41 Comments

Summary:

The app business thrives on free games with ample opportunities for in-app transactions. Apparently, that’s something that parents with kids who play a lot of mobile games still haven’t learned.

ClashofClans

Another day, another parent outraged because her kids racked up thousands of dollars through freemium in-app purchases.

This time, the shock of a lifetime went to a mother in Canada, whose seven-year-old twins racked up a $3,000 bill playing SuperCell’s blockbuster free-to-play app, Clash of Clans. She claimed she thought the app was free, and that the boys continually put in her user password to download in-app currency in $99 chunks without knowing better. She was mad at Apple, and wanted them to crack down for “safety.”

Parents: In-app purchases have been around since 2009 — Apple’s no longer at fault for your children spending your money.

The unwitting purchase of in-app currency through freemium games was a thing back in 2010 — our own Kevin Tofel even experienced sticker shock. A class action lawsuit for parents was filed in 2012, but by that time Apple had already introduced a purchasing barrier in an update to iOS 4 that required re-entry of passwords for purchases. Three years ago, outrage was reasonable, but now it’s ridiculous.

To put it simply: nowadays, free mobile games are never really free. Research by Flurry indicates that 90% of apps in the iTunes app store are free to download, and that more users are likely to download a free app than a paid one. In order to obtain a steady revenue stream, apps rely on both ads and in-app purchases — the latter is common in games available in app stores today.

And that plan is lucrative. According to app analytics company Distimo, in-app purchases generated a record 76% of all revenue in the Apple App store in February of this year, and 71% of that revenue was generated by free apps with built-in in-app purchases.

Free-to-play games are so successful that major companies like Electronic Arts have moved smash franchises like Real Racing and Plants vs. Zombies to that model because it often means higher revenue in the long run than a $3.99 one-time purchase. It allows mobile companies to survive and thrive without the $30 to $75 one-time purchase of console games, and to make more games in the long run.

Parents, it’s time to expect that your child will be bombarded with opportunities to pay for shortcuts when playing free-to-play games. Freemium apps aren’t for tricking people — they’re an effective economic model for an adult user base. If you don’t want your child to purchase in-app, parental controls that cut off purchase power in apps have been available for both the iPhone and Android for years.

If you can’t handle that, then mobile games aren’t the best form of entertainment for your kids.

  1. Even if I haven’t been a victim of in app purchases, I still think Apple are partly to blame since

    1) you need to attach a credit card to your Apple account.

    2) you need to enter your password to download any app (free or not) which makes it hard, nearly impossible to not disclose it to your kids.

    Apple could

    1) remove the requirement of having a credit card on file

    2) let the user specify a daily/monthly limit for the credit card on file

    3) add levels of security, eg. one password for downloading free stuff and another for paid stuff

    There are a lot that Apple still has to figure out when it comes to great product design, it is not just a glossy device and nice OS – usability could be much better.

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    1. Oh please…why is it Apple’s responsibility to prevent a child to not buy in-app purchases? How about you be an actual parent and tell your kid(s) to not do it. I blame parents for not disciplining their kid(s) and letting them get away with murder. What is a kid doing with an iPad/iPod/iPad anyway? Kids are supposed to be outside and playing with their friends and getting dirty, scraped up and enjoying their childhoods. Not cooped up inside with their face buried in a mobile device.

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    2. Lauren Hockenson Tuesday, July 23, 2013

      Ola,

      I know that Apple requires you to have a credit card on file, but it also does exactly what you say. It’s called the iTunes Store Allowance Program: http://support.apple.com/kb/ht2105.

      If a child is independent enough to have his or her own device, the iTunes Allowance program not only allows for a monthly sum to be given for purchases and downloads, but it also allows management via a separate dashboard.

      If a child is not independent enough for those things, then parents run a clear risk by allowing them access to key username passwords and not blocking in-app purchase controls. It’s key for parents to not only understand the mobile climate at large, especially when it comes to free games, but to also make the final decision on the kinds of games their children play on mobile devices.

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    3. Ola,
      Apple does not require credit cards on file. I don’t have one on file, I just purchase $10/$15 itunes gift cards for me and my family members. Problem solved.

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      1. On Ola’s points.

        1. You do not need a credit card or an iTunes card to open an iTunes account. There is a third option of organising payment methods later. The account is opened with no credit.

        2. Just ask your children to look away when putting in your password. That’s what I do. Also change your password regularly.

        “Apple could”

        1. See above.

        2. Don’t see a problem with this, though I doubt many would use it. I could be wrong.

        3. Just another unneeded level of complexity. Also, if you can’t hide one password from your kids, you probably can’t hide two.

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      2. It limits the damage, but only until you top up again. That’s neither convenient nor a solution.

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    4. 1. You can remove your credit card from your iTunes account.

      2. You can setup accounts for your children with an allowance that has limited funds and is not connected to a credit card.

      3. Using parental controls you can turn off in app purchase.

      4. You can put in your password for your kids instead of telling them what your password is.

      Apple has done all of this and you still want Apple to be responsible. How about parents get off there ass and be parents and take resonsablity for what there kids do.

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    5. Tipton Stiehmay Sunday, July 28, 2013

      You don’t need to attach a credit card to your iTunes account. I only use iTunes gift certificates for my kids account. You can also setup monthly allowances. My 7 year old doesn’t know the password to his account, I enter it when needed so I can control what he does in the app store. That’s means that he has to wait until I am available and I agree to the purchase before he gets anything.

      Apple has given parents the amount of control needed to manage their children’s iTunes usage. Parents need to use the tools they have.

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    6. First you can remove your credit card. You can add a gift card or add a monthly allowance. Don’t forget you can add the restrictions on your device right away. Parents should read up before giving their children access to their device. Developers add the apps on the App Store.

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    7. You do not need to have a credit card on your iTunes account.

      You can set in app restrictions on your account which prevent in app purchasing. The steps are right in the terms of sale. You can also set it so you need to enter your password for every purchase.

      So here is an idea. If you are spending the money to purchase an iOS device read up on how to use it. And don’t like your 4 year old pay with it.

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    8. Apple does not require a credit card on your account – just go into your billing information and set credit card to “None” – it’s that easy. You can use iTunes Gift Cards, or re-add and remove your credit card when you want to purchase.

      Add levels of security- they’ve done that. go into settings, set up restrictions. It adds a second, separate password that must be entered before the restrictions can be removed – you can restrict any or all content types, including in-app purchases.

      Let the user specify a daily-monthly limit – that exists too! Just have your kids set up their own account without a credit card – you can then use your account to create a monthly allowance – it charges the card on your account and sends that amount as store credit to your kids account.

      Your lack of research into the options is not Apple’s fault – they have online walkthroughs that go through all of those options and explain them. But each and every suggestion you made has been implemented by Apple years ago.

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  2. Exactly! Well put.

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  3. Lauren,
    i’m too tired to respond in kind to this. But you seem to not understand several fundamentals of programming, kids and human computer interaction. What you are championing isn’t a failure of parents, which does happen, but instead some fundamental underlying omissions in the design and implemtation of HCI of the mobile OS design. Which seem to often favour the developer businesses and not the individual users. Lets call a spade a spade, but having in app purchases of +£75/+$100, or the like, has to be balanced against the reality of users and their abilities – or HCI.
    It’s time for a sensible debate on this, not lampooning parents that don’t understand the intricacies of embedded and nested control functionality!
    PG

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    1. Lauren Hockenson Tuesday, July 23, 2013

      PG,

      I understand your criticisms, but Apple’s control over HCI is limited simply to the function of the iTunes Store, not the games involved.

      While I agree with you that there’s a level of disingenuousness when gaming developers even give the option for in-app transactions costing $99 USD (which is the micro-transaction cap Apple has on developers), that’s at their discretion and not Apple’s.

      What I’m suggesting in my article is that parents need to have the knowledge of what games are out there and why micro-transactions pose a problem, and utilize the tools already in place to make an informed decision. You’re right, kids will never be able to recognize when 100,000 Farm Bucks equals $99 USD. But in that case, just turn it off.

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      1. ceruleanstarshine Wednesday, July 24, 2013

        Exactly! It is not the developer’s responsibility to track what your children are purchasing via the app. They have a goal–make money for the work they put in. You can disable in-app purchasing or require it to have a password.

        Lauren, I think your article is spot-on.

        PG: In response to your comment, “not lampooning parents that don’t understand the intricacies of embedded and nested control functionality!” this is what I have to say:

        If the parents do not understand the intricacies of the control functionality, they shouldn’t be using the device at all, let alone handing it off to a small child to play games on. Parents have a responsibility to understand the nuances of the technology they are equipping their children with, and that includes devices that allow in app purchasing and game play. Additionally, the iPhone/iPad and many other devices all come with instruction manuals. If they don’t, there are manuals and how-to-use tutorials online for free, all over the internet. The knowledge is out there, it is the parents fault if they don’t look for it to inform themselves and protect themselves and their children.

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    2. It is simply a crime to charge $99 and more for virtual goods. Period.

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      1. As software developer is a crime to sell games for 1$, ether via in-app or as natural cost of the app. 99$ are a way from which, so often, rich people or truly engaged users want to say thanks: 99$ is the right cost considering that more than the 95% of the users usually do not pay at all for a free game. The 99$ option is like a “donate” button.

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    3. Here’s an idea, set up Parental Controls so that in-App Purchases are disabled or, even better, DON’T GIVE A LITTLE KID YOUR iTUNES PASSWORD.

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  4. All those typos… You don’t have editors?

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  5. Jamie Anderson Tuesday, July 23, 2013

    Well, I never heard of the itunes store allowance program until now. I suspect they aren’t doing much to promote it, much like cell phone companies don’t make it known that you can turno off premium sms services. As a retailer of these apps itunes has a responsibility to make sure that they’re not a con, and clearly some of these in app purchases are.

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  6. drop the iPhone and use a really really dumb phone- problem solved

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  7. People don’t make mistakes, system designers do. A system that charges people $99 for worthless content, not once but repeatedly, is a scam. Apple should put an end to this for good.

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  8. Take away the damn smartphone, and give the kids a ball to play with. Maybe the exercise will do them some good.

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  9. If you feel your child is old enough to use a device that allows them to connect to the internet (which can be a very unpleasant place for children if they end up in the wrong places), then surely you should also feel they are able to distinguish between free and paid. If they can not tell the difference, then they should not be allowed to use the internet unsupervised (for their own safety), it is that plain and simple!

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  10. This article represents a lot of what’s wrong with the tech industry.

    As a professional who deals with training the general public on how to use their tech I can tell you that the majority of people are hanging on by their fingernails when it comes to their tech.

    They don’t have a clue what in-app purchases are, what settings are ( yes – they don’t knew what the gear icon does), or what double tapping the home button does.

    People pay me to set them up with an email account and they are happy to do so because it is so confusing. My business cards have a cheat sheet of ctrl-a,z,x,c,v and cmd-a,x,c,v,b on the back and so many people thank me for such a useful tool.

    They have unsecured wifi because they can’t figure out how to connect their computer, and when I show them right-click it’s as if I showed them the secret behind a Copperfield illusion.

    There is NO WAY that these customers can navigate the nuances of keeping their kids from doing in-app purchases for the same reason that they don’t know how the 15 toolbars and McAffee Secadware got on their PC.

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    1. Peter H Pottinger Wednesday, July 24, 2013

      Yup I’m a web developer and 50% of my time is spent simply on making the interface useable for the “layman”, it means

      1. making the interface simple
      2. hide the complexity but it has to be there in this case preventing iaps if your 8yr old is using the phone

      its so friggin simple its almost stupid, but you have to understand apple is a profit driven money making machine, they aren’t in the business of helping their customers but rather helping their shareholders which in many cases devolves to the same thingbut not in the case of protecting children with no concept of money ..

      another example of a stinking corp

      p.s. multiple accounts on the phone that switch depending on the unlock code. holy shit did that just blow your mind? its a 30yr old concept

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