Good news for game developers and people who hate “Lite” iPhone apps: Apple is now allowing purchases directly from within free apps. This feature was previously allowed only for paid apps.

Certainly the decision will affect anyone who develops a “Lite” app that has less features than the paid version, as it’ll let them combine both into a single download. But my mind jumps straight to gaming, which could see a rush of apps with paid microtransactions to unlock extra content or features.

Consider, for example, an MMORPG. Apple’s decision will allow developers to adopt a free-to-play model, charging players for extra items or abilities. Some games, such as Mafia Wars, were already doing this by having players purchase entirely new app for their upgrades, with their stats preserved. But the new solution is much more elegant, as it allows people to keep playing with minimal interruption, and without scrapping the app they already have.

That makes me wonder, what will the economy of iPhone microtransactions look like? If buying small bits of content is going to be a lot easier, I’d expect there to be a lot more of it, except for one snag: The iPhone economy is already dirt-cheap. The majority of iPhone apps are free, and the average price of a paid game, according to a recent study, is $2.50. People aren’t exactly throwing around fistfulls of money on the App Store, so even a handful of $1 microtransactions in a single game could be a tough sell.

I doubt that transactions for less than $1 would be allowed, but I think the cleverest free-to-play game developers will find a way to break it down. Perhaps they could sell credits, $1 at a time, that let you download a handful of in-game items. However they work it out, microtransactions will have to get extremely micro to thrive in the App Store.

 
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