The problem with In App Purchases (and what to do about it)

The problem with In App Purchases (and what to do about it)

In App Purchases can make you feel like you're being ripped off, especially when you have to pay to win the game. What's the solution?

We've dedicated a lot of space here on iMore to the issue of In App Purchases (IAP). Rene and Georgia have discussed it on The iMore Show; Rene has opined about it separately; it's even come up on Talk Mobile. Now I have a modest solution for one way to deal with it. Read on for details.

What's gotten us here

When the App Store first came online, the first apps to show up included ports of apps and games from Mac OS X. That made a lot of sense, since iOS development required the same tools - and the same body of knowledge - that Mac developers were already familiar with. They priced their apps less than what the Mac versions cost - pay $30 for a Mac game, expect to pay $10 for its iOS version. Initially, they sold well. Some of them made more money on iOS products than they did on Mac products, too.

In fairly short order developers discovered that if they priced their apps even lower, they'd sell more. And those sales rankings pushed the visibility of their apps even higher in top-selling lists. The race to the bottom was on. In the blink of an eye, app developers were shooting for the 99 cent mark. And iOS app buyers came rushing in.

The shareware dilemma, and Apple's solution

Developers realized even before the App Store launched that they'd be working at a deficit compared to how they used to do business, because Apple offered no mechanism to give buyers a chance to try before they buy. Apple wanted to simplify the app-buying experience. Buyers would have to do with screenshots and product descriptions, or with info off the developers' web sites.

The old Mac shareware system that supported many of these developers relied on time or feature-limited versions that could either be unlocked by entering a registration code, or that required you to separately download a fully-enabled version after you paid a registration fee. That system was gone.

During the second year of the App Store's existence, Apple introduced iOS 3, and with it came a new payment mechanism for apps that has fundamentally changed the way games and many other apps are priced. That mechanism, of course, is the In App Purchase.

Pennywise and pound foolish

At first, IAP seemed like it might be a good solution to the problem of kicking the tires. Developers could offer apps for free and unlock features for an additional charge. It also paved the way for subscriptions, which have enabled digital publications - magazines, newspapers, etc. - to flourish on the iPad.

But the law of unintended consequences has reared its ugly head. Instead of being used to unlock features, IAP is instead being used to endlessly charge users - in particular, gamers. You can download some great games that cost nothing to download, but to play them, you'll get charged. And to continue to play them, or to unlock new content, you'll be charged.

IAP is, more often than not, used to flog paying customers until they finish the game or give up in frustration and stop playing or delete the app altogether.

What's worse, in the end, users who absolutely have to pay (witness the popularity of games like Candy Crush Saga as an example) end up getting charged more than they would have if they'd just bought the games in the first place.

Be careful what you wish for

Ultimately, we App Store customers have no one but ourselves to blame. If it weren't for our own desire to go cheaper and cheaper, developers could have continued to charge a fair price for their software. But the free market has run amuck, and developers have been forced to adopt different measures to extract money out of us.

One developer I've spoken with mentioned that they'd tried an experiment with one game: they released it as a pay-to-play title; they then released it as a free game with IAP. The IAP-enabled version dramatically outsold the pay-to-play title.

The results speak volumes about the way that App Store buyers perceive value, and their inability to perceive that they're being fleeced.

What to do about it

I don't see a radical backlash of developers simply charging money for their apps any time soon - the expectation has been set in the mind of consumers that zero is what the want to pay up front, and the expectation is there that they'll get charged for IAP if they think the game is worth it.

Accepting that IAP is here to stay, I'd love to see a system put in place whereby developers can cap the amount of IAP their games will accept. What the cap would be depends entirely on the developer, obviously, and how much they think the game is worth. So once you spend $10, or $20, or whatever, the game is permanently and completely unlocked.

Obviously, though, this is predicated on the assumption that a) Apple provided a way to do that and b) developers have any incentive at all to stop charging for IAP at any point in a product's life cycle.

Still, it'd be nice to know that there's a light at the end of the IAP tunnel - that if I value a game enough, I can just pay to get everything that's there, and be done with it.

So far, though, I'm not optimistic it will happen.

What do you think? Are you as sick of IAP as I am? Are you reluctant to download a game if you know you're going to get charged through the nose to finish it? How much have you spent on IAP? Talk to me in the comments.

Peter Cohen

Managing Editor of iMore, Mac and gaming specialist and all-around technologist. Follow him on Twitter @flargh

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The problem with In App Purchases (and what to do about it)

49 Comments

I personally can't stand the way In-App Purchases have evolved so quickly. It used to be to unlock features and get additional content, but now it's all about driving the impulse as well as making the game really unplayable without paying further. It's also about getting the game into the person's hand, mostly for free, then hitting them up with push notifications to come back if they haven't used the app for more than a day, and sometimes a confusing sub-currency system (points or credits) that does random discounts so that people will jump on it.

I've turned on Restrictions on my kids' iDevices and set it to ask for the iTunes password "Immediately" instead of "15 minutes," such that they would be prompted each time they want to activate the iAP feature, a great reminder that you're spending cash to get what you want. I've even turned it on for my own device, so I'm equally reminded it may not be worth it.

Thankfully, I've never spent more than $5 in in-App Purchases for games, and that's on one game: Redline Rush. I bought the two permanent upgrades (the only type of iAP I'm willing to purchase) that doubles the coins picked up and enabling the gems to be pulled by the magnets, which gives a bunch of coins. And that was after at least 10 hours of cumulative, enjoyable play that I thought the developer earned my money.

i don't see any problem. I'm not sick of IAP. I don't make IAPs. I've even disabled them just incase i click it accidentally. I'm not reluctant to download anything.

I've never bought an in app purchase in my life. I heard this discussed topic on the podcast and i can only conclude that the problem isn't largely in app purchasing but a lack of control by the user. I've had asphalt an several racing games like real racing. I either earn the cars or i don't use them. I have poker games, i don't add chips. I earn them or don't play. and i have no impulse to buy in app purchases. If a person can't stop themselves from buying there are impulse control issues that need to be addressed. If you know they are trying to nickel and dime you and you still fork over money then as the article says "you have no one to blame but yourself." And one of the guests mentioned that their wife had no issue, she simply didn't spend more than around 99 cents on in app purchases. Seems quite simply to me. download the free game and don't spend anymore. Earn it or don't have it. That's what i do. No problem at all. I think there is not really a problem.

Well said.....a bit of self-control or monitoring usage goes a long way. Instead of looking at devs/companies, users should look at themselves bc nobody is making you buy IAPs. So sick of this "blame anything/anyone but myself/kids culture.

i'm also not fond of the line of reasoning that "i'm not good enough to pass a level" so i'm going to buy a way to pass it? And then using that as a justification for getting upset that there are in app purchases.

I agree somewhat but IAP games have gotten to where you have grind so hard just to get anywhere and that doesn't fit mobile gaming for most folks to the point that it takes the fun out of it. Iron Man 3 is a perfect example. A couple of the updates have improved but I got so disgusted with just trying to unlock a couple of suits. Grind or pay... Grind or pay... Naturally, attainable progression for a fair price is all I ask.

If it's not fun don't play. Problem solved. Yes, grind or pay. There isn't a single thing wrong with having to work had for a victory. The problem is you don't want to grind. Now if it's impossible to unlock the suits the problem isn't IAP it's game design. You're just using the IAP as an excuse. Regardless, if you reach that point, delete the game. Problem solved. If you fork over money that's you're fault.

I haven't spent a single penny on in-app purchases, I'd rather pay in full. What apple should do is allow consumers to download a title and if they don't like it they can return it in under 1 hour or something like that and get all their money back.

I have a real sympathy with the impact on developers with the customer driven focus of the apps for free or very little cost. Paying a reasonable price has not been an issue and I am pleased to support functional and well designed apps.
Possibly because I am not a big gamer I have spent ZERO on in app purchases.
If I had two choices of app - one paid and one with in app. Then the paid would win, even with slightly less functionality .

I don't mind in-app purchases as long as they aren't required to beat the game. Take Candy Crush. So far I have been able to beat every level without using powerups. It takes me 3-4 days to do the quests to move to a new zone, but who cares? I can pay a buck to skip the quests but I like the extra challenges.

Personally, I would rather the first few levels of a game be free, and then you buy the rest of it in one lump-sum purchase, but that isn't how games are being done. Hey, more power to the developers that have leveraged a way to make a mint. I know that I have made some purchases on a few games like Castle Age. I really see a moderate amount of spending no different than the monthly subscription on an MMO.

The worst thing is the degree to which this has devastated the non-game parts of the App Store… notice that about halfway through the article, you stop saying "app" and start saying "game" exclusively. Now that we've set an expectation that the proper price of an app is zero, there's no way to make a substantial utility or a productivity app and recoup your development costs (Ben Thompson over at Stratechery had a three-part series on this, and I've blogged about it a bunch myself).

That's really bad news for the evolution of the iPad, which was supposed to herald the "Post-PC Era" (and when's the last time you heard anyone use that term?). A few years ago, I would have thought it would be possible to run a small business off an iPad by now, but not without business finance software (QuickBooks, Account Edge, etc.), none of which have been ported from Mac to iPad, despite the fact that the iPad install base is over twice the size. The difference being that you can charge $50-$100 for a substantial app on the Mac, while anything over $5 on iPad is decried as "extremely expensive", if not a "rip off".

I think IAP's started out as a great way for developers to get their game out to as many eyeball's as possible while still giving developers a solid revenue stream. Unfortunately, there are some very greedy developers that have taken advantage of their customers to the detriment of the industry. These developers have violated the trust of their users and now the term IAP is seen in a negative light instead of a way to reward developers for making a great app. It's fair to note that the user shares in the blame.

I'm a mobile developer and this is an issue we've been wrestling with. We think we have a solution. We're starting a KickStarter Campaign on Monday the 26th of August for our new game. Because it's crowd funded it'll be free and supported by IAP's. The difference is the entire game can be played without ever making a IAP. Players that want to get ahead can but if you're looking for a pure experience you can have that too.

The app market is super competitive and getting noticed is nearly impossible. We certainly struggle with getting noticed. Freemium can be a great way for developers to make a good living without making users feel they were duped our of their money.

A developer, like an artist, ought to have morals first, style second.
As for self control, I hesitated to let the youngsters use my iPads. I only let the two use one of them so they can learn to share and rest. They also learned to exercise some self control. But I had to wait until the younger of the two reach grade 1 to put him through this test.
Having Apple put a cap on IAP as a policy might ease the burden on the developer and the parents, but I am afraid it will not make the kid any less 'addicted', it'll just make them cry a bit and get addicted again on another game and run up to the limit again. Behave or no iPad, but give them something else to play with. I find it tricky and I'm not even a parent, just an uncle.

Best solution: hack the game.

I don't care if its theft. Devs steal from their buyers so in retaliation I just hack the apps and devs get no money from me. That will teach them a lesson. I hacked real racing 3 to get unlimited money and gold. That was in retaliation to ea ripping off me with their insane IAP prices.

So just smile and hack away.

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No, only those who rip you off and won't let you play unless you dish out 99 dollars for some premium currency. IAP purchases to unlock games are fine by me.

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From the jailbreak side, I don't remember there ever being as many hacks around for games and ways around IAP as there have been the past 6 months to a year. That's not coincidence.

While I agree with you Peter, some developers have alienated potential life long customers due to their greed. I myself have been pissed off at games that basically force me into handing them my wallet to do anything. If they would have offered me a premium version in the first place that I didn't have to be ripped off in order to play, I would have gladly paid the $20, $30, $40 or whatever it was. At least then I know exactly what I'm spending and I know what I'm getting for that. IAP has been severely abused by many developers. Two games come instantly to mind: Candy Crush and Simpsons: Tapped Out. You literally HAVE to pay tons of money to beat them or not have to wait to play. I would have gladly paid for a premium version. Candy Crush isn't AS annoying as Tapped Out so that I can deal with, at least it gives me SOME options and using Facebook to get lives faster. For people that don't have or want Facebook, it's beyond maddening.

Tapped Out I played for a while and then got so frustrated I just deleted it. That developer lost money because I refuse to be nickel and dimed. So I can see where this mentality is starting to become more commonplace among iOS users. That game is impossible to collect donuts without ponying up tremendous amounts of cash. You could easily spend more on that stupid game than you could buying the entire Adobe Creative Suite. I'm so not joking either.

Developers have figured out how to abuse the system and exploit their customers. First and foremost, Apple needs to put a stop to that by enforcing limits on IAPs.

Im in 100% agreement with allyson. IAP is making it so that I am not even interested in starting those games anymore. I actually found this article by searching for "best games without in app purchases" and no titles actually came up, just articles like this. I refuse to pay by the nose to finish a game without waiting for days or annoying my Facebook friends. I'm just waiting for enough people to be like me so that developers will make more games where you only pay to unlock stuff or pay up front for the game. Side note, I cant believe anyone would ever pay more than a few bucks to get fake "bucks" in a game over and over. That's one of the biggest wastes of money I've ever heard of. Let there be lite versions and then an option to pay up front for a game. Also, gotta give a thumbs up to Ben Thompson's blog stratechery on the topic as well (good point of view for developers) as some of his recent stuff on apple.

nobody ripped you off. Nobody forced you to buy an IAP. This is a silly entitled excuse. You wanna hack your games I don't care but don't act like it's some moral crusade. Don't act like it's justified. That's in your head because nobody made you spend money on IAPs. That's your own fault. Take responsibility.

You must be a dev. Yeah sure you know all about morals. Get off your high horse.

I may not be forced but they don't let you enjoy the game unless you pay. And you have to keep paying just to play. If they charged a premium price once I would not hack the game. But there's no way I'm loosing 100 dollars a week just to enjoy the game. So yeah I will hack and its completely justified. If you enjoy wasting your money on virtual items then that's fine but I'm not ok with it.

I don't hack the apps with a premium price. I pay for those and also those that use IAP to unlock full features.

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Do not insult another member personally again. This is your one and only warning. Next time I'll just hit the ban button.

You have your opinion and you're entitled to that. You can argue your point without attacking someone personally. If you can't, feel free to not comment at all.

Did you read somewhere that there's a moral agreement between you, consumer, and a developer, that a free game entitles you to endless rounds of fun without spending a dime? If you don't like the rules that developer set, just vote with your review and uninstall the game -- simples. And that's how you stay true to your moral compass.

I don't think there is anything wrong with IAPs but I think we're walking a fine line here between what is morally "ok" for developers to do and what's not.

I think some developers have good guidelines and use IAP the way it was designed to be used. But nowadays more and more game devs are starting to realize they can take advantage of customers and the unsettling part is how many are willingly doing it.

I don't agree w/ scamming devs but I don't agree with exploiting customers either. In my opinion, it's time for Apple to step in and rework that system.

One of the 1st things I check out on any "free" app is whether or not it has IAPs.
If it does, I see the IAPs it as one of two categories:

1. "Upgrade" to the full version of the app. (Then I more than likely download the app.)
2. "Bonus" features, such as bags-o-treasure and add-on content. (Which I say, "too bad", then leave).

I particularly find IAP most frustrating in "educational" apps which offer something like an individual "color pack" (red, green, blue...) or an individual "music instrument pack" - talk about trying to milk kids for their allowance [dad's money]! I've seen "educational" apps cost $1-$2 up front, only to actually cost $20+ via IAP to get the whole experience. I'd much prefer to buy the whole thing up front!

Honestly, any app over $10 is not likely to ever make it on our iPad/iPhone. $3-$5 for an app, very reasonable - Up front. We have some great apps that suit our needs very well for that fit this bill quite nicely. Hats off to these developers - they are the ones that we constantly invest our time and money into for the long haul.

The problem is people's perception of what they're paying. You are one of the ones that doesn't fall for the perceived "free" price tag. I own many apps that are over $10 but I knew what I was buying up front. I'm with you, but until people start using their brains, the IAP system will continue to be the chosen model for developers.

I really like the idea for games implementing IAP parameters wherein replenishable items would cease charging after, let's say, 10 purchases. Of course something [IAP] that would be purchased only once as an add-on, upgrade, or DLC would not be affected in the same way and would maintain the standard operating procedures regarding IAPs.

I'd also like to see Apple assert additional guidelines regarding IAP clarity. Some apps offer IAPs for "full" versions, yet also offer other IAPs for for additional features that are more expensive than the "full version" IAP. What gives? I would expect the "full version" upgrade to be the most expensive IAP available.

I would also like to see Apple enforce additional guidelines and protocols regarding feature fleecing. An example I'd offer is a "free" coloring book app wherein children only get 3 free colors, say red, green,

If I download a game, which I do rarely, and find out that it's full of IAPs, it gets deleted immediately, no matter how much fun the game may be. I'll pay to play, but I won't be fleeced. Games aren't really my thing anyway, coming from the BlackBerry world, albeit reluctantly, and I have paid for the productivity apps that I need without any problems at all.

Numerous times I have used IAP to unlock additional features in apps, but have not spent a single penny on "coins, tokens, smurfberries, etc.).

I'm not sure how iMore can complain about the IAP model while at the same time promoting games like PvZ2 or CandyCrush. Anyhoo, it does seems a bit shortsighted to try and force a pricing model from the dead-pc onto the mobile market. If one truly hates the IAP model, then that person can find a platform that doesn't have one and be happy (there's always the Mac, well at least for a little while) or just stop buying apps. I for one am excited that Apple has a flexible and open app store that allows the consumer to dictate what model they want.

Music apps, and IAP are great. Take Amplitube. You get the free version, and buy amps, and effects to suit your style of playing. It is like iTunes. You no longer have to buy a whole album for a few good songs. I am not a gamer, but I can see where the temptation to buy via IAP could get you into trouble. Great article.

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very good point. I have a desktop version but don't have any iphone hardware interface for my phone to guitar connection, but i've looked at amplitude and you're right. You can get just the amps or stompboxes you want. And from using the desktop versions i wouldn't need most cause i don't use them.

The thing people aren't really talking about is how the in-app purchase model is exactly the same thing that Apple said they were steadfastly *against* when they started the app store.

Originally, there was a huge clamour for "lite" versions of apps as well as full featured versions, so that people could buy the cheap version with limited or disabled features and then if they liked it, later pay for the more full-featured version. Apple specifically stated at the time that this was a nasty and deceptive way of doing business (I'm not sure I disagree) and that they would "never allow this sort of thing" in the store.

Now, not only have they relented on that, they created this whole new "freemium" model with in app purchases, that is on the one hand essentially the same deal, and on the other hand, much *more* misleading and much *more* underhanded and deceptive. They've toed the line on censoring out all the boobies, but on almost every other "moral stand" they initially took in regards the app store they've completely caved to the developers, marketeers and other shysters that populate the landscape.

It's disappointing to say the least that Apple hasn't got any kind of feeling for the user and basically doesn't seem to give a sh*t about them.

I'm more frustrated with Camera and Editing IAP apps. As a photographer, tell me what it does, tell me how much you want for it, and let me decide if it's worth it.

For me, I did not spend any dime for a game that has IAPs. I have even completed all the 3 levels (except side levels) in Plants VS Zombies 2 EVEN without spending a dime (IAPs). My opinion is you can just play, play and play, if you want to earn coins or anything under the sun.

Some said they want full upfront apps but for me, it's reversed. We have a credit card in my iTunes account for my iPad 2, but I did not use it because our credit card is used for daily needs (food, clothing, etc.) because I only live in an average family in Quezon City, Philippines (I'm a Filipino who supports free or even freemium apps). I only want to download some premium apps when it became free for a limited time (I have handfuls of premium apps which in majority, downloaded for free for a limited time).

Also, in some apps, if you want to make your photos nice, you must pay something. If you want a nice sticker for a chat box (we chat for example), you must ALSO pay something.

Next, I also turn on IAP restrictions in settings. This is a good way to prevent kids from buying coins in accident. But Apple must implement a deal to make paid apps some demo versions ala-PC or MAC. (60 minutes to 1 day for games or 15-30 days for apps)

I am an average skilled, middle aged, female gamer who doesn't mind an IAP to unlock the full version, but I stay away from a game that has the "nickle and dime" list of IAPs. My reasoning is this, if there is a laundry list of many IAPs then most likely you will have to purchase something to progress. If a game says that it is beatable, but you have to grind like a freak, I may go ahead and get it and see if I can learn how to beat it. If I can't, I don't purchase anything and delete it.

If the devs are honest enough to tell you that "you can progress without purchasing anything, but it'll be easier on you if you do purchase something", I am more likely to give it a try. I would rather have one price to unlock everything, but the reality is I have to make that choice. I just want to be able to get to everything if I can. The nickle and dime method is a drag. If they do that exclusively, like Candy Crush, then I don't even look twice at it.

A few points:

I don't 'mind' IAP's if it's done right, and not in a way that makes the game impossible to progress (i.e. ridiculous excessive grinding) or is used to essentially make a 'demo' version of a game, with an IAP to unlock all the levels.

Two great examples of this are Rock Climb Racing and Auralux. RCR because the game is perfectly playable and beatable just by playing through. Yes, buying money to progress is faster but the time to grind it out yourself is not excessive, not to mention fun.

Auralux has a level from every level pack style included with the free purchase (a 'demo' so to speak), with various style level packs for a one-time fee, and that's it. Buy the level pack once and you're done.

These are examples of IAP's done well, and I have no problem with them.

On a different note, I plunked down $20 for XCOM: Enemy Unknown, and have not regretted it once. Fantastic console quality game that I've greatly enjoyed, I've gotten my money's worth. It would be a far FAR less enjoyable experience if they went the free to play model with "unlock a sniper for your squad for only $2.99!", recruit new squad members to replenish your ranks for $5.99!". It would have sucked far more then. I hope we can still have the option of paying up front for high quality apps and games without getting nickled and dimed to death. Problem is that business trend is too many cheapskates balking at paying a mere few bucks for a quality app, and opting instead for IAP freemium apps that race toward the bottom. I don't like this trend.

Players of Draw Something 2 will gonna get over 10,000 or more likes because their drawings are made of brushes that are nice. If you want a nice brush, you need to pay more like coins/stars.

In Repix, drawings are so nice because Repix fans buy some brushes, frames and effects. They are so greedy (sorry for the word) because in the newest update, we didn't get any free brushes.

If I see "Offers In-App Purchases" in an app's description, I think twice about downloading it in the first place. And if I already have it on a device, I avoid any in-app purchasing and/or delete it if it pesters me even in the slightest.

Never bought a Mighty Eagle during my Angry Birds career. Three-starred all levels except the Facebook and final "Bad Piggies" levels. Despised the Bad Piggies concept so much I deleted the app. Done with Angry Birds.

The solution is simple. Don't install freemium apps. There are still developers who do charge a set price for their apps. Buy from them.

But then again, they say there's one born every minute.

My issue with In App Purchase games is the inability to filter them in the App Store, I would love to be able to search the App Store and filter out games that offer repeated purchases, such as coins, tokens, treasure bags or whatever without having to go into each game and see, I am happy to pay for one off upgrades, such as furniture packs in home design 3d, but paying over and over, and over for coins etc is a joke, I refuse to buy any game with in app purchases, but first have to find one without IAP, which is the hard part

I am so frustrated with the lack of functionality. I want apps that are just as good as their OSX counterparts. It's true that nobody forces you into an in app purchase but some games are designed not to be games at all. Their primary goal is to get you to spend money to beat a level or boss and then once you've purchased all the upgrades the rest of the game sucks! I am already looking for ways to do everything I do on my iPad on a laptop. When I do it's goodbye iPad 2! The entire platform is little more than a scam. I'll get another Apple tablet when or if it ever runs the same OS as a regular Mac and can use all the same software. If you look at what these things cost, why would you accept any less?

Almost all the commenters here assume that everyone is about as smart as they are and can make intelligent choices. Sadly, this is not the case. Think of all the autistic children and adults who use the iPad for communication. Children use iPads and adults who never managed to graduate from high school use iPads. There are people who need to be protected from unscrupulous scammers and some unscrupulous scammers are also game developers.

I let my self get suckered in. .99 cents here and there and then my favorite game plants v zombies came out with their second incarnation with 3&4 dollar iap's. I easily would have paid 20-30 dollars for a no nonsense fully functional version. No more. This is the year I quit iap bassed games. If I can't find full access full version games I guess I'll hafta read or watch tv or something.

I have a major problem with this. I always want everything the game has and I end up spending WAY too much on in app purchases. It's hard for me to regulate myself because I just tap the screen a few times and POOF there goes my money. It doesn't sink in how much I'm really spending until I look at my bank account and want to cry. But it seems unfair to make it so I can't finish a game without paying crazy amounts of money. If they came up with the pay to unlock and then be done thing, that would be great. In the meantime, I really have to be more careful with my IAP problem. And I also argue with myself for several minutes about downloading a game that looks really fun, but that obviously requires IAPs to get through it.