Developers Say Apple’s New In-App Purchases Rules Probably Won’t Hurt Them Too Much

One of the big changes hidden within this week’s update of Apple’s iOS 4.3 were new restrictions around in-app purchases.

They’re aimed at preventing children from unwittingly racking up hundreds of dollars in charges while using games that monetize with virtual currency. A story by Cecilia Kang in The Washington Post last month sparked the controversy when she reported that children playing Pocket Gems’ Tap Zoo and Capcom Mobile’s Smurfs Village were buying the games’ virtual currencies in near $100 increments without knowing it was real money.

Apple’s changes mean that when a user opens an app and wants to make to make an in-app purchase, they’ll need to re-enter their password. When they do, it will trigger a 15-minute window for additional in-app purchases, according to what Apple told GigaOm. This isn’t quite as extreme as requiring a password every single time a user wants to make a purchase, but it at least means that parents will be able to control which apps their children are making purchases with.

“With iOS 4.3, in addition to a password being required to purchase an app on the App Store, a reentry of your password is now required when making an in-app purchase,” Apple spokesperson Trudy Miller told The Washington Post. Apple did not return requests for comment.

While this might lead to a minor loss of revenue in the short-term, the feedback we’ve heard from developers suggests that this is a good move in the long-run. The revenue loss from having parents not trust their children with mobile apps is worse than a password permission change.

“This is an important trust issue between Apple and their iPhone consumers and Apple has done the right thing,” said Peter Farago, Flurry’s vice president of marketing. “I believe that no company selling virtual goods is in favor of allowing accidental purchases to continue if it ultimately aggravates consumers.”

A few developers have tried to change pro-actively or do damage control. Before The Washington Post story blew up the issue, Smurfs’ Village maker Capcom Mobile had already put more explicit warnings in its Smurfberry store. But like many other developers over the last several months, it also raised the highest price bracket for its in-game virtual currency to near $100. Another developer Recharge Studios, which is a wholly-owned subsidiary of pay-per-install network W3i, made its refund process for inadvertent purchases more transparent and pledged to lower its price points.

As Apple continues to set industry standards, developers expect that other platforms like Android and Windows Phone 7 will likely adopt similar practices.

“We anticipate that over the medium term, Android will also provide similar protections to ensure all demographics can enjoy the latest generation of freemium games,” said Niccolo DeMasi, the chief executive of Glu Mobile, the publicly-traded maker of popular apps like Gun Bros and Deer Hunter.