Mobile Game Developers Grapple With Apple Crackdown on Incentivized Installs

We’ve been trying to get a sense of how the biggest freemium game developers are grappling with major changes to Apple’s policies this week. Apple started rejecting apps that have offer walls where users can download other developers’ apps in exchange for virtual currency late last week (see right). The company is arguing that they violate the developer agreement by allowing apps to cheat the chart ranking, even though Apple has tolerated such offer walls for at least the last year.

This is a fundamental shift that will change how thousands of apps acquire new users or monetize and it is a setback for the emerging space of free-to-play games. Most of the larger developers we’ve reached out to are being relatively quiet and Apple is not being very forthcoming with third-party developers about exact policy changes are and what is acceptable and what is not. The hope is that the platform will be more talkative now that the quarterly earnings call is over.

But this is what we’re seeing so far:

1) Apple Appears to be Continuously Tinkering, Not Issuing a One-Off Change: As we noted yesterday, the apps that got an unusual boost through the weekend — well-known consumer Internet brands like Facebook and Skype that aren’t games — are falling back down on the charts again. Six of the current top 10 titles are games, while the rest are photography or entertainment. Most of them are brand-new apps, unlike a few days ago when we had older, more classic titles at the top.

According to conversations we’ve had with the bigger pay-per-install networks, it appears that the ranking algorithm is returning to what it was before last week and is again favoring downloads. But it’s very clear that some type of change happened last week that boosted highly-ranked apps in specific categories. Facebook jumped to #1 even though the company hadn’t issued an update; the app hasn’t held that high a ranking since at least July 2009. The app has fallen back to its normal position at #16 today. Google Earth was another beneficiary from the change. It is #1 in the Travel category and had jumped to #46 overall on Sunday from its typical ranking between #80 and 100. It’s also tumbled back down to a normal position at #74.

2) Some Developers Are Holding Off on Updates: Some developers are going to postpone updates and see how the market shakes out in the next few weeks. Playforge, which makes the Top 10 grossing app Zombie Farm, had planned to bring an iPad app to the platform sometime this month but told us it will probably delay the release. The company pushed an update to its iPhone app on April 14, before the rejections started happening. So Playforge has some breathing room to wait for information before it issues another iPhone app update.

3) Other Developers Are Removing Offer Walls: Get Set Games, whose popular Mega Jump title was caught in the crossfire and had a bug fix-related update rejected by Apple, told us they’re expecting to be back in the store in a few days. They’ve removed the offer wall.

Several of the TeamLava games also seem to no longer contain offer walls. The company handles all of its content on the server-side so it doesn’t need to go through the app store approval process to release updates. The company likely just took them out. They haven’t replied to requests for comment yet.

4) Other Advertising Networks Are Opportunistically Moving In: Competing ad networks, most notably including Apple’s iAd, are looking to take advantage of game developers scrambling to find alternate means of distribution.