What are in-app purchases? Meaning and strategy

In-app purchases have become a pivotal revenue model for digital products, particularly with the rise of mobile apps and games, offering users additional features or cosmetic enhancements for a fee. These purchases are often more convenient and accessible than traditional software monetization methods, which required physical purchases of expansion packs. The transition to digital in-app purchases gained momentum in the early 2000s with improved internet access and was further popularized by the release of the iPhone in 2007. While in-app purchases present significant opportunities for revenue growth and user engagement, they also raise ethical concerns due to potentially manipulative sales tactics, such as loot boxes and virtual currencies, which can exploit consumer behavior. As these practices come under scrutiny, particularly in regions like the European Union where loot boxes are being investigated as potential gambling, consumers are encouraged to remain vigilant and informed to avoid falling into spending traps.