About a week ago, I was at a bar with a friend of mine in the East Village and we ordered a cocktail. I’m often asked what I do and in the course of talking to the owner, we started talking about iPhone games. His big complaint was with freemium games, especially those with “pay to play” structures. That is, games that allow you to purchase your way to victory rather than spend the hours required to master them. For a parent, this puts you in quite an odd spot with a frustrated child. Your son or daughter knows that you have the power (i.e. money) to make their gaming lives easier and the parent has to make a calculation of how much their sanity is worth at the hands of a disgruntled child.

This issue highlights a recent decision by a Federal District judge in San Jose who has so far sided with parents in a class-action lawsuit against Apple regarding “bait apps.” The problem lies with the 15-minute window in which a child can purchase items without parental consent if the password has already been entered. Kids can then rack up hundreds of dollars in charges. The Times outlines the problem:

The business strategy for these “bait” apps is called freemium, as in free meets premium. Freemium apps have generated about 65 percent of the revenue in Apple’s App Store, according to Flurry, an app analytics company. One wonders how much of that money comes from children sneakily using their parents’ credit cards.

The case may eventually be thrown out in a higher court, but it shows the tensions that arise as games employ new business models to hook consumers.

[via NYT]