Amazon now allowing in-app purchases greater than $20

by Phil Hornshaw

A restriction placed on app developers setting in-app purchase prices for their products in the Amazon Appstore has been lifted, allowing devs to offer IAPs that cost more than $20.

According to an email reportedly sent by Amazon to app developers and obtained by TechCrunch, Amazon lifted the ban on in-app purchases costing users more than $20 because of an increase in parental controls in Amazon’s infrastructure. The result, apparently, is that Amazon has controls in place that will help to stop people from making big in-app purchases by mistake, something that has been the center of some controversy.

Apple was the first to allow in-app purchases in its apps, and while the system has allowed for a lot of new opportunities both for developers and for users, it hasn’t been without its problems. Games often go with a “freemium” model to use in-app purchases, in which players can download the game app and play some or all of it for free. The developer makes money from in-game items players can purchase. Often they’re not mandatory, but they help make progress through the game easier, or open new areas that free players can’t access.

A loophole in Apple’s in-app purchasing system created a big problem for some parents when they would hand off their iOS devices to kids to be used to play some of these games. One, Smurfs’ Village from Capcom, became the center of the controversy when parents reported their children were able to make hundreds of dollars of purchases of in-game items. This was because Apple allowed users to sign-in with their Apple IDs in order to download apps, and then would leave a 15-minute window following that sign-in that would allow users to download more apps without signing back in. Unfortunately, that window also allowed children to authorize in-app purchases without having to re-enter passwords. This issue that has since been corrected.

Obviously, Amazon has learned from Apple’s mistakes and was working to make sure a similar issue with in-app purchases couldn’t occur before it opened the gate to big purchases (Smurfs’ Village purchases go up to $100). But in-app purchases are also a very big part of the business model for many developers, especially in games. Not a lot of users make in-app purchases, necessarily, but a small percentage buy in-game items in earnest, spending enough money to support games being free for all the other players.

For developers of Amazon apps, big purchases are probably going to be very lucrative, as well. A study by Flurry Analytics earlier this month of the Amazon Appstore, Google Play and Apple’s iTunes App Store found that while developers make the most from in-app purchases when they develop iOS devices, they make much more on them through Amazon’s app store than they do through Google’s. These big purchases may well help to increase revenue even more, giving developers more reason to head to the Amazon Appstore over Google Play. Now the ball is in Google’s court to start finding new ways to draw developers to its store.