Eric Johnson

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Swrve Says It Can Help Developers Dodge Fake Purchases Made by App Pirates

piratesFor some mobile game developers, a key indicator of success is the tiny percentage of big-spender players — often called “whales” — whose purchases of virtual goods subsidize the free-to-play app for most everyone else.

But if whales are their dream, then their nightmare is another maritime metaphor: Pirates! That is, players who spend nothing and get everything a game can offer, by circumventing the in-app store.

At least, that’s the pitch behind app marketing service Swrve’s latest product for top clients, a “fraud filter” for iOS that tries to sniff out fake purchases and keep those moneyless swindles out of the store data that influence developers’ design decisions. Swrve CEO Hugh Reynolds said fake in-app purchases are only conducted by a “very small minority of hackers,” but that their hijinks can undermine any game that offers IAP.

As developers acquire more and more users over time, Reynolds said, they “need to know whether they’re attracting great-looking pirates or mediocre-looking real users.” And he’s not talking about physical attractiveness.

Put another way, it’s possible for eager developers to pour time and resources into users who seem to be spending like whales, only to get a nasty shock when they receive their monthly check from the App Store and see that the total is a lot less than expected.

That scenario underlies why the problem is so persistent, the CEO said: As far as Apple knows, these fraudulent purchases never took place — and so those closely-watched “top-grossing” charts remain unaffected, as do the payouts to app makers. It’s only on the developer’s end that the purchases seem real, and that confusion is very bad news for tools like Swrve that try to help developers optimize their stores to encourage more (real) purchases.

Unfortunately, Reynolds couldn’t disclose any specific apps that he knows to have had problems with pirates, because he believes doing so might scare off new users, which is understandable, even though users’ security isn’t directly threatened by this sort of hacking. However, Swrve’s clients (according to its website) include Activision, EA, Epic Games, Gameloft and Storm8, and Reynolds said the first group to get the fraud filter will be big “Top 10” developers on iOS.

He repeatedly stressed that the number of users who “steal” from virtual stores in this way is small — much smaller, proportionally, than the amounts that they are seemingly spending.

“Although in many cases the number of individuals involved is not large, the amounts of revenue certainly are,” Reynolds said.

The fraud filter works by sniffing out clues that these users are behaving abnormally. For example, it might flag anyone “spending” hundreds after only a few minutes of using a free-to-play game, which would be extremely abnormal even for a deep-pocketed whale.

Reynolds compared in-App-Store pirates to credit card fraudsters, locked in an unending battle with the credit companies. The goal, he said, is to “make [fraudulent purchases] as difficult as possible and unrewarding as possible, but it will always be happening.”


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