How Micro-Transactions Will Shake Up iPhone 148
Spanner Spencer writes "Talk to iPhone games developers, and the feature they're most excited about in the new iPhone 3.0 software is the ability to do in-game micro-transactions.
And while you might wonder if this is just an excuse to get iPhone gamers to dip into their wallets even more often, it's actually a hugely positive thing for several reasons.
Downloadable content, virtual items, subscription billing and fast-track social advancement are some of them, so Pocket Gamer looks into a bit more depth about what you can expect on the micro-payments side once iPhone 3.0 debuts."
Shake up your iPhone (Score:1, Funny)
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The Iphone, the phone that keeps costing.
Huh. (Score:5, Insightful)
Probably no need to answer that.
Re:Huh. (Score:5, Insightful)
Re:Huh. (Score:5, Insightful)
I disagree, and here's why.
In-game, in-app transactions free up developers to provide applications which are modular and go beyond widgetizing the phone with bunch of buttons. For example, instead of releasing 10 different apps for language instruction and ranking somewhere in the 10,000's on the list of downloaded apps, you could just make one well-designed app and then provide language packs for a fee. Currently there are lots of single-purpose apps from the same company localized to fit a specific language. This is bad for the developers because they don't have a chance to reach critical mass on the platform since their offerings are balkanized - Spanish, French, and German versions are all competing against one another and other similar apps. Their combined total downloads would propel them to the top but since these are treated and sold as separate apps you lose exposure.
This would also do away with "LITE" applications and get you the real thing where you could purchase the full game after playing the demo level. It's really a redundant step to download iFighter Lite (an awesome game!) and then go back and purchase the full iFighter game. The in-game transaction saves you the step of going through delete > re-download > sync steps and puts you back into action.
Will some developers abuse this by releasing shitty content? Absolutely. But the market will sort these out in time.
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This is currently true. While nobody can publicly discuss the exact terms of the 3.0 payment model without breaking the NDA, you can draw some conclusions by looking at the spirit of the current contracts. In short, the 'free means free' part of the payment model is to keep you from making a free app and then charging for it in some way other than the app store. In effect, they're saying that you must Give Unto Caesar or GTFO (or go free). Trying to get around giving Apple their cut is a good way to be stuc
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You're right, but here's a better example of LITE vs Pro app like DSLR Remote [ononesoftware.com]. One of them costs $1.99 and the full-featured app costs $9.99. The company plans to update the app to support Nikon cameras very soon and they're not doing separate apps in this case. With in-app purchasing you could just buy support for either Canon or Nikon and not subsidize it for the other camera.
Extend this to things like loca
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It's hugely positive for the business types who keep pushing micropayments as the thing that will save the Internet, despite the fact that they've been tried several times before and have been a dismal failure.
The Guitar Hero and Rock Band developers would like to have a word with you.
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> but it's not a positive development for the consumer no matter how you slice it.
Hey, you said that very definitively, so it must be true. And I agree with you. I'm tired of the "business types" trying to make money off me. Just give me everything I want for free, already. Is it that hard???
Well, just playing devil's advocate here, let's consider whether micropayments really a logical step to make the Internet better for consumers. Contrary to popular belief on the left side of things, the payment of go
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The logistics part is not even the hard one for micropayments, though the privacy issue is. I can not think of any way using encryption or whatnot to make micropayments work without a central server. Cash (bank notes, coins) works because it's so hard to copy them. However a digital bank note, by nature, can be copied. So it requires a central server that keeps track of all payments, with all privacy issues related to it.
The technical side is also not even that hard, albeit that you will have to install an
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Understood. There are definitely a lot of problems with the proposed implementation. However, the bottom line is that the Internet is not as rich because the consumer has no way to pay for content it wants. In the end this hurts everyone and it will be replaced by a pricing model of some sort. Whether that is the current proposed implementation or not, I don't know. Luckily we have a somewhat free market and can try things until something that works sticks.
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It's hugely positive for the business types who keep pushing micropayments as the thing that will save the Internet, despite the fact that they've been tried several times before and have been a dismal failure.
Oh come on, you're going to try and tell us that Flooz.com was a dismal failure? They had Whoopi Goldberg as their spokesperson for Christ sakes! How is that a failure?
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The app, Virtual Cricket [virtualcricket.mobi], gives the users access to live scores and commentary for the international cricket games. The cost of professional data sources for this sort of content is not small, as you can imagine. For me to just brake even, I would need to have a very high sustained level of new customers each and every day.
In-app purchases however
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That are small payments maybe, not micropayments. The iTunes store charges US$0.99 for most songs, in other words for the price of a few songs you can have lunch as well. That are not micropayments.
Real micropayments are smaller. Cents, or fractions of that. And they have always been a failure, mainly for the inconvenience ("click here to pay $littlebit to see the article/video") and the fact that users don't like to decide time and again whether something is worth paying for. Subscriptions work far better
Re:Huh. (Score:4, Insightful)
It's positive for a couple reasons. First, the consumer gets more choice about the premium content they want to buy. Sorta like buying individual cable channels as opposed to packages. Second, the developer now has more options on how to sell said content. They may be able to take more chances offering small pieces of content to determine a market prior to offering a full package. In general, I think more choice is always a good thing.
Don't think of the free apps going away, but instead you having more options on potentially buying some of the paid for apps.
Re:Huh. (Score:5, Insightful)
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Gee, thanks. That image has been burned into the retina of my mind's eye, and I can't make it go away.
Please be assured that you are not alone in dreading the day you have to wander stark naked.
Re:Huh. (Score:5, Insightful)
positive, choice, premium, packages, options ,content, offering, market
wow did that just read like a marketing spiel
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This could work very well for "service" type applications such as 411 or language translations. For instance, if you translated a block of text it would be very easy to have a "submit to prof
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I hope it's clearly marked and confirmed (Score:4, Insightful)
I like my iPhone and I have 70+ apps installed but most of them are free apps that I'd live without if I had to pay for them. Only a dozen or so are paid apps that I actively tell people "you should get this, it's outstanding". I've paid for a couple of games but I would be really upset if I "accidentally" purchased something even if it's only a couple of dollars.
I hope Apple makes very sure that "micro-transactions" don't let developers try to keep slipping their fingers into my wallet quietly.
Re:I hope it's clearly marked and confirmed (Score:5, Funny)
Re:I hope it's clearly marked and confirmed (Score:5, Informative)
I hope Apple makes very sure that "micro-transactions" don't let developers try to keep slipping their fingers into my wallet quietly.
As I understand it, $0.00 apps can't call the microtransaction API. That's why you can't buy new books in Amazon's Kindle app; you have to close it and open Safari.
Re:I hope it's clearly marked and confirmed (Score:4, Interesting)
It would be fairly trivial to get around this restriction. Just sell at $10 version of the Kindle app that gives you $10 store credit towards your first purchase. Of course people might balk at the $10 initial cost, so it may be more effective to sell it for $1, or whatever Apple has set as the minimum cost.
If you're going to be making a considerable amount of micro-transactions, the initial cost is probably worth the added convenience. Of course, Apple could always make exceptions [daringfireball.net] as it may have done in the past.
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"That's why you can't buy new books in Amazon's Kindle app; you have to close it and open Safari."
Um, no. The current TOS doesn't permit Amazon to include purchasing functionality in their application (that and there currently is no microtransaction API for Amazon to call).
Going forward, Amazon is also more likely to want the whole pie, instead of having to share 30% of it with Apple, particularly if another article I read is true, where Amazon is paying the publisher a percentage of the MSRP while chargin
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Re:I hope it's clearly marked and confirmed (Score:5, Informative)
I hope Apple makes very sure that "micro-transactions" don't let developers try to keep slipping their fingers into my wallet quietly.
Yes, it is very clearly marked with a popup window that asks you "Do you want to purchase (insert item here) for (insert price here)" window that you have to confirm or deny. They showed an example of this in the 3.0 press conference when they announced it.
Social Pyramid Games (Score:5, Insightful)
Re:Social Pyramid Games (Score:5, Funny)
How about a Nigerian adventure game, where you have to pay every time you make some progress toward your 10M$ reward.
Positive? (Score:5, Insightful)
And while you might wonder if this is just an excuse to get iPhone gamers to dip into their wallets even more often, it's actually a hugely positive thing for several reasons. Downloadable content, virtual items, subscription billing and fast-track social advancement are some of them...
Um, in what way are any of these things positive? I look at these things and see only scams: more ways to nickel-and-dime gamers to death.
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why are you withholding it from my 'Motherboard' which I purchased?
Because its a motherboard, not ram, and I don't ever remember ram coming standard with individual motherboards from ASUS, DFI, or Gigabyte (or other makers), ever. Bad analogy, try again.
Here I was thinking that because games had a fixed price ($50 or $60USD) and gamers had a fixed amount of money to spend, they might try to get the most value for their buck. If a sizable portion of a game's design budget goes into content that isn't part of the release or cost of the game, why pay full price for that gam
Good old days (Score:1)
I remember the good old days when there were no such things as DLC. They were simply called free patches.
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I guess the developers want to encourage us to steal the original content, then pay for the DLC? I understand that the DLC is seen as a way to monetize all those pirates out there. So, again, the legitimate users get screwed in the process.
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But if developers are leaving out content in order to make DLC more compelling, that's messed up. And that's exactly what's happening more and more often. Capcom released 4 DLC packs for SFIV with alternate costumes, items that used to have been included in the regular release, or as a patch after the fact. That's hardly an appropriate use of DLC, IMO.
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This is not just about gamers. Yes, I'm sure that there will be games that will take advantage of this by selling more levels etc as well as having some dress-my-pet-toy type of games which will be completely over the top.
However, this is really about enabling serious developers to recover more money from the investments they made to develop serious apps with serious content. In my own case - sports apps that have premium quality commentary and live scores
This will end badly (Score:4, Insightful)
Re:This will end badly (Score:4, Insightful)
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And how is the parent supposed to do this, when these companies can add for charge services to your contract without prior notification, where there is no clear and concise explanation of where you may incur expenses, etc? There is such a strong movement to blame the parent/mortgage recipient/other borrower and insist they they live up to their end of contracts, while allowing various banks and corporations abrogate their contracts again and again (but heaven forbid the government should be able to do so)--
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Actually (at least for Canada), you CAN'T buy iPhone apps using a gift card. It's only good for music/TV/movies.. Not sure if the allowance could work for iPhone apps, but hopefully that's just a temporary "iPhone apps are new and it's not implemented" type thing rather than a decision...
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Takes me back (Score:5, Interesting)
Pay 20c to continue.
The more things change... (Score:2)
You are out of lives.
Pay 20c to continue.
How, exactly, is the arcade model markedly different from the MMORPG monthly fee model? I guess the more things change, the more things stay the same.
Re:The more things change... (Score:4, Interesting)
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MMOs make you pay regardless of if you play or not, after you sign up.
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Abuse? (Score:4, Interesting)
Back to reality though, I really like that the iphone app store was once a place where dev's could make a halfway decent program based on a really cool idea and make money as a reward. It also felt like the golden days of the old shareware scene before it got stale and people started depending on it and expecting it to pay their bills. While I have yet to pay for an app on the itouch, there are a few I might have if I had an iphone with it's mobile connection and gps (the geocaching app would be the first on my list).
However, I really don't like the idea of a microtransaction for iphone gaming. I think that the microtransaction system in gaming implies that someone has a heavy emotional attachment to the game and the majority of microtransaction items are prestige items. In order for those two criteria to work, you need two criteria: A game that someone will play for more than a few hours before buying another $1.00 game and persistent multiplayer. I.E. Why buy a coat for a character that you will play on a plane flight and never again? Especially if the only way that people will see it is if you show them the character on your iphone. ("Oh, that's nice, you paid extra for him to be lime green!"). By the way, if you're thinking of buying extra levels, how many labyrinth lite instances have you seen on iphones? How many full versions? The only difference is more levels, but I haven't met anybody that felt the need to buy more levels for a novelty game.
That and the other major types of apps that i've seen IT and casual people use are information access type apps (urban spoon, website readers like for fmylife, directories, directions, recipes, etc) and resource access type apps (ssh, remote login, and other IT based monitoring/remote tools), nobody is going to pay a quarter every time they want to look up directions or login to thier server, and they'll probably just buy the full app and expense it or eat the cost for making their lives "easier". So the only thing I can see is a feature list a la carte, i.e. if you look at the list of features that differentiate a lite and full version of an app, and you only charge a small amount per feature, you might get more money in the long run due to people not wanting everything, but only picking out what suits them.
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I agree that your examples aren't things I would be intereasted in paying for, but I don't see why it is bad that such things are available to those who want them.
There are people willing to pay for decoration in both real life and virtual, so someone is going to try to service that market in some way. I don't understand the mentality but I'm not really affected by its existence.
Having used Apple products for many years now I doubt they will allow the applications they distribute to trick people into buying
Re:Abuse? (Score:4, Interesting)
I.E. Why buy a coat for a character that you will play on a plane flight and never again? Especially if the only way that people will see it is if you show them the character on your iphone. ("Oh, that's nice, you paid extra for him to be lime green!").
One of two things will happen. Either people are dumb enough to do it and make it profitable, or game companies will find out quickly that it's the Apple App Store, not the PS3 Network where 12 year olds kick and scream until their parents let them download the MGS1 DLC Pack for LittleBigPlanet for $1.99.
If you hear DLC and you think "Oh, that must mean they're going to sell minimal games and then charge for every little piece of the full game and that's it" then it's a good thing you're not a game developer, because your customers would buy your games exactly once and be done with you. Now, I'm sure we'll see this happen to SOME extent, but people aren't stupid - we don't like screens littered with advertisements, we don't like paying by the minute (even though you can't DO that very well with micropayments - it's not auto-pay you know) if there is a similar application that is a one-time purchase, and if you want us to subscribe to something it better be freakin' phenomenal.
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but people aren't stupid
I beg to differ.
we don't like screens littered with advertisements
If that's the case, then why is America's #1 pastime sitting in front of screens littered with advertisements?
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If microtransactions for clothing items in an iPhone game bother you, don't do it. It seems you don't already, since you have never bought anything ;)
Apple has this rule that you need to provide full functionality. You can't submit an app with unfunctional buttons. You also need to charge for the app in the first place to have microtransactions available. I'm not a scummy developer, but I am sure we'll see some *cough* EA *cough* crop up. If I was to implement microtransactions in a game, I'd make sure a sm
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The case for micropayments (Score:5, Insightful)
A lot of people here can see no good from micropayments.
However, it allows the developer to make the initial game much cheaper, and thus gives you more of an ability to try a game for less - essentially you could replace the lite/full version with a single version that let you buy more levels.
Then as a gamer, if you liked it you could buy the rest of the game... or perhaps mid game you could decide the level design had gone to pot and buy no more.
in-game payments is just a tool, and like any tool it can be abused - but that does not mean the tool should not exist and cannot be helpful. In the end the companies that treat the consumer with respect will make the most of it.
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But that's Microsoft and not Apple (Score:2)
In that case Microsoft is forcing Valve to charge for content.
We don't have examples of Apple doing that at all, the examples we do have are of a huge number of free apps. There's no indication Apple wants to change that at all, so I don't think it's really that much of a danger... are you worried about some in-game content not being able to be free? That seems unlikely.
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All I'm saying is that Apple is less than generous with its service packs and OS upgrades and when faced with making money or not making money, any business with shareholders and a need to turn a profit wil
No... (Score:2)
Couple of things: Microsoft is a major shareholder in apple
Microsoft sold off the stock investment they made some time ago.
There's less of a difference than those Mac vs. PC Ads would have you believe.
I used Windows every day at work for a decade to do programming, and programmed at home on a Mac for about the last seven. There's a world, a giant world of difference with a yawning chasm between the two.
Also, Apple is a publicly traded company with shareholders and a need to turn a profit.
Yes but they are w
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I remember the good old days when that was simply called a free demo.
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I remember the good old days when that was simply called a free demo.
now they are called fee demo
It's still a free demo, easier to get full version (Score:2)
It's still a free demo. You download the app for free, and what you can do is a demonstration of what the app/game will do for (or to) you generally.
It's also now an easier way to get the full version rather than having to launch the App Store and hunt it down. Being easier will make it more likely to be done...
As an example I point you to the PC game "Braid", where I played a few levels and suddenly decided "OK, yes I'd like to get the full thing". They had a number of unobtrusive in-game points where i
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Sounds great in theory... but in practice, I'd hate it. Nothing like ruining a sense of accomplishment by forcing the player to add cash to continue. Paying $X for extra lives makes more sense... just like most coin-op videogames.
If micropayments HAVE to be done, then they need to be done gracefully. For games, I'd love to hear from some Korean game
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Seriously. It has worked well for the XBox and games like Rock Band. Since Apple is so insistent on making their phone a console, it makes sense that they would promote the same revenue model.
Of course, buying games by the level is as stupid as buying only the "hit" songs on an album. It's a good way to promote fluff while leaving the long, complex, rewarding gems lost in the sales rankings. I don't look forward to seeing the new wave of fart applications, now with downloadable sound effects.
Exactly, XBox is a model where it's generally good (Score:2)
Seriously. It has worked well for the XBox and games like Rock Band. Since Apple is so insistent on making their phone a console, it makes sense that they would promote the same revenue model.
I think that's a great model for how micropayments can generally be used as good tools - there have been some abuses of the model on consoles but it's enabled new ways of expanding games that I think a lot of people like.
Of course, buying games by the level is as stupid as buying only the "hit" songs on an album.
That
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That's because there is no good in micro payments. It's a dishonest means of hiding the true cost and/or milking more money out of people for a product they've already paid for. In other words its a business model built around the bait and switch. Publisher A advertises all the features available in the premium version of Game B but advertises the price as $10 with "micro transactions required for premium content" in extremely small text. However the
But you're thinking advantage or multiplayer only (Score:2)
It's a dishonest means of hiding the true cost and/or milking more money out of people for a product they've already paid for.
Not if people are fully aware of other fees up front. Doubly so if the product was free to begin with, as they were out nothing if the product springs fees on them they do not accept - they have nothing invested.
Sure you can say the system can be abused and I'm sure it will be. But such apps would be savaged in the comments and ratings for the game, and sales would rapidly drop.
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Now think for a moment, will this happen? Just like telco's advertising the per month cost of service instead of the total cost of the term or banks not advertising all their fees and charges until you accidentally run over them. The point of micro transactions is solely to obscure the total cost. People will not be aware of the cost up front.
Speak up! (Score:2)
Downloadable content, virtual items, subscription billing and fast-track social advancement
Sorry, the deafening Kerching! Kerching! Kerching! Kerching! drowned you out there..
This is NOT a bad thing. (Score:5, Insightful)
1. You are warned everytime an App charges you. I don't understand the people acting like "micropayments" means "happens automatically without your knowledge".
2. If you don't like the payment model a certain App uses, vote with your wallet. Stop using it. Developers are only going to make money nickel-and-diming you all if you LET THEM.
3. Free Apps will not go away. It isn't like people said "Oh gee, I wish we could only charge $0.50 for this. I guess we'll give it away instead of making any money". Those Apps are free because whoever made them had the ability and desire to release them that way.
So, calm the fuck down.
Definitions (Score:2)
Isn't this going backwards? (Score:3, Informative)
I thought the whole point about the App Store was that you could BUY an app (as in, ONCE). This is very different than services such as Verizon's Get It Now, which allows you to get a SUBSCRIPTION to an app that you will pay for again and again each month for as long as you own the phone (or cancel the subscription). I understand about being able to "try" something to see if it's worth sticking with, but come on, most apps for the iPhone are a buck or two. You pick up a dozen for the cost of lunch. And how long is it going to be before the average "micropayment" starts creeping up to near what the greater percentage of apps cost now (.99)? Poof! You're Verizon again.
I like microtransactions. (Score:3, Interesting)
As long as my micropayments go toward something semi-permanent (more levels) instead of something transient (an extra life), I'm totally cool with it--and I'm also cool with other people liking the transient stuff. There's not enough ways to pay small amounts of money for things that are worth small amounts of money, so this sounds good to me. I'll always have my choice to play games that just don't use that feature anyway.
Microtransactions lead to macrotransactions (Score:2, Informative)
Pay for additional levels inside a game (Score:2)
I'm not a gamer myself, but I can imagine a freely downloadable game that has additional levels available for a trivial amount of money (instead of a $5 app, a 50 cent to $1 pack of additional levels, up to $5 to get/unlock all levels). This would cost the gamer that wants all the levels the same amount, but others could play the game and would buy additional levels as long as the game is engaging...
I can easily imagine this increasing over-all revenues per game, as many people would download the free game,
Chill Out - you just like to complain. (Score:2, Insightful)
Wow, I have noticed it for a while here on Slashdot, but the only reason that people seem to comment is to complain (this too may be considered a complaint). Cheer up basement dwellers, as an iPhone developer writing games aimed at young children I can assure you that its not as easy as people are making it out to be to profit off of little fingers making little mistakes. ...If it were so, people would abuse that and apple does a ton to make sure that no one gives them a bad name, many times even at the c
Apple needs to get licensed as a bank (Score:2, Insightful)
At the point Apple starts acting as a money transfer agent for third parties, they need to start acting like a financial institution. Either they're a bank, or they're a money transfer company, both of which are regulated.
PayPal eventually had to register as a financial institution in Europe and in some US states. Apple will have to do the same.
So Target is a bank? Amazon is a bank? (Score:2)
At the point Apple starts acting as a money transfer agent for third parties
How is Apple supporting in-game transactions for Apps any different than Amazon allowing you to buy books for a Kindle or buying upgrades for your kitchen from Target.
The simple fact is the app developer charges for SOMETHING, which you are buying. Apple is not "transferring money" beyond allowing the consumer to buy something someone else is selling. They are not a bank in any way shape or form.
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How is Apple supporting in-game transactions for Apps any different than Amazon allowing you to buy books for a Kindle
Amazon is licensed as a money transfer agent [amazon.com] in states that require it. So Amazon is, in fact, regulated by banking authorities.
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That's pretty interesting, but I'm not sure it's a compelling argument that Apple would need to be considered a money transfer agent:
A) It's Amazon Payments, not Amazon.
B) They are not a "Money Transer Agent", they are a "Money Service Business", which is defined [google.com] as:
"A retail store that enables a customer to do one or more of the following: cash checks, pay major bills (utilities, phone, cable, etc.), wire money to other locations, purchase money orders and in some cases to borrow against post-dated checks
Idea seems to be OK, imlementation not so much.. (Score:2)
Flaw 1: There is no limit. Micro payments would be nice in a way, that you deposit some amount of money on a micro-payment account (10-20 dollars for instance) and then use it until it is empty. Then you could reload it manually, for instance with an online banking account (no automatic loading of the account to limit potential losses, like with pre paid phones).
Flaw 2: Greed. Come on, 20-70 ct are not exac
Microtransactions: The business of the future... (Score:2)
...and it always will be!
a rose by any other name (Score:3, Insightful)
As long as the following is true: (Score:2)
2. Its impossible to get "auto-charged"
Gambling? (Score:2)
How long before someone implements Zyngo on the iPhone?
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Everyone is missing the scam (Score:3, Insightful)
The summary is ter: not micro-transactions (Score:2)
The summary is terribly misleading. First, micropayments means literally "microscopic payments" like as in 1/1000th of a dollar. Second, this is not limited to games.
IMHO, micropayments is a huge thing. It would allow for a completely fair way for things like newspapers to charge for content. I don't want to sign-up for each web site that provides me content. Nor do I think advertisements is viable for all businesses. But as an information hog, I would not mind having access to various pay journals li
Re:Looks like attack of the shill (Score:5, Funny)
Fuck iphone.
There's an app for that!
Re:Looks like attack of the shill (Score:4, Funny)
Re:Looks like attack of the shill (Score:5, Funny)
iFuck?
More like (Score:5, Funny)
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And now the question we're all dieing to hear the answer to...
How long did it take to type that with one hand?
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Fuck iphone.
There's an app for that!
Yeah, but is there a hardware port for it???
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Right, I'm going to need a fleshlight, a dock connector, the SDK and a few days.
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Don't worry! With the new release you can connect any third party hardware for use as a human interface input.
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Not sure why you were modded troll - it's got worse than daily now, in that there are two Iphone stories on the front page today that are nothing more than rumour or speculation, and a third story that probably wouldn't have been worth covering if it wasn't for the Iphone connection.
sLashdot - iPhone rUmours fOr nErds, sTuff tHat dOesn't mAtter?
Incidentally, I recently used my Motorola V980 to access a website - I'll have to submit a news story, as that's obviously news worthy, right.