In-app purchases are a modern method used to monetize a product, most likely an application or website. They allow developers to give away their apps for free while retaining the ability to make money. Around 98% of Google Play applications use this model. They then make cash from selling products or upgrades within the app. This is usually combined with advertising to bring revenue from two streams.
What Is an In-App Purchase?
When people download an app, it will have an ‘in-app purchases’ notification written next to it. This lets people know that the app will sell upgrades and extra features, so they may need to make a purchase. If they decide to buy, what they are getting is presented in a text-based format. They can then add payment details or use integrated methods like Google Pay. Any payment is split between the app store and developer.
Whole industries have grown around the method of in-app purchases. One of these is the online social casino phenomenon. These websites allow the provision of online casino games like table games and slots, in places where they are typically forbidden. This is because they don’t offer cash games, and legally work under US laws governing lotteries and sweepstakes. Thus, operators like Luckyland Slots can provide all the online gaming entertainment popular across the globe, but without having to take money to do so. This is simply through the application of optional in-app purchases.
Types of In-App Purchases
There are certain trains of thought that add subscription models to in-app purchases. This is the purchase of a content, service, or feature on a recurring bill basis. Services like Netflix use this model. However, this differs from in-app purchases.
Generally, in-app purchases can be broken down into consumables and non-consumables. The former are items that are temporary or limited in number. For example, they may include extra information or metrics used in a game like currencies, health, or ammo. Non-consumables are in-app purchases that stay. The most popular is a purchase to remove pop-up ads, but it may be to upgrade service with a one-off payment or to download a skin or character.
The Benefits of In-App Purchases
In-app purchases are great for creating brand loyalty. Once users pay for an upgrade, they have begun to invest in something. This is time-based as well as monetary. Thus, if you can repay their trust with a quality product they will stick with it and probably purchase it again. As well as making them less likely to abandon the app, they will also increase its use and engagement.
Apps also allow you to give away core features for free. By refining this, you can build up a huge user base. This is a large amount of data. Knowing your audience makes them easier to target with in-app purchases and can be better than just launching a service and hoping people buy it.
Crucially, they bring you a stable source of income. If you can keep interest in your product and its popularity, it will continue to sell in-app purchases. Combined with in-app advertising, a popular app can quickly become very lucrative. This makes discussing in-app purchases with a team and your developers an essential step.