In-app subscription – a Game Changer?

Google recently announced they will be supporting subscription billing in their in-app billing engine. A Senior Vice President for Glu said “In-app subscriptions allow us to offer entirely new types of products, things that just weren’t possible before,” — “This is huge for us and game developers in general.”

So will subscription really be this huge? Maybe, maybe not. If you look at the social gaming space online, there is clearly a heavy bias towards virtual currencies and item billing, although subscriptions are becoming popular (billing providers like PlaySpan recently announced support for subscription services). There is a reason for this. Subscription simply do not work for all types of services, and can be prohibitive from monetizing users who do not want recurring transactions happening. Also, subscriptions require a lot more managing and hand holding of users (switching plans, canceling before term, messaging before renewal, setting ideal bundles, etc, etc).

You can tell that we at CodeNgo are not sold on subscription being as big as item or per download billing. We do however thing it is a pretty important step as it will allow developers to experiment with the category. But we certainly fair the old days of subscription billing for mobile content where users were overcharged for content they did not want. If subscription billing is you choice, then make sure you do you research behind the economics of how you do it correctly. We will provide more research and background on this topic in the future.