In-app purchases in mobile and social games seems to be the latest hot button topic for parents to be mindful of nowadays. Whether it’s £900 in FarmVille or $1400 in Smurfs’ Village, kids seem to be all too quick to accidentally run up a debt on mommy and daddy’s credit cards.
The issue has become so widespread that the Federal Trade Commission is now investigating this new pricing model at the behest of several US senators. We recently spoke with W3i/Recharge Studios’ VP and General Counsel Hayden Creque, a gentleman whose company developed the popular social iPhone game Dolphin Play, about the proactive stance the company is taking to address the issue of in-app purchases head on.
In response to the ongoing problem of accidental purchases in freemium games, you’ve made some significant changes to your processes. Can you tell us what you’re doing to curb accidental spending?
Recharge Studio’s top priority is to provide transparency in all in-app transactions. It is our belief that clear choice, consent and control can go a long way in preventing accidental spending. To that end, we’ve reduced the incremental price points for in-app purchases in Dolphin Play with the highest point now $49.99. In addition we’ve added disclosures to our App Store description and in our application’s terms of service. Readers can view the full disclosure on our blog.
Additionally, going forward, Recharge Studios is attempting to include time based purchase limits if practical for future titles. Lastly, we reached out to Apple expressing our concerns and recommending changes to the in-app purchase process to include password requirements for each and every in-app purchase.
Before implementing these changes, how frequently did you receive complaints about accidental purchases in Dolphin Play, or requests for refunds on in-app purchases?
Because we only have one game released, we’ve had very few complaints. Dolphin Play has been installed a million times and to date we’ve only had a couple dozen contacts to Recharge. Of the million installs, refunds account for less than 1/10th of a percent.
Have the changes you’ve made reduced that number?
It’s too early to tell. While the changes are meant to reduce inadvertent in-app purchases, they serve a dual purpose. The mobile ecosystem is expanding rapidly and creating a great new economic marketplace. But with the rapid growth, those of us innovating in the space need to be prudent and watchful to how the public is receiving and perceiving the changes. We want to make sure we provide insanely great experiences. When we started to see concerns rising, we wanted to be part of the solution and acknowledge that this is the beginning of a new marketplace that will probably see many more changes to come.
You’ve reached out to US Senator Amy Klobuchar of Minnesota to let her know about the changes you’ve made and the position you’re taking. What was the response like?
At this point we haven’t heard back from Minnesota’s senior senator, but as a Minnesota based company with Minnesota employees, we offered to serve as a resource to answer any questions her staff may have on the industry.
Like App Store purchases, in-app purchases tend to require users to enter their iTunes account password. Considering that a login is required before anything is charged, isn’t the onus on the parent to protect their password rather than on the developer to throw up roadblocks between their products and the consumer?
Sure, in business the less friction that exists between consumers and purchase points is ideal. What appears to be the real concern is a misunderstanding of virtual goods/currency and in-app purchases.
Anytime a new product is brought to market, or a new marketplace is created, especially of a digital nature, there needs to be an element of education that comes along with it to ensure people understand and are comfortable in the space. Apple needs to do what it can on their end, developers need to be clear and up front in disclosures and game design, and parents need to know what they’re downloading on their devices and giving their children access. The onus is on all of us.
What’s the best long-term solution to the problem? Does Apple need to step up and change the way it handles in-app purchases?
We’re not going to tell Apple what it needs to do. What we will do is share our experiences on the front line with Apple. The 15 minute window after entering a password that an iOS user has to make additional purchases with little to no verification is concerning to parents. The public is speaking up and we hear them. As the marketplace evolves and matures, it will only become stronger for businesses to innovate, providing users additional opportunities for great experiences.