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Beware the legal traps hiding in freemium games

Free-to-pay, or “freemium,” games are not only wildly popular, they’re hugely profitable—with top earners pulling in over a million dollars a day. Some of the biggest grossing titles you’ve probably heard of include Mobile Strike (made famous by Arnold Schwarzenegger and some very expensive Super Bowl advertising), Clash of Clans, Pokémon GO, Candy Crush and 8 Ball Pool. “Freemium,” of course, is a misnomer. While all of these games are free to download and play (to an extent), they generate revenue through a simple combination of in-game purchases and advertising. In-game purchases can include everything from additional lives and gold coins for spending in-game, to character upgrades, special “skins” and quicker completion of activities. The financial beauty of the model is that most in-game purchases are effectuated through an existing account through the applicable app platform or store, so that users may not have any real notion that they are spending money. We’ve all likely heard of or seen stories of users spending thousands, and sometimes tens of thousands, of dollars on in-game purchases.

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