Let There Be Monetization: Android’s In-App Billing Is Out to Consumers

In a move that may make Android a financially viable platform for scores of developers, Google said that in app billing is finally out to consumers.

It’s taken months of waiting, but this will let Android developers finally embrace what iOS developers have been shifting to over the last several months: free games that monetize with in app purchases of virtual goods. More than half of iOS’s top 25 grossing games are now free and make money off selling virtual currency and goods.

Now Android developers, who up until this date have mostly been reliant upon advertising, will have a chance to do the same. With Android predicted to grab 39.5 percent of the 450 million estimated global smartphone shipments this year according to IDC, both the platform’s market size and freshly-launched payment options make for an attractive mix.

Android’s in app billing launch partners include Glu Mobile, the publicly-traded mobile developer behind Gun Bros and Deer Hunter, and Tapulous, the company Disney acquired which makes musical titles like Tap Tap Revenge. Tap Tap Revenge is selling packs of songs to play the game against. ComiXology’s Comics (see right) and Trendy Entertainment’s Dungeon Defenders: FW Deluxe are two other apps also coming to market today with in-app billing. Like on iOS, Android takes a 30 percent cut of all transactions.

While this is a promising start, Android still has a lot of improvements to make in terms of matching Apple’s prowess at payments. Even though developers have offered paid apps on the platform, the number of paid downloads on the platform has paled in comparison to volume seen on iOS. Google doesn’t require that consumers register their credit card when they activate their phones. So prospective buyers tend to drop off when users are prompted to enter in their credit card number the first time they download a paid app in Android Market.

Developers also need to take extra precautions to prevent piracy; Android is encouraging developers not to bundle in their in-app purchase content into their .apk file (or Android Package file). Instead they deliver the content through a real-time service with a remote server (see diagram below). If users download the content into their phone’s SD card, developers need to make sure it’s encrypted too.