra content that can be used to advance further in the game. “These games are highly addictive, designed deliberately so, and tend to compel children playing them to purchase large quantities of Game Currency, amounting to as much as $100 per purchase or more,” the suit says. Maguerian believes Apple is fostering these actions by allowing children to buy currency with the same iTunes App Store password they use to download free games. Since minors are entering the agreement with Apple to pay-up, Maguerian thinks that the contracts are not valid. “Apple has not offered to return to its account holders any of the millions of dollars it received from their minor children’s purchases,” Maguerian said in the lawsuit, which he is seeks refunds (including interest), damages, and legal fees. More →
Google announced on Friday that it will launch in-app billing for the Android Market next week. In-app billing will allow users to purchase more content directly within an-app — sort of like when you drop your entire allowance to buy more berries in Smurf’s Village on the iPhone. Google also said that developers can now begin testing in-app billing by uploading apps to the Developer Console, and developers can also create catalogs of in-app purchases, set prices, and then test the actual transaction process. Hit the jump to read more directly from Google’s Android Developers blog. More →
On Tuesday, we reported that Sony’s eBook reader app for iOS had been rejected by Apple. The reason Apple gave for the rejection was that Sony’s app violated an app store policy — one that has historically not been enforced — dealing with apps that offer content for sale through means other than Apple’s in-app purchase mechanism. By using their own distribution systems, developers have been able to sell content from within iOS apps without having to pay Apple’s 30% commission charged for iTunes-based in-app purchases. An Apple spokesperson later gave a comment, stating that Apple is “now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase.” Following the ordeal, The Wall Street Journal on Wednesday reports that developers have begun to receive notices that apps in violation of this policy will be rejected starting March 31st. This could mean existing apps like Amazon’s Kindle eBook reader, which sends users to a mobile website in order to make purchases, could run into problems unless they are updated to offer content through iTunes. According to the Journal, the only exception to the rule that will be made is for publishers wishing to give print subscribers free access to an iPad edition. More →
Research In Motion on Wednesday announced a new version of its on-device software store for BlackBerry smartphones, BlackBerry App World. Version 2.1 brings several changes to RIM’s app store — the most notable of which is the introduction of an in-app payment mechanism. BlackBerry app developers will now be able to offer digital and virtual goods to users from within their apps, and payments will be taken and processed by RIM’s new payment service. A related SDK has been released to developers, allowing them to build the new in-app purchase functionality into their existing apps.