Epic Games to Charge 12% Fee for App Sales From Alternative iPhone Store

[Arsenikdote]

My example was to show that Apple no longer has a monopoly on the apps that can run on iOS so they cannot stop a developer from listing/selling their apps on alternative stores. Earlier they had so they could misuse it. Now they do not have it so they cannot misuse it because the consequences may be immediate.

Apple can take fees for listing the app in their Appstore. The quantum may be up for discussion but the fact is that nobody is telling that Apple has to do it free.

However, in-app purchases are extra features that an App offers. Apple has not contributed to the development of the extra features and is not sure why it feels it is entitled to a cut in that. Once the alt appstores come and offer their listing at a lower rate, Apple will also lower its rates to compete. That is what competition does and Apple is terrified that such a future will come to pass.

Just because it has a monopoly on the apps that can be listed in the store, they are exploiting it with many such irrelevant rules. I am sure all the governments are interested in attacking that part.

Why do I need to have run a business and paid salaries to employees to know that it is illegal to stifle competition using one's dominant position? Nobody is asking Apple to not make money. They Just should not make it at the expense of the competitors by stifling their legitimate rights.

I think I agree with you on a few things but certainly disagree on a few others. Best to keep things separate rather than combining different points.

Apple having a monopoly. This I can say is both good and bad. Good in the sense that they built something that didn't exist before. They took a chance and it paid off. Before Apple did this, "smartphones" were not that smart. I have had pretty much every version of smartphone that was ever made. No comparison once the iPhone was launched. Apple changed the landscape. They are now considered a "monopoly" because of their success. No one considered them a monopoly on day 62 even though things worked the same way they do today. But also having a company have total control over a now common computing sector does present a problem. I do feel like changes should be made, but I also want to persevere the incentive for people and businesses to attempt to make the next new segment without fear of being labeled a monopoly once they are successful.

Now, you changed to a topic that I totally agree with and that is specifically your comment about stifling competition. I think the biggest thing that needs to be addressed is when Apple expands their software to directly compete with apps in the App Store. I feel like THAT is a problem and it needs to have some legal action taken in some form to protect the App Developers. For an easy example, Apple Music and Spotify. However, even the new Journal app that Apple launched will impact apps like Day One.

Where I am in complete disagreement is in your statement about in-app purchases. If Apple didn't make money on in-app purchases, everyone would make their app free and then only charge or in-app purchases. Also, why are you arbitrarily drawing a line with the features that are part of the "core app" vs "in app" features? Why does Apple get to make money on some and then not others? What makes "in app" revenue sacred? Revenue is revenue. Whether an initial purchase or an in-app purchase, an app has value, attracts a buyer and gains revenue from that value. Most of the time the in-app purchases are very strategic by the developers to coax revenue from the buyer. I have helped many iOS developers with this process. It isn't "extra" money, it is just getting the money from the buyer in the way that the buyer would find the least offensive and thereby produce the highest conversion rate.

 

[Sophisticatednut]

I am not sure what you are doing here? You keep pivoting your topics. Are you just trying to "win"? Fine you win. I don't really care about winning, I care about discussion. If you want to have a real discussion then great!

It’s not about winning, but clarifying what the reality of the world actually is.

The UE5 is a game development tool. You can make simple 2d games or advanced 3d games.

90% of App Store revenue from gaming? No. Try closer to 60% and that includes games that broad audiences play such as Monopoly Go, which has ranked in the top 10 for quite some time. The types of games that make up the bulk of the App Store revenue don't give two %#&$ about the unreal engine. They are the premium games that my aunt plays and her Words With Friends and other games don't need anything from Epic. They need eyeballs, which the main App Store will have.

Unreal engine is just one of many game tools just like unity it is what you make them to.

Epic provides a lot to developers who use their store just like Apple does if you actually take the time to read it.

Again, if you are talking about the minority of gamers and game that need and will use the unreal engine, you have a very valid point. And all of those people moving to some alternative App Store will lower revenue for Apple, raise revenue for Epic, and potentially overall raise the post-cut revenue from those specific developers.

But for the Candy Crush games, the ones that represent the bulk of the 60% of the App Store revenue, they won't change as it would be a bad business decision, especially considering the age of their audience.

Why on earth would anyone move to an alternative store? Nothing prevents them from having the same apps in multiple stores simultaneously without any changes. And if they want best of both worlds they could just open a separate Apple developer account and post the game with both the 0.50cent fee or the 15% fee

 

[Arsenikdote]

The UE5 is a game development tool. You can make simple 2d games or advanced 3d games.

Here is what you have done. I asked what Epic was doing for developers since Apple is providing everything from the hardware to the software. Here are your comments:

Hmmm the unreal engine? One of the best SDK on the market currently for developing a game?

followed by

The unreal engine can be used for iOS, android, windows, Mac , Linux, steanOS.
What can Xcode be used for?

followed by

The minority of smartphone gamers that just happen to account for 90% of the AppStore’s revenue?

You are really driving hard that the Unreal Engine is really good. Sure, great, it is. But the businesses making the most money on the iOS store from games are not using it. They don't need to. It doesn't matter if you CAN use it, they aren't. They are making a ton of money without using it. So back to my original point, what is Epic offering them? The answer is nothing other than less revenue from less people.....which brings up the next thing...

Why on earth would anyone move to an alternative store? Nothing prevents them from having the same apps in multiple stores simultaneously without any changes. And if they want best of both worlds they could just open a separate Apple developer account and post the game with both the 0.50cent fee or the 15% fee

Yes something does prevent them....Apple. Apple states that if you list your app in an alternative App Store that you are not allowed to list it in their App Store and that the move is permanent.

Again, I have agreed with you that for apps that are focused on "true mobile gaming" and not Words With Friends games, those developers might find a good fit in an alternative App Store like Epic is going to create. However, for the bulk of apps who want access to the largest audience, they are going to stick with Apple.

 

[Beautyspin]

I think I agree with you on a few things but certainly disagree on a few others. Best to keep things separate rather than combining different points.

Apple having a monopoly. This I can say is both good and bad. Good in the sense that they built something that didn't exist before. They took a chance and it paid off. Before Apple did this, "smartphones" were not that smart. I have had pretty much every version of smartphone that was ever made. No comparison once the iPhone was launched. Apple changed the landscape. They are now considered a "monopoly" because of their success. No one considered them a monopoly on day 62 even though things worked the same way they do today. But also having a company have total control over a now common computing sector does present a problem. I do feel like changes should be made, but I also want to persevere the incentive for people and businesses to attempt to make the next new segment without fear of being labeled a monopoly once they are successful.

Now, you changed to a topic that I totally agree with and that is specifically your comment about stifling competition. I think the biggest thing that needs to be addressed is when Apple expands their software to directly compete with apps in the App Store. I feel like THAT is a problem and it needs to have some legal action taken in some form to protect the App Developers. For an easy example, Apple Music and Spotify. However, even the new Journal app that Apple launched will impact apps like Day One.

Where I am in complete disagreement is in your statement about in-app purchases. If Apple didn't make money on in-app purchases, everyone would make their app free and then only charge or in-app purchases. Also, why are you arbitrarily drawing a line with the features that are part of the "core app" vs "in app" features? Why does Apple get to make money on some and then not others? What makes "in app" revenue sacred? Revenue is revenue. Whether an initial purchase or an in-app purchase, an app has value, attracts a buyer and gains revenue from that value. Most of the time the in-app purchases are very strategic by the developers to coax revenue from the buyer. I have helped many iOS developers with this process. It isn't "extra" money, it is just getting the money from the buyer in the way that the buyer would find the least offensive and thereby produce the highest conversion rate.

I wrote my post a long while back so I'm not sure what it actually was about. I think it was about what the DOJ suit says rather than my own opinion.
Features of an app are based on the creativity of the app developers. Why should Apple collect money from the revenue that app developers get? Is it not Apple's argument that hosting, listing, and other services are the ones for which Apple charges? How does in-App services come into the picture? It should probably charge based on resources used, rather than what the App charges for itself. For example, a calendar app can charge for number of API calls (this is just an illustration so not accurate) rather than the cost of the App because the cost of the app depends entirely on the value add that the app developer brings to the app whereas Apple's contribution to a calendar App that charges $10 or $70 is the same (just for the sake of an argument), which is the use of APIs. Other than making APIs available, Apple is contributing nothing in making a calendar App worth $70 when there is another calendar app that sells for $10. Why should Apple charge more from the second app when it was the creativity of the developer that has resulted in better revenues.
Same case with in-App purchases. Unless they utilize Apple's resources, Apple should stay away from dipping its fingers in that revenue.

 

[Arsenikdote]

I wrote my post a long while back so I'm not sure what it actually was about. I think it was about what the DOJ suit says rather than my own opinion.
Features of an app are based on the creativity of the app developers. Why should Apple collect money from the revenue that app developers get? Is it not Apple's argument that hosting, listing, and other services are the ones for which Apple charges? How does in-App services come into the picture? It should probably charge based on resources used, rather than what the App charges for itself. For example, a calendar app can charge for number of API calls (this is just an illustration so not accurate) rather than the cost of the App because the cost of the app depends entirely on the value add that the app developer brings to the app whereas Apple's contribution to a calendar App that charges $10 or $70 is the same (just for the sake of an argument), which is the use of APIs. Other than making APIs available, Apple is contributing nothing in making a calendar App worth $70 when there is another calendar app that sells for $10. Why should Apple charge more from the second app when it was the creativity of the developer that has resulted in better revenues.
Same case with in-App purchases. Unless they utilize Apple's resources, Apple should stay away from dipping its fingers in that revenue.

LOL, yeah I went on vacation so it was like a week ago

I hear what you are saying and I can understand that perspective. That perspective though is ignoring how anyone got to that place to begin with. Its starting in the middle rather than at the beginning.

Let's talk about the calendar app example you gave. From your example, since Apple didn't code the app that makes it better or worse why would they have a right to more of the revenue? The answer is because the developer agrees to a Net Revenue share system in order to even have an app to begin with. It has nothing to do with how successful or not an app is, it has nothing to do with a "right to dip fingers" into something, it has nothing to do with creativity. All of those things are AFTER the developer enters into an agreement with Apple to use their platform. What it has to do with is the terms the developer agreed to before they built the app in the first place. They agreed to a revenue share model. This shares revenue, and in-app purchases are revenue and therefore are part of the agreement that was made before a line of code was written. From this perspective then, features are created to attract customers and create a value that consumers then purchase to create revenue. That revenue is then shared, per the agreement.

Side note: We like to humanize "developers" and dehumanize "corporations" in this argument, but they are one and the same. The "developer" is still a business, and would be identical to Apple if they had the same success. And Apple would be identical to a "developer" if they hadn't had the same success. They are two businesses coming to an arrangement.

So, could/should the model be changed? Sure! As I said, businesses engage with each other in different ways and a new way of engaging between businesses could be created. We are seeing this actually with the EU forcing Apple to change the way developers can put apps into the ecosystem, this exact shift in the way businesses work with each other. In this new way, other people can do App Stores other than Apple. However, Apple still gets to set the cost of doing business with them. They still own their platform and get to set the rules for their property. So Apple setup a pricing model that is not very attractive, but does technically allow for other App Stores to operate.

So is it "fair" that Apple gets to set the rules like this? From one perspective no. Smartphones have become so ubiquitous that it seems not very fair that only a couple companies end up being the "gatekeepers" to the entire industry. It seems like there should be more options and less control by a select few. However, from another perspective it is completely fair. That perspective is capitalism. The very system that we use to allow businesses to build and be "successful" creates these exact paradoxes. If you are REALLY good at capitalism then you essentially create something that others will think is "not fair" because you become a new "standard" at what you do and thereby have control over it because you built it.

Honestly my biggest concern with the control Apple has in this is not how much they are charging but rather when they decide to develop and release software that does the same thing as apps in the App Store. Take Apple Music for example. I think this definitely needs to be addressed by the government and there needs to be consequences for Apple doing this. It is completely anti-competition for Apple to enter a market space that other apps are in. They have countless advantages. This playing field needs leveling. However, for Candy Crush? They are in an arrangement with Apple whereby they get to build an entire business and make millions because Apple has built the systems to allow it and Apple asks them to pay 27.5%-12.5% to do so. From every App Developer I have worked with (including some of the very first in the App Store), everyone is happy with the arraignment. The only REAL people upset are the largest corporations who don't want to give up that much money to Apple. That is understandable. Large companies try to leverage better terms for their contracts all of the time, but in this case the app side parties don't have leverage. This makes them upset and they take to the media and spin tales to try and get traction to change things so they have a better negotiating position. While I can understand the maneuver, it is smoke and mirrors and unless we want to change from capitalism, Apple isn't doing anything wrong.

So Apple charging commissions....just playing the role of a capitalist. Apple sniffling completion due to unfair advantages when it competes with other apps? Worth investigating and changing.

 

[AppliedMicro]

Now they are being penalized for being successful.

I wouldn't call that penalised at all.
They're free to sell iPhones at whatever price they

So Apple launched the iPhone and had multiple generations of products in their roadmap without ever thinking they would do an App Store. This shows that they still thought the business idea was sound without planning on having that revenue

Not for long.

When rumours made the rounds that Google was developing a competing OS that allowed for development and installation of native apps, Apple couldn't change their tune fast enough and pre-announce that an SDK would be coming.

Maybe look at it a different way, how does Spotify contribute to the continuation of the platform they rely on for their primary business to function?

They - or rather the whole ecosystem of third-party apps - help Apple in selling hardware devices (iPhones).
Not only "help" - they enable Apple to do it. It this ecosystem did not exist, Apple's iPhone business would be toast.

There's an obvious imbalance of power here: Spotify is but one of thousands of developers and offer only one particular service - which has competitors that consumers can easily switch to. Whereas Apple provides the platform for all apps on iOS. Apple can easily "lose" one third-party developer abandoning their platform (even if it's a high-profile one like Epic or Spotify) - or by revoking their access to the platform themselves. Whereas third-party developers can hardly lose access to iOS without major detriment to their app/business.

I am not sure why people feel like 15% is too much when that includes CC processing fees of roughly 2.5% so now we are talking about 12.5% to Apple (or Google) or whomever.

Credit card fees are less than 2.5% in Europe (for consumer payments - on which fees are regulated by the EU). At least for the "big boys" (that would otherwise pay 30%). 15% is still a lot, a multiple of that.

That said, I do believe that Apple would face less criticism from developers and headwinds if their commissions were "something closer to credit card prices".

Again consider no matter where the user purchases it will be a 2.5% CC fee so the 27.5% Apple fee in year one goes down to 12.5% for all following years
Since Spotify has only a roughly 5% churn rate on it's premium subscription, the amount that Spotify pays is no where near 30%

I suppose their 5% churn rate is for all platforms combined. In which case they may actually benefit from not offering in-app subscription management (cause it makes it harder for consumers to unsubscribe).

But to be fair to Spotify, not only Apple is offering a competing service - they're also offering all of their customers free 6 month trial subscriptions when setting up or updating an Apple hardware device. If I did that, I'd certainly "pause" my Spotify sub - after which Apple, should I subsequently decide to switch again, would charge them a 30% commission anew.

 

[Arsenikdote]

I wouldn't call that penalised at all.
They're free to sell iPhones at whatever price they

Let's use my whole statement...

think it is a tough place for everyone to be. Apple did something that no one had before. They successfully created the mobile computing market. They did so with billions of money in R&D, they did so with no guarantee of success. They did so over the period of years and years. Their hard work and gamble paid off. Now they are being penalized for being successful. On the other hand, once something becomes so successful that everyone uses it as part of their daily life, other rules might need to apply. Rules that don't favor the creator of the successful thing (aka monopoly/anti-trust rules). I think this is tough because you don't want to penalize people/companies for taking risks and working hard and becoming successful. At the same time you need to have checks and balances in place.

Based on the money invested in R&D and the creation of an entire ecosystem, Apple and Google also are free to charge for their platforms that allow apps to exist at all. Without them, lots and lots of businesses would not even exist today. These companies built platforms and have a right to charge for the platform in addition to hardware, regardless of how successful or ubiquitous they become. And trying to dictate how much a company charges for its goods and services is a penalization. It is not ok to have a business start up based on the principles of capitalism and then when they are successful, try and change the rules on them and make it about being "fair" .... capitalism is not fair. And whether or not we should have our economies run on capitalism is a different topic

Not for long.

When rumours made the rounds that Google was developing a competing OS that allowed for development and installation of native apps, Apple couldn't change their tune fast enough and pre-announce that an SDK would be coming.

They - or rather the whole ecosystem of third-party apps - help Apple in selling hardware devices (iPhones).
Not only "help" - they enable Apple to do it. It this ecosystem did not exist, Apple's iPhone business would be toast.

It feels like you ignored/skipped over a lot of what I wrote. I was trying to show a concept here of building a better mousetrap (aka a better phone than Nokia or HP) is a viable business option and in fact is what made the original iPhone so popular and a success. It launched with only Apple apps but was so much better than the Nokia's and Palm Pilot's of the current day that it stood on its own merit without apps.

It is not fair to make a comparison of how the iPhone 15 would fare today if it couldn't have apps. If the iPhone 15 doesn't have apps, those apps also don't exist. So the very people who wouldn't purchase the iPhone 15 because it didn't have apps, would even know "apps" exist so therefore wouldn't be upset. They WOULD purchase the iPhone 15 because it is best smartphone (without apps) because no smartphones have apps. See how that works? The street has to go both ways. You can't say "if the ecosystem didn't exist" and then use the expectations created by the ecosystem to say it would fail.

However, I will also completely agree that apps help sell iPhones. I remember having the original iPhone and then when it came out and being so excited when the App Store was released and seeing all kinds of amazing apps being added to my iPhone. I remember experiencing how much better native apps were to web apps and being excited for more and more apps to be developed. But the relationship is not as one-sided as you are making it. I think it should be looked at more as symbiotic relationship. There is no way that app developers could develop their app AND the platform that runs it AND the hardware that needs to run it. So they need Apple/Google/Samsung as much as Apple/Google/Samsung benefit from them. This is not a zero sum situation.

There's an obvious imbalance of power here: Spotify is but one of thousands of developers and offer only one particular service - which has competitors that consumers can easily switch to. Whereas Apple provides the platform for all apps on iOS. Apple can easily "lose" one third-party developer abandoning their platform (even if it's a high-profile one like Epic or Spotify) - or by revoking their access to the platform themselves. Whereas third-party developers can hardly lose access to iOS without major detriment to their app/business.

Yes, there is an imbalance of power. But that power imbalance is the benefit you get when you develop a platform that everyone takes advantage of. A business taking advantage of something that another business builds won't have the same power because they didn't build it, they are taking advantage of it. Tire manufacturers don't have the same leverage/power as the car manufacturers because they are leveraging the system that was built for them. They benefit because cars exist and that makes their tires have value. Why should business A let business B do the work and then expect business B to let business A have the same power/leverage? That doesn't make any logical sense.

I think the problem is when some of these platforms become so ubiquitous that they almost become akin to something like internet providers. Comcast has rules put on it by the government because their service (the internet) is something that is considered a core utility. If we are going to call App Stores core utilities than after that legislation passes, the balance of power might need to shift. But until then, the balance of power remains offset because the ruleset is capitalism and the entity that built the platform that everyone wants to be on has more power.

Also, that doesn't mean I am blind to the fact that not having the power can really suck for some businesses. I can completely understand that. But I don't feel sorry for the billion dollar organizations who are mad because they don't have bigger profit margins. They should be mad and complain, and try and figure out how to get more money, that is what they do. But just the same Apple is trying to do what it does to make money. It is all the same coin, just two different sides.

Also, I work with MANY developers, including two that were original to the App Store when it was launched. Many of them are multi-million dollar organizations. None of them are mad at Apple for charging a cut and are happy with the arrangement. The reason why this is a "big deal" is because massive corporations are making the narrative about "unfairness" because they want more profit.

Credit card fees are less than 2.5% in Europe (for consumer payments - on which fees are regulated by the EU). At least for the "big boys" (that would otherwise pay 30%). 15% is still a lot, a multiple of that.

That said, I do believe that Apple would face less criticism from developers and headwinds if their commissions were "something closer to credit card prices".

Understood, that makes the delta for the European companies more than for sure when selling the European buyers.

I do agree about them facing less criticism, but as I said above, the criticism is being overblown by gigantic corporations who are mad at the arrangement. Would any business be happy if Apple cut their commission rate? Yeah, but the smaller business aren't the ones complaining. Look no farther than this program detailing that Apple already called the bluff and gave all of the smaller business even more profit back because they know who is truly complaining. This program directly affected several businesses I work with and they were very happy about the new rules. But they weren't upset beforehand either. They were happy they could make an entire business around the platform that Apple builds, enhances, updates, etc... and they can put minimal effort in and get great returns on their effort.

I suppose their 5% churn rate is for all platforms combined. In which case they may actually benefit from not offering in-app subscription management (cause it makes it harder for consumers to unsubscribe).

But to be fair to Spotify, not only Apple is offering a competing service - they're also offering all of their customers free 6 month trial subscriptions when setting up or updating an Apple hardware device. If I did that, I'd certainly "pause" my Spotify sub - after which Apple, should I subsequently decide to switch again, would charge them a 30% commission anew.

That is true, and customers start and stop for other reasons as well. I was only trying to point out that a bulk of their customers are in the renewal part of their subscription and won't be charged the higher rate. The exact breakout of that percentage we both would only be guessing at, but with a 5% churn everywhere the bulk of their subscriber base is at the lower rate.

 

[Beautyspin]

LOL, yeah I went on vacation so it was like a week ago

I hear what you are saying and I can understand that perspective. That perspective though is ignoring how anyone got to that place to begin with. Its starting in the middle rather than at the beginning.

Let's talk about the calendar app example you gave. From your example, since Apple didn't code the app that makes it better or worse why would they have a right to more of the revenue? The answer is because the developer agrees to a Net Revenue share system in order to even have an app to begin with. It has nothing to do with how successful or not an app is, it has nothing to do with a "right to dip fingers" into something, it has nothing to do with creativity. All of those things are AFTER the developer enters into an agreement with Apple to use their platform. What it has to do with is the terms the developer agreed to before they built the app in the first place. They agreed to a revenue share model. This shares revenue, and in-app purchases are revenue and therefore are part of the agreement that was made before a line of code was written. From this perspective then, features are created to attract customers and create a value that consumers then purchase to create revenue. That revenue is then shared, per the agreement.

Side note: We like to humanize "developers" and dehumanize "corporations" in this argument, but they are one and the same. The "developer" is still a business, and would be identical to Apple if they had the same success. And Apple would be identical to a "developer" if they hadn't had the same success. They are two businesses coming to an arrangement.

So, could/should the model be changed? Sure! As I said, businesses engage with each other in different ways and a new way of engaging between businesses could be created. We are seeing this actually with the EU forcing Apple to change the way developers can put apps into the ecosystem, this exact shift in the way businesses work with each other. In this new way, other people can do App Stores other than Apple. However, Apple still gets to set the cost of doing business with them. They still own their platform and get to set the rules for their property. So Apple setup a pricing model that is not very attractive, but does technically allow for other App Stores to operate.

So is it "fair" that Apple gets to set the rules like this? From one perspective no. Smartphones have become so ubiquitous that it seems not very fair that only a couple companies end up being the "gatekeepers" to the entire industry. It seems like there should be more options and less control by a select few. However, from another perspective it is completely fair. That perspective is capitalism. The very system that we use to allow businesses to build and be "successful" creates these exact paradoxes. If you are REALLY good at capitalism then you essentially create something that others will think is "not fair" because you become a new "standard" at what you do and thereby have control over it because you built it.

Honestly my biggest concern with the control Apple has in this is not how much they are charging but rather when they decide to develop and release software that does the same thing as apps in the App Store. Take Apple Music for example. I think this definitely needs to be addressed by the government and there needs to be consequences for Apple doing this. It is completely anti-competition for Apple to enter a market space that other apps are in. They have countless advantages. This playing field needs leveling. However, for Candy Crush? They are in an arrangement with Apple whereby they get to build an entire business and make millions because Apple has built the systems to allow it and Apple asks them to pay 27.5%-12.5% to do so. From every App Developer I have worked with (including some of the very first in the App Store), everyone is happy with the arraignment. The only REAL people upset are the largest corporations who don't want to give up that much money to Apple. That is understandable. Large companies try to leverage better terms for their contracts all of the time, but in this case the app side parties don't have leverage. This makes them upset and they take to the media and spin tales to try and get traction to change things so they have a better negotiating position. While I can understand the maneuver, it is smoke and mirrors and unless we want to change from capitalism, Apple isn't doing anything wrong.

So Apple charging commissions....just playing the role of a capitalist. Apple sniffling completion due to unfair advantages when it competes with other apps? Worth investigating and changing.

Developers agree to Apple's conditions because they do not have any other options. Those who can develop but are not interested in submitting to Apple's extortion do not develop at all. And that is exactly the entire reason for the DMA or DOJ's antitrust case. Giving the developers a choice. The assumption is that once there is a choice, more developers would flock to the ecosystem and there will be more competition. Competition should drive down the prices for customers because not everyone can compete on features.

 

[Arsenikdote]

Developers agree to Apple's conditions because they do not have any other options. Those who can develop but are not interested in submitting to Apple's extortion do not develop at all. And that is exactly the entire reason for the DMA or DOJ's antitrust case. Giving the developers a choice. The assumption is that once there is a choice, more developers would flock to the ecosystem and there will be more competition. Competition should drive down the prices for customers because not everyone can compete on features.

The problem with that argument is that there is choice. Apple and Google both have platforms. The developer can choose between the two. Just because the terms are the same between them doesn't mean there isn't a choice, it means the current market doesn't allow for the cost of business to be lower than it is.

Now, is there price fixing? Potentially. If that is happening then it should be addressed and it would be if a case ever comes to bear. But aside from price fixing, there is choice there just isn't "cheaper" which is a business decision and is and should be in the control of the businesses who run them. This is the case until we change the rules of how businesses operate, aka capitalism. If we aren't changing those rules then we can't be mad just because the current climate doesn't favor everyone equally...that is the price of capitalism.

Plus driving down prices should not be a goal. When prices go down, businesses loose revenue. Unless you are in the super rare minority of businesses where you can have high demand and high margins, if your prices go down you have to make up for it in some way or they close their doors. We are seeing this today with much lower quality ingredients in food items, "Shrinkflation" where you get 30.4 ounces of orange juice now instead of 32, and items not built to last. Contrary to most people's beliefs the reason things aren't built as good as before is not because companies want you to replace it, it is because they can't afford to make it as good as before. But I won't dive down this rabbit hole too far because then we will get into wealth gaps and everything else

BTW, I am in favor of following the rules. If Apple is stifling competition, potentially Apple Music vs Spotify, or if they are pricing fixing with Google, or anything like that....it needs to stop. Period. But if they are playing by the rules of capitalism, not breaking any other rules, and people are upset because it creates an imbalance of power.....tough luck. They played the game and are winning. We shouldn't be sore losers. We should change the game or beat them, not whine and complain.

 

[Sophisticatednut]

Here is what you have done. I asked what Epic was doing for developers since Apple is providing everything from the hardware to the software. Here are your comments:

followed by

followed by

You are really driving hard that the Unreal Engine is really good. Sure, great, it is. But the businesses making the most money on the iOS store from games are not using it. They don't need to. It doesn't matter if you CAN use it, they aren't. They are making a ton of money without using it. So back to my original point, what is Epic offering them? The answer is nothing other than less revenue from less people.....which brings up the next thing...

Developers don’t only exist on iOS. The Unreal engine is cross platform service. The same game launched on iOS can be recompiled for the Mac, windows, Linux, Xbox, PlayStation, Nintendo etc etc.

Or a game made for the pc can be recompiled for the Mac, iOS, PS5, Nintendo etc etc etc.
You asked what they bring, not why not everyone uses it, it’s simply one of multiple tools and developers will pick whatever they think does the job for them.

Using the unreal engine isn’t conditional upon using their store.

Yes something does prevent them....Apple. Apple states that if you list your app in an alternative App Store that you are not allowed to list it in their App Store and that the move is permanent.

As far as I know you can list the same app binary in the AppStore and outside on alternative store fronts simultaneously.

Again, I have agreed with you that for apps that are focused on "true mobile gaming" and not Words With Friends games, those developers might find a good fit in an alternative App Store like Epic is going to create. However, for the bulk of apps who want access to the largest audience, they are going to stick with Apple.

Or multi homing and providing the same app in multiple spots simultaneously?

Nothing prevents you from exclusively using Xcode, publishing the game in the epic store and provide Apple’s IAP(unless Apple prevents it)

 

[Beautyspin]

The problem with that argument is that there is choice. Apple and Google both have platforms. The developer can choose between the two. Just because the terms are the same between them doesn't mean there isn't a choice, it means the current market doesn't allow for the cost of business to be lower than it is.

Now, is there price fixing? Potentially. If that is happening then it should be addressed and it would be if a case ever comes to bear. But aside from price fixing, there is choice there just isn't "cheaper" which is a business decision and is and should be in the control of the businesses who run them. This is the case until we change the rules of how businesses operate, aka capitalism. If we aren't changing those rules then we can't be mad just because the current climate doesn't favor everyone equally...that is the price of capitalism.

Plus driving down prices should not be a goal. When prices go down, businesses loose revenue. Unless you are in the super rare minority of businesses where you can have high demand and high margins, if your prices go down you have to make up for it in some way or they close their doors. We are seeing this today with much lower quality ingredients in food items, "Shrinkflation" where you get 30.4 ounces of orange juice now instead of 32, and items not built to last. Contrary to most people's beliefs the reason things aren't built as good as before is not because companies want you to replace it, it is because they can't afford to make it as good as before. But I won't dive down this rabbit hole too far because then we will get into wealth gaps and everything else

BTW, I am in favor of following the rules. If Apple is stifling competition, potentially Apple Music vs Spotify, or if they are pricing fixing with Google, or anything like that....it needs to stop. Period. But if they are playing by the rules of capitalism, not breaking any other rules, and people are upset because it creates an imbalance of power.....tough luck. They played the game and are winning. We shouldn't be sore losers. We should change the game or beat them, not whine and complain.

1. For iOS developers, the Appstore is the only choice. If they are not developing for iOS, then why Android, all the hundreds of other platforms are open for them.
2. Cheaper is not the goal. Currently, the price of apps is artificially inflated in the Appstore because there is no other choice for both the developers and the users. With alt stores, when choice is available, then the developer should either compete on features or price. If you cannot add features, then you reduce the price.
3. What we are seeing is that while quality of the ingredients is coming down, price is actually going up because the users have no choice.

 

[Arsenikdote]

Developers don’t only exist on iOS. The Unreal engine is cross platform service. The same game launched on iOS can be recompiled for the Mac, windows, Linux, Xbox, PlayStation, Nintendo etc etc.

Or a game made for the pc can be recompiled for the Mac, iOS, PS5, Nintendo etc etc etc.
You asked what they bring, not why not everyone uses it, it’s simply one of multiple tools and developers will pick whatever they think does the job for them.

Using the unreal engine isn’t conditional upon using their store.

As far as I know you can list the same app binary in the AppStore and outside on alternative store fronts simultaneously.

Or multi homing and providing the same app in multiple spots simultaneously?

Nothing prevents you from exclusively using Xcode, publishing the game in the epic store and provide Apple’s IAP(unless Apple prevents it)

You keep beating to death your point. Developers CAN use Unreal Engine. That gives them benefits. That doesn't mean all of them do, and some of the most lucrative games in the current iOS App Store do not. So they are not going to rebuild their game for this, not to mention still loose the vast consumer base that made them the top grossing apps in the store.

You are incorrect, Apple makes a developer choose to use their App Store or move to an alternative and they can never reverse that decision.

 

[Arsenikdote]

1. For iOS developers, the Appstore is the only choice. If they are not developing for iOS, then why Android, all the hundreds of other platforms are open for them.
2. Cheaper is not the goal. Currently, the price of apps is artificially inflated in the Appstore because there is no other choice for both the developers and the users. With alt stores, when choice is available, then the developer should either compete on features or price. If you cannot add features, then you reduce the price.
3. What we are seeing is that while quality of the ingredients is coming down, price is actually going up because the users have no choice.

1. But that is like saying for Vegan's it is not a choice to eat cheese. Sure it is, become a vegetarian. Just because you don't like the choice or the choice is not easy doesn't make it no less of a choice. If you have decided to only code for iOS, then that is your business decision and as a business owner you have to be responsible for your business decisions. I don't work with a single app developer who doesn't also have an app in the Google ecosystem, it is just leaving money on the table and silly. Several of them also have Mac and Windows apps or at least web apps as well. Putting all your eggs in one basket is not a wise business decision.
2. That is a false argument. Since everyone has the same restriction they are already in the exact place they would be in Apple's cut was lower. Either compete on value or price. If Apple reduced it, everyone would get there reduction so it doesn't change the landscape at all. So again, the goal should not be to reduce the price, the race to the bottom benefits no one other than people who are short-sighted and don't run businesses well.
3. Inflation will raise prices, it has been this way before computers were being sold, it has been this way since before my great great grandfather was born. What we are seeing for the first time ("first time" as in the last two decades compared to the 100 years prior to that) is shrinkflation at an unprecedented scale as well as a decline in quality, even of supposed higher end products, at a rate that has no match. All indications show that something will have to give in the next 10 years or so because this trajectory is untenable.

 

[Beautyspin]

1. But that is like saying for Vegan's it is not a choice to eat cheese. Sure it is, become a vegetarian. Just because you don't like the choice or the choice is not easy doesn't make it no less of a choice. If you have decided to only code for iOS, then that is your business decision and as a business owner you have to be responsible for your business decisions. I don't work with a single app developer who doesn't also have an app in the Google ecosystem, it is just leaving money on the table and silly. Several of them also have Mac and Windows apps or at least web apps as well. Putting all your eggs in one basket is not a wise business decision.
2. That is a false argument. Since everyone has the same restriction they are already in the exact place they would be in Apple's cut was lower. Either compete on value or price. If Apple reduced it, everyone would get there reduction so it doesn't change the landscape at all. So again, the goal should not be to reduce the price, the race to the bottom benefits no one other than people who are short-sighted and don't run businesses well.
3. Inflation will raise prices, it has been this way before computers were being sold, it has been this way since before my great great grandfather was born. What we are seeing for the first time ("first time" as in the last two decades compared to the 100 years prior to that) is shrinkflation at an unprecedented scale as well as a decline in quality, even of supposed higher end products, at a rate that has no match. All indications show that something will have to give in the next 10 years or so because this trajectory is untenable.

1. That's the reality. There are several developers who only develop for iOS. Yes, it is a business decision. Even if the developer develops for other platforms, it does not matter. For iOS developers, there is no other option and that is the point. With alt stores, they will have more choices.

2. When there is a choice, the developers will do anything, including reducing the price, to get the sales. When there is no choice, they do not have to as the users have to buy it from that store or not at all.

3. Lack of competition increases the prices and decreases the quality as there is are other alternatives.

 

[Sophisticatednut]

You keep beating to death your point. Developers CAN use Unreal Engine. That gives them benefits. That doesn't mean all of them do, and some of the most lucrative games in the current iOS App Store do not. So they are not going to rebuild their game for this, not to mention still loose the vast consumer base that made them the top grossing apps in the store.

I am beating it to death because you keep saying this point that doesn’t make any sense.

You are incorrect, Apple makes a developer choose to use their App Store or move to an alternative and they can never reverse that decision.

Well Apple seems to say otherwise. As well as the option to change their mind once.
Developers on these terms will be able to:

• Distribute their iOS apps on the App Store and/or alternative app marketplaces; and
• Process payments using the secure App Store In-App Purchase system, an alternative payment service provider, and/or after linking-out to your webpage from your app.

 

[Arsenikdote]

1. That's the reality. There are several developers who only develop for iOS. Yes, it is a business decision. Even if the developer develops for other platforms, it does not matter. For iOS developers, there is no other option and that is the point. With alt stores, they will have more choices.

2. When there is a choice, the developers will do anything, including reducing the price, to get the sales. When there is no choice, they do not have to as the users have to buy it from that store or not at all.

3. Lack of competition increases the prices and decreases the quality as there is are other alternatives.

1. Yes, but you don't make rules and laws based on the minority or based on bad business decisions. This is not a question of "would it allow for more choice" it is a question of "is there a choice". The choice is, expand your business instead of trying to get others to bail you out.
2. That is simply not how business works. Competition exists or it does not. If it exists it exists today and they still have to proceed with altering business practices to stay relevant. Having multiple app stores would only create a scenario where it is harder to control the outcome since it would take more work to track their "industry"
3. Yes, but you are conflating two things. Single or multiple App Stores doesn't stifle Apps from becoming better. Apps either do or don't have competition and the number of apps has nothing to do with the number of app stores. The app space has been growing despite there only being two, Apple & Google. Apps having competition will make apps better. We have seen this already with apps like reminder or calendar apps. I agree and would support this. I also support the idea of making sure Apple doesn't stifle this, like in the Spotify and Apple Music example. But Apple being the only store to distribute apps doesn't make a lack of competition with anything other than app stores themselves.

 

[Arsenikdote]

I am beating it to death because you keep saying this point that doesn’t make any sense.


Well Apple seems to say otherwise. As well as the option to change their mind once.
Developers on these terms will be able to:

• Distribute their iOS apps on the App Store and/or alternative app marketplaces; and
• Process payments using the secure App Store In-App Purchase system, an alternative payment service provider, and/or after linking-out to your webpage from your app.

Ahhhh, yes it appears you are correct! It looks like they have updated their terms of service. Not only an you list your app on both stores but you are actually allowed to change your mind on how your app is charged one time, per the new addendum:

You may terminate this Addendum without also terminating the Developer Agreement one time, provided You have never had an Application be an Alternative App Marketplace (EU), be distributed through an Alternative App Marketplace (EU), use Linking Out, or use Alternative Payment Processing

With this change then there is a lot less downside for developers to try out this new method to see how it affects their revenue. The Core technology fee could still be financially detrimental, but it would at least be reasonable to make an attempt at it if the initial numbers looked good.

Thanks for finding that! I wonder how long ago that changed and what pressure made them adjust that.

 

[Sophisticatednut]

Ahhhh, yes it appears you are correct! It looks like they have updated their terms of service. Not only an you list your app on both stores but you are actually allowed to change your mind on how your app is charged one time, per the new addendum:

With this change then there is a lot less downside for developers to try out this new method to see how it affects their revenue. The Core technology fee could still be financially detrimental, but it would at least be reasonable to make an attempt at it if the initial numbers looked good.

Thanks for finding that! I wonder how long ago that changed and what pressure made them adjust that.

I absolutely agree the CTF is very likely detrimental, and I question the fact very large developers are allowed to publish their apps on their websites.

Seems very tactical to get the biggest developers to be happy and be silent, so the smaller developers loses all the financial leverage to push for change.

And I think they changed the rules a few days after the DMA deadline after developer feedback.

Vestager said the new fees have attracted her attention.
"There are things that we take a keen interest in, for instance, if the new Apple fee structure will de facto not make it in any way attractive to use the benefits of the DMA. That kind of thing is what we will be investigating," she told Reuters in an interview.

 

[Arsenikdote]

I absolutely agree the CTF is very likely detrimental, and I question the fact very large developers are allowed to publish their apps on their websites.

Seems very tactical to get the biggest developers to be happy and be silent, so the smaller developers loses all the financial leverage to push for change.

I work with several development shops that have apps in the App Store/Google Play store. The smallest of them makes about $500K a year and the largest makes tens of millions. All of them would take less than a 15% cut if offered (only one of them I work with is a one time purchase, the rest are subscription based models) but none of them are screaming about "no choice" because Apple's platform and work in this areas allowed them to have a business to begin with. They also provide them with a lot of services. Sure it would be great to get them for less, but most of them see it like we would all like to pay for less for everything in life. They don't see the imbalance and have been happy with the arrangement for the past decade+ they have been in business.

It seems, as you said, that the large developers in which 15% represents 20M in revenue cares more about reducing the fee than a smaller developer. Do you think this is more about "keeping in check" the large corporations? Or maybe just huge companies like Epic trying to use whatever means possible to get more profit from their sales? I certainly don't think it is focused on the majority of developers. The number from 2022 said that approximately 90% of developers earned less than $1 million annually from the App Store and had fewer than 1 million downloads across all their apps within that year. 90% of developers fall into this category. This is why I think the EU and Epic and Apple are all full of it. It is an argument of titans using the small business owner as a justification only.

 

[Beautyspin]

1. Yes, but you don't make rules and laws based on the minority or based on bad business decisions. This is not a question of "would it allow for more choice" it is a question of "is there a choice". The choice is, expand your business instead of trying to get others to bail you out.
2. That is simply not how business works. Competition exists or it does not. If it exists it exists today and they still have to proceed with altering business practices to stay relevant. Having multiple app stores would only create a scenario where it is harder to control the outcome since it would take more work to track their "industry"
3. Yes, but you are conflating two things. Single or multiple App Stores doesn't stifle Apps from becoming better. Apps either do or don't have competition and the number of apps has nothing to do with the number of app stores. The app space has been growing despite there only being two, Apple & Google. Apps having competition will make apps better. We have seen this already with apps like reminder or calendar apps. I agree and would support this. I also support the idea of making sure Apple doesn't stifle this, like in the Spotify and Apple Music example. But Apple being the only store to distribute apps doesn't make a lack of competition with anything other than app stores themselves.

3. It is already happening. Check out the new Clip app on the alternate app store.

Introducing Clip

One year ago, I was preparing for the upcoming launch of AltStore — my attempt at building an alternative App Store for non-jailbroken devices (maybe you’ve heard of it). I originally built AltStore as a way to distribute Delta, but soon pivoted towards a more general distribution platform for...

rileytestut.com

 

[Arsenikdote]

3. It is already happening. Check out the new Clip app on the alternate app store.

Introducing Clip

One year ago, I was preparing for the upcoming launch of AltStore — my attempt at building an alternative App Store for non-jailbroken devices (maybe you’ve heard of it). I originally built AltStore as a way to distribute Delta, but soon pivoted towards a more general distribution platform for...

rileytestut.com

Well that is actually an entirely different topic you haven't brought up. Whether or not Apple should be able to be gatekeepers for how apps FUNCTION within their ecosystem. The app is trying to bypass an iOS rule which is that background apps need to be paused. Using a workaround of playing a silent audio file was rejected by Apple.

So is this right or wrong? I don't think there is a clear answer. For techy people, they are likely going to understand that when apps are always running in the background it will reduce battery life. They can also get into the details around privacy concerns with this. But for the average person, they won't know. So is it better that we allow most people to get themselves into trouble or is it better to have someone stopping apps from potentially causing this, even when the affect is minor (to prevent the slippery slope issue)? I can see both sides and can argue them equally. I feel like it is murky at best.

But in a way it will be interesting to see how this plays out as these other app stores open up and what happens when these "what if" scenarios are in the wild.

 

[Beautyspin]

Well that is actually an entirely different topic you haven't brought up. Whether or not Apple should be able to be gatekeepers for how apps FUNCTION within their ecosystem. The app is trying to bypass an iOS rule which is that background apps need to be paused. Using a workaround of playing a silent audio file was rejected by Apple.

So is this right or wrong? I don't think there is a clear answer. For techy people, they are likely going to understand that when apps are always running in the background it will reduce battery life. They can also get into the details around privacy concerns with this. But for the average person, they won't know. So is it better that we allow most people to get themselves into trouble or is it better to have someone stopping apps from potentially causing this, even when the affect is minor (to prevent the slippery slope issue)? I can see both sides and can argue them equally. I feel like it is murky at best.

But in a way it will be interesting to see how this plays out as these other app stores open up and what happens when these "what if" scenarios are in the wild.

Not at all. Your question was apps will not innovate if there is a 3rd party store. It is already happening. Also, Apple is now allowing Game Emulators in the EU in the Appstore (looks like the emulators are allowed worldwide now). Why is it not allowing them elsewhere? Whatever the underlying reason was there, is already nullified by this action in the EU. Why are they not allowing them in the rest of the world? Just out of spite?

Apple has to be forced to do the right thing.
Edit: Correction.

 

[Sophisticatednut]

Well that is actually an entirely different topic you haven't brought up. Whether or not Apple should be able to be gatekeepers for how apps FUNCTION within their ecosystem. The app is trying to bypass an iOS rule which is that background apps need to be paused. Using a workaround of playing a silent audio file was rejected by Apple.

So is this right or wrong? I don't think there is a clear answer. For techy people, they are likely going to understand that when apps are always running in the background it will reduce battery life. They can also get into the details around privacy concerns with this. But for the average person, they won't know. So is it better that we allow most people to get themselves into trouble or is it better to have someone stopping apps from potentially causing this, even when the affect is minor (to prevent the slippery slope issue)? I can see both sides and can argue them equally. I feel like it is murky at best.

But in a way it will be interesting to see how this plays out as these other app stores open up and what happens when these "what if" scenarios are in the wild.

I would say it clearly right if we go by the rules, but it’s completely wrong from a technical standpoint as well as it taking more battery in any meaningful way. Deactivating Siri would have a more meaningful impact

The app does have a legitimate purpose to run in the background as the function of copying different things and putting it in the clipboard.

But the rules essentially makes a useful clipboard basically useless as you still need to switch back and forth to copy and paste multiple things.

The app clip is in my mind a very good example of how Apple limits innovation and useful apps for users

 

[Arsenikdote]

Not at all. Your question was apps will not innovate if there is a 3rd party store. It is already happening. Also, Apple is now allowing Game Emulators in the EU in the Appstore (looks like the emulators are allowed worldwide now). Why is it not allowing them elsewhere? Whatever the underlying reason was there, is already nullified by this action in the EU. Why are they not allowing them in the rest of the world? Just out of spite?

Apple has to be forced to do the right thing.
Edit: Correction.

You are still on the topic of a gatekeeper. Apple preventing certain types of apps. I am not in favor of this either. However, that was not the original point. The original point was that Apple charging a fee to utilize iOS stifles innovation and that is not true. All apps face the same issue, therefore no one app has an advantage or disadvantage. So it is not stopping apps from competing and getting better. Where it CAN happen is when Apple enters a space (aka Apple Music vs Spotify) and I have already said that I think there needs to be oversight on these ventures by Apple to make sure there is competition.

I don't agree about Apple being forced to do something either. They are not going to do it unless a governing body forces them to. However, I would argue that it is not "right" or "wrong" because Apple is operating under the rules of capitalism and therefore IS doing the "right" thing by operating their business in such a way as to maximize profits. The "right" thing is not to make their business more vulnerable to dilution or have to fight battles they can avoid. Same thing with these new rules. Apple will have to spend money to make these things secure or risk negative PR at the minimum. That cost Apple SHOULD try to avoid. Not only is it a cost savings but also makes them more money by forcing more people to play in their sandbox.

I am not blind to what is going on, but it is BUSINESS and it should be the way they operate. It doesn't mean it is the best thing for consumers, but why should it be? When did you feel like a gas/petrol station was in your best interest? When did you feel like Coca-cola was doing things in your best interest? That is not the point of business...whether you feel that is right or wrong is also a different topic

 

[Arsenikdote]

I would say it clearly right if we go by the rules, but it’s completely wrong from a technical standpoint as well as it taking more battery in any meaningful way. Deactivating Siri would have a more meaningful impact

The app does have a legitimate purpose to run in the background as the function of copying different things and putting it in the clipboard.

But the rules essentially makes a useful clipboard basically useless as you still need to switch back and forth to copy and paste multiple things.

The app clip is in my mind a very good example of how Apple limits innovation and useful apps for users

I know it feels like a double edge sword, which I am sure isn't lost on Apple. If you can TRUST the developer than clipboard apps like that are stifled because the app would otherwise see the light of day, along with likely MANY more apps like it we don't get access to today. However, on the other hand not only do these rules protect all users from shoddy coded apps that would make the experience much worse, it also protects against the bad actors doing more than they say they are doing. I am just glad I don't have to make the decisions! 😆