This feature you're talking about is known as "In-app purchases" and is used to allow the users to purchase the products of you applications. No matter what product or item in your application, it can be a feature, an upgrade or a service etc.
You can learn more about such feature here, on Android Developer
] website. Answers to your questions are already posted on that web page, in case I want to qoute them out here for you.
- Yes, you can allow the users to purchase an item with better features and capabilites by paying for them to you. Google will take care of the transaction, and user will get the item once your account gets the payment.
- According to that web page:
Quote:All purchases are “managed” (that is, Google Play keeps track of the user's ownership of in-app products).
- As above, user will own the item, even after re-installing. Google Play services, or Play Games (by Google) can be made use of in this scenario to start the user's state from where he left off with all of the packages and items.
- Items are stored in the Google account, not the device (unless you want them to) so whenever the John logs in again, he will get his sword back.