New Report Gets Tough On Developers

After embarking on an investigation into the mechanics and trends of 38 child-orientated mobile applications earlier this year, motivated by the startling statistic that the game-playing experiences and subsequent in-app purchases of children cost their parents on average £30 million per month ,UK watchdog, the Office of Fair Trading (OFT), has published a report on its findings, in which it lays out a set of guidelines and principles for games developers. A document that features eight main rules that the OFT expects British developers to meet, the report’s main focus centres on improving the clarity and honesty of applications that can be purchased through either Apple or Google’s stores.

Mainly aimed at the proponents of the popular freemium gaming business model, the OFT’s first principle requires games to feature disclaimers that explicitly state that where a game may be downloaded for free, it may also require users to spend real money on unlocking certain elements of the game. This idea, however, already operates on Apple and it would be fairer to suggest that if the games played by children were policed more effectively by their parents, a much fewer number of people would be greeted with devastating bills. Indeed, in a recent survey carried out by the Entertainment Software Rating Board, parents admitted that they watched and regulated the in-game activities of their children a definitive 97% of the time. So it seems that lax and ‘laissez faire’ parents are actually in the minority, with tech-savvy mums and dads keeping close tabs on their iPads, tablets and Smartphones.

Another important guideline sketched out in the OFT’s report does, however, shine a light onto how children can rack up their disgruntled parents’ payments. In a scathing comment, the document accuses certain developers of ‘exploiting a child’s inherent inexperience, vulnerability and credulity’, lambasting the guilty parties for manipulating language and misleading their players. Some games, the OFT claims in its dissection of ‘child-friendly’ applications, play on the emotions and insecurities of children. Examples include suggesting, through in-game messages, that characters may become unhappy or sad unless food is bought for them (with real money) or implying that in-game popularity can only be acquired through the purchase of a new item of clothing. Implications of children being responsible for the death, sadness or lack of progression of their characters or worlds in order to encourage spending can be seen as highly unethical and when married with the relative non-understanding a small child has of the value of currency in the real world, is definitely exploitative. Certain games will also neglect to inform their players that instead of purchasing, a user can wait an allotted time for a level to be unlocked.

Although a fair plucking of the heartstrings or tapping into the human fear of rejection and unpopularity are quite often hallmarks of big business marketing campaigns, observe the classic Lynx formula of advertisements where a social pariah earns attention and affection by using deodorant, the idea that these tactics are being embraced by child-friendly games developers seems questionable. In other cases, children’s games that feature add-ons that can be purchased for such fees as £69.99 merely reflect how the mobile games market is adopting the premium prices of traditional video games, but choosing to charge during game play as opposed to before it.

Unsurprisingly, as the mobile apps market is ultimately a profit-making venture (in the same ilk as all businesses), many have spoken out against these potential enforcements. Whilst largely agreeing with the OFT’s advocation of an increased responsibility over the interests and happiness of their consumers, trade group, UKIE, has stressed that this tightening of boundaries may ‘stifle the creativity of developers or prevent the growth of the games industry.’ It can certainly be disputed as to what extent the adoption of a clearer and less underhand approach to gaming will ‘stifle creativity’ as this should not affect the complexity and inventiveness of a game but it is easy to see that for some developers, economy and ethics will make for strange bedfellows and could cause a considerable rupture in the worth of the British mobile games industry and its contribution to the overall global gaming market.

The OFT’s publication may prove to be a victory for the enraged consumer but a bad omen for the games developer that will herald the beginning of more restrictive marketing strategies and criteria.

Freedom’s / Freemium under threat. A nation divided.

Isn’t life hard enough for advanced digital manufactures’ already? For those companies making a difference, creating new pockets of innovation and making money for the country. Those “creatives” who act with decency and want to be getting a fair day’s wage for the work they have done. People working in industries like films, games and digital.

Yet, it is amazing how a few bad eggs might ruin the whole industry for us. At dojit games we make games for children, puzzle platform games like Home Bear, educational sports strategy games like Soccer Zillionare, and more arcade health knowledge based games like Totally Milkshake. These games, like most things physical in the world cost money to make. They take time. They take creative energy. They exist not in a vacuum but in a commercial reality – one with the potential to make the country millions of pounds in new revenue. Our mobile gaming expertise could be one of the UK greatest natural and exportable resources, up there with film and TV….

But now the government with the OFT has decided due to a tiny minority that the whole industry should be investigated and more importantly portrayed in a less than positive light. So the OFT in their investigation are looking into whether the full cost of mobile games is made clear when they are downloaded or accessed, as according to them this lack of information could potentially lead children and parents to make decisions they may not have made if prices were more transparently advertised at the start of the purchasing process.

This is surely not possible – isn’t it the same as warning – “this catalogue is free but if you like the fashion brand in there, so you might spend a small fortune over your lifetime?” Should the “Next catalogue” be banned? Or should we punish websites, or mobile phone games or mobile phone apps which are made well with warnings for customers about eye catching designs and engaging ideas as they would be even better at enticing people into spending their money! This is simple madness.

However, we at dojit applaud any action which highlights the dangers of rogue mobile game developers who charge huge individual payments for items – to mainly exploit the weak – and we dislike mobile phone games which you cannot complete without purchases, and we make games you can complete without payment, but we cannot abide this attack on the mobile game development industry as a whole. Apple has already introduced an app warning for parents on iTunes for apps which makes it abundantly clear whether a free app on its store does or does not contain in-app purchases. Yet this is NOT enough for the OFT surely any more regulation would be like needing a sticker on your credit card saying: “Do not give access to your finances to your children – as this card along with the pin number might mean bad things might happen”

Yet this is what might happen to our little industry – we might be regulated out of existence due to people like Cavendish Elithorn, OFT Senior Director for Goods and Consumer, who justifies this intrusion by saying:

We are concerned that children and their parents could be subject to unfair pressure to purchase when they are playing games they thought were free, but which can actually run up substantial costs.“

Playing games which they thought were free? Who does he think pays for them? The most worring thing is the thinking or non thinking this idea creates – proven by how last week when, I was chatting to a friend who doesn’t work in the mobile game industry, they happily told me that “all these free apps are cons!” I kid you not. When I asked they thought free apps paid for themselves – they had no answers. Yet they happily used Google with its PPC!

So giving away your data for free to a global colossus on a daily basis is apparently alright (look at Facebook) but to purchase something in a game is not. My concern is that to attack industries for new business models is dangerous for innovation. This kind of thinking will stop people wanting to create great mobile phone games, it will stop young people getting jobs, and it will stop an industry growing in the UK, a country where we really need advanced digital manufacturing like this to take off.

A nation divided between the understandings that “if you don’t pay for the product – you probably are the product.”

How a small number of Parents could stop Mobile Gaming

There is some dangerous rhetoric being bandied around – with ideas which if they are allowed to take off could ruin the very start of something wonderful which will make money for England.

I am talking about how the mistakes of a small minority might make it impossible for creativity to blossom, how the irresponsible can control the minds of the many responsible, how governments can really hamper a growth sector – our sector – the mobile gaming developers of this world.

And so many reporters are jumping on the bandwagon mainly due to high PR profile cases, for example the story of one young boy who spent £1700 on his father’s iPad in less than an hour. Ok that is bad but let’s get a dose of reality here i.e. I would guess that only 1 person in a million has done this (*the exact analytical stats are not known.)

Shouldn’t it be, ultimately, the parent’s responsibility to check what their children are doing. Or to know about opt in and opt out choices work as according to Charlie Osborne of ZDnet, “not every parent understands how an application works, the fact you can turn off in-app purchases in settings, or even that in-app purchases exist.” Isn’t this like saying people don’t know that you can call people on mobile phones, that your child, unless you chat to them about it, could call a premium number on a landline? And that you can block children from access to things?

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This is the nanny state gone mad. As of now, the OFT has launched an investigation into whether children are being unfairly pressured or encouraged to pay for additional content in ‘free’ web and app-based games, including upgraded membership or virtual currency such as coins, gems or fruit. So mobile games developers and the industry is to be pressured into NOT creating engaging games and getting them paid for with upgrades? This IS Dangerous!

We understand that as part of the investigation, the OFT is looking into whether these mobile phone games include ‘direct exhortations’ to children – a strong encouragement to make a purchase, or to do something that will necessitate making a purchase, or to persuade their parents or other adults to make a purchase for them. Again isn’t this an attack on basic freedoms. I don’t hear anyone picking on the toy industry for advertising on Nickelodeon.

People use Google for free as other people’s advertising pays for it, you use Facebook for free and give them your personal details, you use apps for free and you can upgrade your experiences, you watch ITV for free and advertising again pays for it. You can get a free piece of a cake at a shop – and the shopkeeper hopes you buy some more later on. Surely everyone knows this by now – and trying to stop this is counterproductive to productive people – people working hard to make a new way of living. People who are making great mobile games and doing great things.

With this weak thinking, the OFT should look into whether parents who give their children their credit card details and pin numbers should be reimbursed? Madness! Or should the government investigate whether shopkeepers are allowed to entice people in with sampling their wares? Should all “so called” freebies be stopped – whenever you can “try before you buy” we should monitor the effects on people, of course not.

Sampling, freemiums, try before you buy, test drives, upgrades, the ability of the customer to make a decision are all things we should praise and triumph. STOP this madness! Didn’t we go through this before with credit cards and the internet? And before then with landlines and naughty numbers!

It is simple. If it is connected to your finances, if it can take money out of your wallet, if you give access to it to your children, in ANYWAY, the responsibility for your child’s action have to lie with you, as the responsible adult.

One simple solution rather than smashing the whole mobile phone games industry, throwing the baby out with the bather water, might be as reported in ICT Innovate, to “Make sure you’re logged out and don’t give your password to your children in the first place.“ I find this works every time.

Freemium or Premium? That is the question… Or is it? Part Two

It is interesting that new research reported by Shane Schick shows offering virtual merchandise is a key monetization strategy for iPhone and iPad apps. Not the freemium model as previously thought. For a while now in the mobile / hand held gaming world (which for a very quickly changing world is not very long) we have seen iOS leading the way for in app purchases. The thinking from massive games like Clash of the Clans being keep apps free but offer some opportunities for consumers to open their wallets once they’re engaged – a lot of opportunities. Distimo’s recent research report: “How The Most Successful Apps Monetize Their User Base” backs this up with some really lovely numbers. The Netherlands-based company, which provides an app store analytics tool, looked at the highest-grossing 250 apps in Apple’s App Store in February that have been released in the last year.

 The Stats:

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More than three-quarters of all revenue was generated via in-app purchases (IAPs), with 90 percent coming from Asian markets. Which is something I found very interesting – as this is the area we wish to enter with titles like Dragon Dancer. Countries like Japan also tend to spend more on apps, but the overall average price was $0.99. Freemium doesn’t work–at least based on this data. Many of the freemium apps generated less than $0.99 on average per user and the overall average revenue was $0.93. Freemium trailed far behind other monetization models such as in-app purchases or even paid downloads. IAPs and paid downloads go together almost as well as chocolate and peanut butter: Distimo said this combination generated even more revenue for the developers that have tried it. Screen size may matter: iPads with IAPs generated more money than IAPs on iPhone apps, and the average price point was higher, with more than $4 for the tablet apps vs. just over $2 for smartphone versions.

Fantasy games can turn into real cash. On Distimo’s top 10, the app with the highest all-time average revenue per download was Rage of Bahamut, which gets more than $7.00. “Even though the (IAP) model is successful in all countries, it doesn’t mean that success is guaranteed in all of them,” the report says. An example of this is one of the top revenue generating countries for the Apple App Store for iPhone–Germany–where only 61 percent of revenue was generated from in-app purchases in February 2013. Although the overall approach to data analysis looks quite sound in this report, there is one fairly large gap. Distimo limited its research to revenue generated within the app store, probably because that’s what its tool, AppIQ, focuses on as well. This leaves out ad revenue that could be substantial for a number of apps, depending on whether the developer markets their app or game through an ad network. The study is a good endorsement of IAPs, but the study offers no real guidance on approach–how to offer IAPs as part of the app experience, how to price merchandise and how to nurture a paying customer relationship over the long term.

That’s still something that us mobile game developers will have to figure out on our own.

Freemium or premium? That is the question…or is it?

Mobile games for many years have been simply pastimes which came free on your mobile phone. Back in the day of WAP and Nokia, games like snake etc, where very basic graphically poor (rich in their environment) games came free with your phone. And so they were amazingly successful. The same is said for the most successful computer games every (by game play) which was and is solitaire. A game played by bored office workers the world over.

Smart phones have changed all this and created a multi-billion dollar industry from practically nothing from 5 years ago. Many developers didn’t notice the change, but others made games that were social from their very beginning. Games that went viral, games people shared, games people had to share in order for them to enjoy them fully. This social factor, was built into the very DNA of the companies.

Now the understanding that social is all is also being questioned with many giants of this space, Zygna etc, starting to find that Facebook has a saturation point. And not only that but that the freemium model which many modern mobile games developers take almost as THE given route to market may not be the only way to move the industry forward. That being said , for iOS, freemium provides 65% of top 100 most profitable applications and research shows that approximately half of total mobile gamers download only free games (Mintel, 2012). So the past thinking was simple, create social games, make them free, playable through Facebook and on mobile devices, on which people can buy in app purchases to either save time or become more (status wise.)

However, the issue was / is prolonging freemium customer playtimes. As this is not a simple task to achieve as freemium users tend to switch the games fairly often given that any new games are relatively easy to acquire. Unlike those dedicated premium mobile games produced by console – based developers where the gamers have to pay the price in order to download, freemium gamers do not need to give in any tangible value in return for their everyday freemium games hence will switch the game instantly right when they experience boredom.

Yet, for some social games, the hook is in the social nature of the game, the emotional connection, the very first premise, the ease of understanding and then the platform itself. But it is NOT the same for all platforms as the mobile – game spending pattern between Apple and Android users are completely different. Apple users are more likely to purchase premium games, while Android users are more likely to purchase virtual goods inside the freemium games, for example in-game currency and items that alter character competency or appearance (Guo & Barnes, 2007).

So perhaps it is the combination of Android handsets mass penetration (up some 20% year on year from 2011) along with the fact that Android user is more likely to undergo micro-transaction to enhance their mobile gaming experience, means that developing freemium games on the Android platform might be the optimal pathway for all mobile game developers.

The popularity of ‘Android – Freemium’ combination has attracted game developer to shift focus toward free-to-play business model as evident by the recent decision from ‘FishLabs Entertainment’, a high profile Germany-based developer, to import its masterpiece – premium Galaxy on Fire from iOS to Android as a freemium game.

Interestingly, even in the none game world, like WhatsApp Messenger, which has traditionally always monetized through a $0.99 paid download, adopted a freemium subscription model with its newer Google Play version launched a year ago, where a $0.99 per year subscription kicks in after the first free year has passed.

Could the same be done for our iOS games like Home Bear and SoccerZillionaire – which we have converted into a free mobile download game for a while to celebrate spring in April in the UK. Could bringing these mobile titles into “freemium” for a month with an upgrade afterwards make sense and make us money?

What do you think? What kind of changes are you making to your games?