The European Union is lending a closer eye to the practice of "freemium" mobile gaming apps in an attempt to protect consumers from in-app charges.
"Freemium" apps are those like Candy Crush Saga or Tetris Blitz that are free to download but have in-game opportunities to pay for upgrades or whatnot. Perhaps perfected by Zynga and its cash cow Farmville, the freemium model now has become a regular go-to for games looking to monetize.
But a crackdown would help very few people: about 98 percent of people never make in-app purchases at all, according to a new report on mobile gaming from Swrve. If you've spent any money within a gaming app, you are in the vast, vast minority of users.
The EU, though, is worried that the money-making is coming because of some trickery. Google, Apple, and other industry leaders will meet with the EU on Friday to discuss protecting gamers from the “unexpected costs from in-app purchases,” the EU said in a statement. "Misleading consumers is clearly the wrong business model and also goes against the spirit of EU rules on consumer protection," the EU added.
Those "consumers" are quite the small group, though. Most of the revenue from freemium games comes from a minuscule percentage of users: "whales," as they are called. A new analysis from app testing firm Swrve, highlighted by Re/Code, found that 98.5 percent of game players never make any in-app purchases in free mobile games. Within that tiny 1.5 percent that have spent any money, the highest-spending ten percent account for just over half of all revenues. Basically, .15 percent of game players are supporting the rest of the world's gaming habits.
It's not yet clear what plans the EU has for the gaming platforms at the Friday meeting. Count on one thing, though — plenty of whale watching.