Some time back, we mused about How to Make Money Giving Apps Away. One suggestion was to give app users the “opportunity” to buy upgrades, weapons, etc. – what some call the “freemium” marketing model for mobile apps. Much has been written about freemium marketing and many mobile apps have been launched using it. In-app purchasing is available for both iOS and Android apps, although Android app developers have had to offer this feature using proprietary solutions or third-party providers such as PayPal. Apple began offering in-app billing in October 2009.
Wired.com’s Gadget Lab blog recently included a post by Christina Bonnington about Google’s launch of in-app billing for Android apps. Ms. Bonnington suggested Google’s in-app billing solution may change the way Android apps are monetized:
“Perhaps the in-app billing system will help rejuvenate Android’s historically sluggish app sales. By lowering the barrier to entry — offering apps for free or at significantly reduced prices — more users may be willing to download apps, then make additional purchases within the app later on.”
Here’s a link to Google’s February 2, 2011 announcement for in-app billing, in which Eric Chou observed that Google’s in-app billing system will provide users “a consistent purchasing experience with familiar forms of payment across all apps” while giving developers full control over how their digital goods are purchased and tracked.
Will this new development in in-app purchasing spur Android app development? It appears so. Engadget reported that Trendy Entertainment changed the price for its Dungeon Defenders: First Wave game to … free on March 29, 2011, the same day Google’s in-app purchasing system went live. Dungeon Defenders fans can now use in-app purchasing to buy pets, armor, equipment, and in-game items. Other Android apps using the new in-app billing system include Tap Tap Revenge, Deer Hunter Challenge HD, and WSOP3. An April 3, 2011 report from Appolicious put Tap Tap Revenge 4 at the top of the Android game list. Coincidence? Maybe, but we think not.
If use of in-app purchasing for Android tracks use of in-app purchasing for iOS (and there’s really no reason to think it won’t), look for a lot of free Android apps with this function. In October 2010, Mashable reported that in-app purchases in iOS apps generated eight times the revenue of mobile ads. Google’s new in-app billing system should do the same thing for Android apps.