As TLDR Executive Producer Katya Rogers will tell you, kids have an uncanny ability to figure out your passwords when they want to buy a Minecraft mod on your iPad. Over time, that kind of in-game purchase can really add up, the most famous example being a kid who bought $6,000 of in-game garbage.
The FTC has been trying to fine this problem away for a whille, with Apple agreeing to $32.5 million in consumer refunds for in-app purchases by kids at the beginning of the year, and a promise that it would add extra layers of protection to keep kids from being able to make purchases in the future. Now, the FTC has announced a new lawsuit against Amazon for making it too easy for kids to buy, as Boing Boing puts it, "game weapons, clothes and other virtual bullshit installed on its Kindle Fire gadget."
Mobile games essentially have three ways of monetizing: an upfront cost to purchase, advertising that runs as you play, and in-game micro-purchases. As the app ecosystem has evolved, it seems that the in-game purchase has become more and more common, and I say this not just as an industry watcher, but as a gamer. In Betaworks' sequel to the incredibly addictive "Dots," it allows you to buy one of two 99-cent options to continue every time you lose. "Words With Friends" allows you to buy tokens with which you can purchase power ups allowing you to essentially cheat in the game. Triple-A game developer EA caught a lot of flack for making its iOS version of "Dungeon Keeper" virtually unplayable without constant in-app purchases.
The FTC is not the only regulatory body that is trying to crack down on this behavior. The EU has asked Google and Apple to try and make consumers aware of the true costs of a game, avoid making direct asks for money, and provide some kind of contact info for unhappy parents. Last week, the UK's Advertising Standards Agency ruled that EA could no longer advertise "Dungeon Keeper" as a free app.
There is a tiny part of me that sees a need for better parental supervision and better media literacy, but I'm wise to the fact that without any oversight, designers are going to try and make as much money as they can, even if it means charging 50 cents to get beyond the title screen. So I'm all in favor of requiring designers to make it harder for kids to purchase without their parents' help. But it is the goal of a number of designers (talkin' about you here, Zynga) to make games where in-app purchases are either absolutely essential or incredibly difficult to discern, so if the FTC really wants to eliminate this practice, it's got a long way to go.