A big deal for social games and news apps, but curtains for piracy?
Apple has announced that iPhone developers will now be able to use in-app payments in free applications, as well as paid apps.
A big deal? Most certainly, for several reasons. Until now, anyone wanting to use microtransactions (including subscription-based billing) in an iPhone app had to charge at least 59p for it.
Now, those apps can be free. It means social games publishers like Zynga and Playfish will be able to launch free games that make money from virtual item sales, for example.
Meanwhile, the change may remove the need for games publishers to create free 'Lite' versions as demos: they'll simply be able to offer the full game for free, but with most of its content locked until a user pays.
The change could be big news for news organisations too, who can now offer free apps with a certain amount of content, but built-in paywalls to access other stuff.
Apple has some rules about how in-app payments can be used for free apps:
"You may use the In App Purchase API only to enable end users to purchase content, functionality, or services that You make available for use within Your Application (e.g. digital books, additional game levels, access to a turn-by-turn map service). You may not use the In App Purchase API to offer goods or services to be used outside of Your Application."
It also specifies that developers can't get users to buy virtual currency, or sell virtual items that expire after a limited amount of time.
However, the changes could also have a big impact on piracy. Cracked versions of paid iPhone games and apps are readily available on file-sharing networks - ngmoco recently estimated that its games suffer from a 50-90% piracy rate in their first week of release.
However, when premium games are offered for free with the payment coming in-app, that system is significantly harder for pirates to crack.
Games firms have already welcomed the news. "This is one of the most important announcements to come out of Apple on the iPhone platform," says SGN CEO Shervin Pishevar. "This is a really big deal for us. We were hoping this would happen, but we had no idea when."
He's backed up by Freeverse co-founder Colin Smith. "This announcement changes the landscape of the App Store as we know it."
ngmoco has already announced that its upcoming first-person shooter game Eliminate will be permanently free and funded by in-app payments, while re-releasing its Rolando game for free, but requiring a payment to unlock all but the first level.
Meanwhile, social networking app Boxcar has also switched to free, charging in-app for extra services.