New “In-App Purchases” label in iOS 7.1.1 again highlights problems with the App Store

in-app purchasesI’ve written before about how the App Store could be improved and, as of yet, nothing I offered in that piece has been implemented.

While no one expects major redesigns or reworkings of the App Store in a dot release of iOS, a minor amendment in iOS 7.1.1 has again highlighted an area where the App Store is disappointing: In-app purchases.

As you may have noticed, in the App Store on devices running iOS 7.1.1, apps that utilize in-app purchases are now highlighted in the Top Charts screen as seen in the image above. The App Store previously made reference to the presence of in-app purchases in the individual app’s page, but the note in the Top Charts page is a new development (possibly following recent legal action regarding IAPs and a subsequent refund policy).

Regardless of Apple’s reasoning, the new “In-App Purchases” label resurfaces the issue of misuse or overuse of IAPs in the iOS App Store. At the time of writing, half of the top ten Free applications here in the UK contain in-app purchases. What’s more worrying, perhaps, is that 33 of the 35 Top Grossing applications (the ones that make the most money) contain in-app purchases. These numbers show a general trend towards freemium, and now “paymium”, business models for generating revenue and it clearly works.

My question is: what happened to just paying for an app and having access to all the features for a set price?

A couple of obvious answers are the lack of free trials and upgrade pricing on iOS. In the app economy, users are fearful of paying a few dollars up front in case the app is a disappointment. Many argue that free trials would eliminate the need for free apps with functionality locked behind IAPs or separate, Lite versions of apps.

Users have also come to expect app updates for life from developers and seemingly fail to see the the time and money invested by the app developers and their need to make a living. In-app purchases provide a way to earn money after the initial download, giving apps some longevity. However, simple upgrade pricing for new versions of apps, although open to abuse too, could alleviate the need for in-app purchases in many cases.

I’m not calling for a complete removal of in-app purchases — they are, in fact, useful in some cases. Instead, some measures that provide app creators with other ways to sustain an app’s development so that IAPs are not the de facto money generating tactic employed. The presence of the “In-App Purchases” label simply draws attention to this problem again and shows that it needs to change.

Whatever the solution, the updated App Store in iOS 7.1.1 brings the issue to the attention of all iOS users yet again. I hope Apple has some plans for the App Store in iOS 8 to be revealed at WWDC in June.

What do you think? Are in-app purchases too prevalent in the App Store or are you a fan of the freemium model? Let me know in the comments or on Twitter: @TiP_AdamO.

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  • http://www.joshspadd.com/ Josh Hrach

    I hate how popular the freemium model is. I can see the value of it, but sometimes it’s just a trap to get people’s money after getting someone hooked on a game.

    Like you said, I’d rather pay for a game outright. I understand using an IAP as a way to add more content. For instance, I agree with the IAP usage in the Lego Star Wars app. You essentially either pay for each episode or one fee to unlock it all, which is comparable to opening up the entire game in my mind.

    I also think IAP are great if you’re a game developer and have added an entire new set of functionality that might normally be reserved for a game expansion. It’s a shame that’s not the limit of IAP usage in game apps.

    • Adam Oram

      Yeah, there are certainly some valid uses for IAPs. But I can’t imagine the state of the App Store currently is quite what Apple had in mind when first creating the IAP option.

      Something needs to change. I wholeheartedly agree with developers making money from their apps, but over/misusing IAPs isn’t the right way in my mind. Apple is the only one who can make that change – developers can only work with what they’ve got.

    • AussieB

      IAP often provides hints or extra features to advance in the games. The fact people pay for that is puzzling. The other thing is many can make a lot more from iAPs than a 1.99 or even 4.99 game. People paying $1-2 bucks at a time don’t realize how much theyre spending. Ive never played Candy Crush but seeing how people are spending so much money on that ‘free game’ is mind boggling

  • Michael

    What exactly is the problem with them? You just don’t like seeing so many?

    • Stephen Warwick

      For me, I’d much rather pay up front for an app, rather than have my experience limited by the freemium model.

      • AussieB

        plus many new customers, and kids, don’t understand it. If it has IAP , it shouldn’t even be listed as free. Create a new category

  • darthsanchez

    I wish developers would understand many of us are willing to pay money if we could understand WHAT it is we are paying for. I hate the trend all developers are using of hiding the value of IAP under meaningless names, such as
    Pile of Keys
    Pounch of Coins
    Mega Bundle of Stuff

    all ranging from 99 cents to 99 dollars. What the hell am I paying for and how long will it last me? I can’t make a decision if I can enjoy your game for $3-$5 dollars or if I need to make a commitment and this will be a $50+ dollar game. I’m willing to give you my money, just be a little more consumer friendly about helping me understand what value I’m getting from words like Trunk, Pile, Bundle, etc. In the past it was so much easier, the IAP we labeled with things like
    Unlock first 10 levels (of 30)
    Get new weapon
    etc.
    Developers, any time I see IAP items above $10 (and even worse, stuff like $39 and $99!!) I don’t even try your game. What handheld game could possibly require $99 to play. If you want that kind of number just be honest and offer a monthly subscription rate.

    • AussieB

      IAP seems a lot more popular on iOS than Android but iOS customers seem to be used to the Apple tax and more willing to fork over cash

      • Michael

        Yep, this is why developers like Apple. People like making money for their work.

  • ArmoredFowl

    I do not see how a trial period for paid apps would be any different than a free app with an in-app purchase. In either case, you only pay once your know you like it and want it.

    Furthermore, having released a game for iOS, people are reluctant to buy games outright from unknown developers. Having a free app with optional in-app purchases gives people the confidence to download and discover new apps that just don’t have the name-presence.

  • AussieB

    I hate in app purchases and will never purchase an app with them. At least on Android, you can get free paid apps (and sometimes IAP) from Amazon and you can also do the Google Rewards app and quickly earn Google Play Store credits as well. I think in total Ive probably earned $15 and Amazon probably over $10…and I don’t usually pay for apps unless its something Im going to use frequently. Get tired of games quickly and many apps you don’t care for after you download.

    I am surprised also (off topic) that at this hour, this blog which is supposedly focused on the iPhone still doesnt have the earning results with the information on the iPhone sales.