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Just as there's no such thing as a free lunch, quite a few apps out there entice you with a gratis download price tag, then ensnare you with the allure of in-app purchases. And in-app purchases are very big business; Pocket Gamer, using stats from Juniper Research, reports that in-app purchase revenue will double to $4.8 billion by 2016. Forget apps for a moment: That's enough money to buy a $300 iPhone for 16 million people.
Considering that as recently as 2009, in-app purchases didn't even exist as a market within the world of smartphone applications, these figures demonstrate just how much money otherwise frugal folks are willing to spend just to get an advantage in a favorite game. As some observers have wryly noted, in-app purchases are basically "cheat codes for sale" in the gaming world.
Which in-app purchases will set you back the most money? We've investigated some popular applications and the in-app purchases they offer to give you an idea how much money's at stake — not just for the app developers, but also for you and your pocketbook. Meanwhile, keep in mind that free apps are the portal for most in-app purchases, and will cost you in other ways as well … like in battery life. New Scientist reports that up to 75% of the energy your phone uses on free apps is spent serving up ads or tracking and uploading user data. (Ironically, you might have to click through an obnoxious ad display before you can read the New Scientist article.)
Rating: 4.5 stars, current version (2,595 ratings)
In-app Purchase Price Range: From War Buck Pack A ($1.99) to War Buck Pack F ($99.99)
War on Your Wallet: Remarkably — and we're not making this up — there's an in-app purchase for this game of intergalactic criminals and operatives that will set you back about $500; the Kraken costs 3500 war bucks, which in turn will cost you $488. What is the Kraken, you might ask? "If annihilation had a portrait, it would be of you, holding this gun, screaming, as every living enemy within a mile was vaporized in an instant," according to the Gun Bros. armory guide. Nice. If monetary annihilation had a portrait, it would be of you, holding your iTunes store invoice, screaming as every living financial advisor within a mile laughs her head off.
Rating: 5 stars, current version (13,186 ratings)
In-app Purchase Price Range: From a handful of smurfberries (99 cents) to a wagon of smurfberries ($99.99)
High Rent Smurf Turf:
Those of us who've always suspected that the too-cute Smurfs were in fact evil now have some supporting evidence. With a few clicks, your unsuspecting son or daughter can purchase a wagon of smurfberries for one cent shy of $100. That's what happened to one mom, as detailed in her Practical Mom Guide blog: "How much trouble could a three year old get into with a Smurf game on the iPad? It turns out, plenty. We became the proud owners of two bushels and a wagonfull of smurfberries. All of which became ours at the price of $127.17." Luckily this mom got a refund, but not without learning a potent lesson: Smurfberries are hazardous to your monetary health.
Rating: 4.5 stars, current version (903,942 ratings)
In-app Purchase Price Range: From a 2,500 coin pack (99 cents) to a 250,000 coin pack ($19.99)
Temple Run to the ATM: While the price tag on in-app purchases isn't as steep for this treasure-hunting adventure game, it's become so enormously popular (at one point the top free iOS App Store download) that you can bet lots of kids are emptying Mom and Dad's bank account almost invisibly by buying the coins they need to earn "power ups." If spending money to get play money is so popular, it's about time a savings expert invents a game where kids get real stock options for exhibiting delayed gratification and refusing to pony up for funny money. Meanwhile, the math: With more than 20 million downloads on Temple Run, assuming only 1% of users spend $20 on in-app purchases, that's revenue exceeding $4 million. Cha-ching.
Rating: 4 stars, current version (9,425 ratings)
In-app Purchase Price Range: From 24 gems ($2.99) to 580 gems ($99.99)
A Milkshake-Down?: The number three top-grossing app of 2010, Restaurant Story challenges users to design their own dream restaurant and show it off to friends. And while the app is still very popular, of late it has fielded quite a number of complaints from Apple users about the proliferation of ads (which reportedly slow the game down) and how the game tempts kids to make in-app purchases. One user writes: "[This company's] apps are structured to trick the users … to believe they are using credit or points earned … to expand the features of the site." With the money kids spend here, they might be better off pooling their funds and opening a real restaurant chain.
NBA Game Time 2011-2012
Rating: 2.5 stars, current version (205 ratings)
In-app Purchase Price Range: From NBA Game Time Plus ($4.99) to NBA League Pass Mobile ($24.99)
Blocked Shot: This app helps you track NBA action and is not so much a digital game as an app for following the real-life game. Users gain access to NBA contests by making an in-app purchase for video streaming. Trouble is, many users complain that this option doesn't work well, making the in-app purchase not just costly, but ineffective. But at least the NBA folks are offering an option with some potential practical value. Here's hoping the NBA folks get the bugs worked out, as $24.99 for following game action is a lot cheaper than whatever Comcast, Time Warner, and the like charge for cable these days.
Remember that free apps are too often free for a very good reason: the programmers want to get you hooked on the game or utility they've designed, hoping the resistance to purchase something within their virtual world melts into blind impulse on your part. You may think you're too smart to pay real money for fairy coins in cyberspace, but the statistics suggest otherwise. The in-app purchase business is exploding, and while there's nothing wrong with spending 99 cents here and there, parting with $500 to buy a nifty planet vaporizer that only works in a cartoon world is just plain dumb. For that kind of lucre, you could buy all the apps you'd want (at full price) along with a new iPad to operate them!
Our advice is simple, especially if you have kids: Go into your iPhone, iPad, or smartphone settings now and disable in-app purchases. On Apple devices, go to the Settings app, and then to General category, then Restrictions. There's a button for in-app purchases which you can slide to off.
Once you do, you win: Game over!
Front page photo credit: GigaOm