Update: Big Fish’s Subscription-Based Gaming App Pulled From Apple Store

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By Todd Ogasawara

Update: This was pulled from the app store. Big Fish says they’re not sure why. Daring Fireball’s John Gruber suspects it was an error. We’re not sure as other developers who have talked to us said they were considering pursuing the subscription model in recent weeks, suggesting that such an option might still roll out.

Seattle’s Big Fish Games appears to be the first to jump on the bandwagon of offering gaming subscriptions on iOS , a brand-new way to monetize games on top of advertising, in-app purchases and sales.

Big Fish, which has made several popular paid iPad apps that we’ve covered here, plans to charge $6.99 per month for access to their library of games, according to Bloomberg. An introductory subscription fee of $4.99 per month will be in effect until sometime early next year when it will be raised $6.99.

There will also be a free service, where play will be limited to 30 minutes per day and subsidized by advertising. We’ve reached to Big Fish Games for more details about the economics of such a model and how they’ll decide to charge for different apps, but we suspect we won’t hear back from them until after the Thanksgiving holiday.

The key benefits we see for subscriptions are:

Subscriptions will encourage brand loyalty to developers: Big Fish subscriptions will apparently work like the Netflix app does, where there’s a single app from the developer with many games contained inside. Instead of having to download many apps, users can just jump around from game to game inside a single app. This will encourage users to test out many titles from a single developer, replicating how developers cross-promote one game inside another — except this may have a stronger effect.

Developers could nudge consumers to jump to a slightly higher monthly spending level: We could see developers giving discounts or all-you-can-eat premium currency if consumers sign up for the subscription version. Update: Actually, all-you-can-eat currency is probably a bad idea. After bouncing this off of more developers, we’re hearing that premium or exclusive content on top of in-app purchases might be the way to go. It’s not clear if Apple will allow an app to simultaneously offer subscriptions and in-app purchases though.

But we also see the potential for abuse: Apple and the leading mobile-social gaming developers still haven’t found a perfect solution to the problem of parents being unwittingly charged hundreds of dollars for in-app purchases. While they do get refunds, parents still complain from time to time in comments on this site. We could see the same issue cropping up with subscriptions for games if children use the 15-minute window after their parents enter the iTunes password to sign up for lots of games.

Big Fish said it generated $140 million in sales last year and may be considering an initial public offering, according to Bloomberg. That level of annual revenue is comparable to the more than $100 million in annual revenue that Seattle’s PopCap Games did last year before it was acquired by Electronic Arts this year for up to $1.3 billion.