In-App Purchases have earned quite the bad reputation since they were first introduced to the App Store with iOS 3 in 2009. Their addition to the Mac App Store was met with dread and foreboding that it’d spell the end of quality paid apps in the wake of freemium apps filled with ridiculous in-app purchases. That hasn’t happened on the Mac yet, but on iOS, it seems like the traditional paid market is eroded more and more every day by free apps with in-app purchases.
The bad reputation is undeserved, though. I’m as critical of apps with in-app purchases as anyone could be — their very presence on free apps makes me skip the app by default unless it looks very impressive otherwise. But they don’t have to be bad.
Right now, the Mac App Store has escaped the worst of the race to the bottom in app pricing, in large part thanks to the fact that Mac developers can still distribute free trials to their apps on their own sites. It’s on the iPhone and iPad that in-app purchases have taken over, with a vengeance. Smartphone apps, perhaps, aren’t the best thing to compare to Mac apps, but iPad apps surely are fairly easily to compare, since many people today use iPads as laptop replacements. If in-app purchases are to be the future of app sales — especially on the Mac — they’d better be done right, and the best iPad apps with in-app purchases today are the best examples of how in-app purchases can be done well.
Paid apps aren’t dead, but in-app purchases are still going to be a big part of the app discussion going forward. Here’s what they need to make them work in a way that’s equal to or better than the traditional paid app market.
Exhibit 1: Paper
Pay for Tools
Paper has, hands-down, the most interesting in-app purchase model yet. The app is free with the initial pen and basic color palate, and then charges for each extra tool you want — or lets you buy them all as one set. You can try out the extra tools from the purchase page to decide if you want them first, and buy them anytime. Casual users will likely love the app for free, or perhaps want to at least buy the color mixer and one extra tool, while pro users will want the whole set. Either way, everyone gets a great app and the Paper team has a way to make more revenue going forward — add more tools that we’ll all want to buy.
Take one second to peak at Apple’s developer page about in-app purchases. Notice which app’s featured with a screenshot? Yup: Paper. Something tells me that Apple would love it if more apps found ingenious ways to use in-app purchases like Paper. I for one would love to see more apps with that — maybe it’d be silly to pay for each feature in Photoshop, but it’d sure be awesome to get the dozen features you need without having to pay for the whole shebang unless you want to. Byword 2 already added something similar on the Mac with an in-app purchase to let you publish articles from the app, and it’ll be very interesting to see more apps experiment with this model going forward.
Exhibit 2: MoneyWell for iPad
Pay for the Full App
When Marco Arment wrote that paid apps are dead, Kevin Hoctor countered with a post about his team’s strategy for MoneyWell for iOS’ pricing. Essentially, the app is free and lets you use all of its features to manage one account, and then you’ll have to pay to unlock the full app to add unlimited accounts. It’s almost like the old free 2 week trials, except this time, it gives a full, functional app to people who have the most basic needs, and also lets anyone else try that simpler version out for free before shelling out for the full version.
For every app that can’t find a way to sell directly upfront like apps traditionally have or charge per feature like Paper, this is the business model I happen to hope they adopt. It’s straightforward, obvious, and won’t make anyone feel like they were ripped off by in-app purchases. Plus, I think it could scale for apps that otherwise might not make enough money — think what Sparrow could have done if they charged per account, or how Tweetbot could, perhaps, be cheaper up front if it charged per account you added. That model could really be interesting, by letting those who use the app the most pay the most — something that definitely makes sense.
Exhibit 3: Evernote, Droplr, CloudApp, Dropbox, and Practically Everything with In-App Purchases on the Mac
Pay for Services
Did I say in-app purchases haven’t gotten a foothold in OS X yet? My bad. Actually, there’re already a part of many apps we love on the Mac, even if they’re not always done directly through the App Store. And odds are, you’re already paying for at least one each month.
The subscription model has taken the world of pro software by storm this year, with both Adobe and Microsoft switching to subscriptions for their app suites. That’s surprised and even angered many. But we’re already used to paying for extra storage space in online storage apps like Dropbox, Droplr, and even Apple’s iCloud. Evernote’s paid subscription brings some extra features, but the main reason you’d upgrade is if you really want to upload more data each month.
99.9% of web apps offer basic features for free, with a subscription for the pro version. It’s worth it if the app’s valuable to you, especially for business use, as I’ve found with Buffer. Expect more apps — especially productivity and professional apps — to experiment with this business model, as Billings Pro already has this year.
It works. I’ll admit that much. It’s the model enterprise software has used for quite some time. But I happen to hope — seriously — that most apps don’t take this route. There’s only so many subscriptions our budgets can take each month, and I still vastly prefer the in-app purchases models that closer resemble traditional app licensing. Subscriptions at least aren’t as sneaky as the evil game in-app purchases, but they’re still easy for consumers to forget about — something that we’re all going to have to be a lot more careful about.
The not-so-good: EA
Pay for upgrades
EA’s won the ire of gamers the world over, by switching most of its games to the freemium, in-app purchase model and entirely breaking some of their biggest releases of late (hello, SimCity). That ire’s entirely deserved for the most part.
But there’s one thing that EA’s managed to do better than many others: they’ve made in-app purchases that aren’t nearly as scummy as most freemium games these days. Really. You can very easily play, say, Real Racing or the new Plants vs. Zombies 2 without spending a dime on in-app purchases. Most of their in-app purchases do one of two things: speed up the game or let you purchase things (say, new cars that last forever in the game) that you could otherwise purchase with coins you win in the game. The first purchase option is decidedly on the evil side, in my book, but the latter is a perfectly legitimate way to upsell the game, especially a free game.
An early iPhone game from Iconfactory, Astronut, used in-app purchases to unlock levels in the otherwise free game, which essentially just made the game a free trial with a way to unlock the full game. That’s not bad at all. EA’s not done that good with their in-app purchases, but they’re decidedly not as bad as in many games — and hey, selling extra levels or cars in a free game sure isn’t as frustrating as their games that sell stuff in a paid game.
The Evil™: Most Top-of-Charts Free Games
Pay for every. single. thing. And then pay for them again. And again.
Here’s where evil itself dwells in the App Store: the free-but-top-grossing charts. Everything there’s not evil, granted. But Candy Crush? You have to pay to play once your time runs out, pay to get power ups, and that’ll only get your through the level you’re stuck at. Next time you’re stuck — or just play for a longish session — it’s another $1.99 or two.
You’re not paying for features, you’re paying to simply use the app — every single time you use the app, if you’re not playing frugally. You could argue it’s no more evil than paying a quarter to play a video game machine a decade or two ago, but you only have to Google stories of parents trying to get out from under multi-hundred-dollar charges their kids racked up on similar games to figure out that they’re preying on the least of these. That’s evil, in my book.
There’s a very fine line between games that fall in the previous category or this one — they’re both what has given in-app purchases a bad name. I hate to see both of them making their way to the Mac App Store, but they have already in a handful of top-grossing games.
Charge a subscription for your game like WoW, if you want. Charge per level, perhaps, or charge to unlock features for the entirety of the game. But the timers you have to pay to turn off each time, and the coins you’ll use up as quick as you hit Buy? No. There’s no way that’s how software should work. It’s gambling without any reward other than dopamine and a pretty on-screen animation at best, and outright deception and robbery at worst.
Replenishable in-app purchases — things you can use up in-app — are the worst type of in-app purchases, and are absolutely the reason they’ve gotten such a bad name. If there’s one thing I’d love to ask Apple to do, it’d be to remove replenishable in-app purchases — yes, the very type featured on this article’s icon. That’d get rid of the vast majority of these scummy practices.
The Passive: Ads
Paying with your time
It’s not in-app purchases, but it’s the only other business model beside the old, traditional pay-upfront model, and its one that’s already used in Apple’s own iTunes Radio and in most free web apps. In web apps (and sites like, cough, AppStorm) or a very few Mac apps, you’ll find ads in the lower corner or sidebars of the app. Or, as is more common in media apps like iTunes Radio or, say, Hulu, you’ll have a full commercial that forces you to watch through it before you’ll get to your content. It pays the bills, keeps stuff free, and doesn’t take anything out of your wallet.
And that’s fine. But — especially in apps where the ad takes over the entire interface — I think there should always be an option to pay — one time or a subscription — for an ad-free interface. Imagine if Photoshop was free but with a 30-second commercial spot ever 15 minutes or so. Hobbyists would likely continue using the ad-sponsored free version, but design pros would be glad to pay to get the ads away. An iTunes Match subscription takes the ads away from iTunes Radio, and Hulu loses most of its ads with Hulu Plus. Same goes for most web apps — and if any Mac apps switch to an ad model, they’d better do the same if they want to not hit my evil list.
The Future
Software costs money to make. Great software costs a ton of money to make. And we love great software, enough that most of us on the AppStorm team spend quite a lot out of pocket on apps we use in our daily work and play.
But most people don’t want to pay for software, and to have a hit app, you need to get most people using it. Plus, even those of us who love software are cheap to our own degrees, and no one can afford everything. So we’ve got to hit a middle ground. In-app purchases can provide that middle ground in a way that makes software more accessible for everyone, but they can also make the world of apps feel like a flea market run by con artists. That’s definitely not the future of tech we all want.
So here’s our plea to app developers the world over: please pick the best ways to do in-app purchases if you must do them. Charge us subscriptions, even, over the nickel-and-diming of most freemium games these days. And if you can at all, find business models that are the closes to the traditional paid app models, perhaps using the idea of paying per account if needs be. And most of all, make great apps. There’s still plenty of us that’ll buy them.
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