7 ms·

Apple wins this in a walk-over. And as an iOS developer, I get a lot of benefits from the App Store that makes their 30% more than reasonable.

paxys 6y ago
Cool. I am also an iOS developer and get almost nothing for the 30% I pay Apple. It would be trivial to build my own in-app payments system using Stripe for like 3%. Giving customers choice and encouraging competition is a good thing.
- valuearb 6y ago
  An in-app purchase system isn’t an App Store, and isn’t remotely similar. You get worldwide access to hundreds of markets in dozens of localized stores all in a system that makes billions of customers feel secure in purchasing from you. You also get Appleto distribute your apps for free as well! Spotify alone uses terabytes a day distributing to free users. Opening up to other app stores would be a disaster for developers. Less secure, more scam are and malware, more confusing, lower consumer confidence, Balkanized app search, higher dev costs to support more stores, and for what? 20% fees at best? Apples margins are publicly documented, no one could run a profitable app store for less than 20%.
  - yulaow 6y ago
    > Apples margins are publicly documented, no one could run a profitable app store for less than 20%. How can you say that if apple didn't allow the competition to exist? We cannot see if someone can innovate enough to cut that margin maybe even far more than what apple made you think is the "minimum to be profitable" because apple does not allow that Isn't this exactly the startup playing field? When there is a market standard of which some pseudo monopolist says "well no one can do better than this" and then a innovative competitor joins in and distrupts?
    - valuearb 6y ago
      What are you going to cut? Security? App Review? Are you going to refuse to distribute free apps? How come Google Play doesn’t cut their fees?
      - yulaow 6y ago
        Start giving the chance to competitors to enter the market, then if they cannot undercut apple you are right. Until they can't even try, we don't know. Maybe they will even just "compete orthogonally" instead of just trying to work around the parameters you talk about. I don't know... maybe a store without IAPs will be born where games cost more but you get the full game and you know the author is not gonna try to gamify-casino you. Maybe someone will make a store which allows me to buy an app both for android and iOS in a single purchase at a lower price than buying both separately. Maybe whatever, I don't know, but I for sure want to know what I could get.
        valuearb 6y ago
        I’m a developer and I don’t want alternate apps stores making the developer and customer experience more complicated, less secure and more confusing, all in hopes someone might charge me significantly lower fees. Google Play is proof that lower fees isn’t going to benefit devs. No third party store has been able to use lower fees to take any significant market share.
  - ac29 6y ago
    Do they break out specific App Store revenues and costs somewhere? I see Net sales for "services" (which presumably includes App Store) at $13.1B last quarter and the cost of sales for "services" at $4.3B. If that was entirely off the 30% App store cut, they clearly would not need anywhere near the 30% to cover their costs (net sales are >3x cost of sales). But, lumped together with other services its hard to say anything specific about App store. https://www.apple.com/newsroom/pdfs/FY20-Q3_Consolidated_Financial_Statements.pdf https://www.apple.com/newsroom/pdfs/FY20-Q3_Consolidated_Fin...
- Scottopherson 6y ago
  Will your trivial custom payment system come with counter-intuitive modal popups? Unclear subscription/unsubscription terms? Inaccessible or hostile refund or return policies? I don't want to prematurely insinuate that you or other's solutions would all have such characteristics but as a consumer I don't care how developers get paid and I enjoy the benefits of Apple's integrated UX around iOS payments and subscriptions. But I am also a developer and enjoy benefits of open-ness and choice in my work as well so I struggle with my opinions on this issue.
  - paxys 6y ago
    Funny because I recently tried to cancel an in-app subscription I signed up for through Apple and it was borderline impossible. I'd much rather prefer to have a cancellation option in the app itself, but Apple doesn't allow that. In fact Apple's in-app payment/subscription UX checks every single box in your list.
    - zimpenfish 6y ago
      I cancelled something the other day - got an email saying it was up for renewal in 90 days or thereabouts with a link to the subscription page and a set of options where "cancel" was afforded the same screen real estate as the continue options. Not entirely onerous, I think, two clicks? But ok, you might want to cancel before you get the reminder email. Settings -> Your Name/Avatar -> Subscriptions -> Pick the app -> Big red "Cancel Subscription" button. But ok, ok, you might not know that they're under your avatar which is fair, it's not entirely intuitive. Settings -> Search -> "sub" -> Subscriptions is the first result -> Pick the app -> Big red "Cancel Subscription" button. But ok, ok, ok, you don't have your iOS device to hand. macOS Settings -> Apple ID -> Subscriptions: Manage... -> Edit the subscription (this is broken on the Big Sur beta, mind.) If you don't have your iOS device(s) to hand, nor do you have a Mac handy, then I concede it's going to be a bit faff - https://support.apple.com/en-gb/HT211011 https://support.apple.com/en-gb/HT211011
  - saagarjha 6y ago
    > Will your trivial custom payment system come with counter-intuitive modal popups? Unclear subscription/unsubscription terms? Inaccessible or hostile refund or return policies? You mean like Apple's solution?
- HatchedLake721 6y ago
  Are you then trivially going to monitor you're not breaching any tax reporting thresholds in 155 countries, register for VAT MOSS in one of the EU countries, implement IP geo-location for your European customers to make sure you charge them a correct VAT out of 27 options, and then personally do quarterly VAT MOSS submissions? You don't know what you're getting from Apple for 30%. Which is fine. This is Apple's gross mistake that you and others are not aware of the benefits they get.
  - paxys 6y ago
    Why assume what I know and don't know? Stripe and several other providers offer all of this for a much smaller fee. Plus, I already have all of the infrastructure running on the web, so the incremental cost to support iOS will be close to 0. In fact, even if you put aside the processing fee, not having to support Apple's terrible payments and subscription system will be a net engineering benefit.
    - valuearb 6y ago
      why is Apple spending nearly 50% of those App Revenues on the App Store? You can’t do a good job at App Review alone for Stripes fee, and App Review is critically important for developers and customers. You are completely clueless if you think payment processing is even a tiny fraction of what the App Store provides.
    - HatchedLake721 6y ago
      P.S. - You've edited your comment. My comment still stands I cannot assume that a single person is not proficient in tax regulations in 155 countries around the world? > Again, Stripe and others offer all of this for a much smaller fee. I don't know who "others" are, but Stripe definitely doesn't offer that. https://support.stripe.com/questions/charging-sales-tax-gst-or-vat-on-payments https://support.stripe.com/questions/charging-sales-tax-gst-... If you're using Stripe, you need to make sure you charge the correct tax, and it's your own responsibility to report it correctly in the countries that require it. There are services on top of Stripe that can do that for additional fee (e.g. quaderno.io), but then again, it is worrying that you're not aware of your tax obligations taking worldwide payments via Stripe and also that you're not aware of what Apple provides you for 30%. Not knowing either is fine, but I'd say both are Stripe's and Apple's faults that you are not aware of this.
mhh__ 6y ago
Is 30% reasonable? I don't think anyone is arguing it should be zero, but 30% is quite a lot.
- jdminhbg 6y ago
  By building their own payment system, Epic is definitely arguing it should be zero.
  - mhh__ 6y ago
    Parent comment mentioned App Store rather than in app purchases. Epic themselves charge 12% IIRC for their store.
    - jdminhbg 6y ago
      The App Store runs both app purchases and in-app purchases. Epic wants to be able to bypass the App Store for IAPs, paying 0%.
  - gridlockd 6y ago
    For what Epic is doing, it should be zero. Let's say you buy Fortnite at Walmart. Walmart gets its share from the sale. Walmart doesn't get a share for every in-app-purchase made thereafter. You might say, if Fortnite were given away, Walmart wouldn't stock it, because it would just take shelf space. Perhaps that's true, but who says that Apple needs to give (virtual) shelf space to free apps? They could hide away apps that don't bring them money. In fact, that's effectively what they're doing anyway: Unless you have tons of downloads or you get featured, you are invisible on the App Store.
    - Spivak 6y ago
      The difference is that Apple’s “store” is the whole device, not just the UI for downloading apps. Apple owns the building that allows apps to set up shop and sell their services. As part of that deal they get a cut of every sale.
    - 6y ago
dbetteridge 6y ago
Apple should either charge based on usage of their resources i.e % charge for payments through apple pay $ per million downloads/updates for hosting or provide the ability to sideload or use third party app stores That way app developers can choose whether Apples store is worth their overhead.
- valuearb 6y ago
  That would be a disaster for developers. Right now the App Store will distribute as many terabytes of your apps as you want, for free, and only charges a fee when customers actually buy. It’s the greatest software marketing machine ever and access is only $99 a year.
  - gridlockd 6y ago
    The vast majority of Apps receive effectively no marketing from the App Store, they are invisible except for a brief moment when they're listed under "latest".
    - valuearb 6y ago
      You aren’t using the store correctly if you believe that. Marketing isn’t just “ads”. Look it up.
      - gridlockd 6y ago
        There's millions of apps on the App Store and of those, only a few hundred are visible at one point in time. Are you telling me that millions of apps are just not using the store "correctly", that Apple would feature them if only they had "looked it up?"
        valuearb 6y ago
        Are you joking? I’ve been selling in the App Store for nearly a decade, haven’t had an app ranked in any chart for at least 5 years, do zero advertising, yet the checks keep rolling in. Explain how.
dylan-m 6y ago
You also don't see other app stores preventing apps from including their own payment systems. Because how people pay for additional content inside an app is completely not the distributor's problem. Sure, many other app stores provide extra value in their systems for in-app purchases and a developer might see fit to use that system since it reduces friction, but usually it is voluntary. Obviously, not every app even does in-app purchases. This argument that Apple's rules around in-app purchases are necessary to pay for the ongoing maintenance of their platform is completely bizarre to me. That money is completely separate. What if Fortnite didn't have in-app purchases? It would cost Apple exactly the same amount of money to distribute it and to provide development tools (which, by the way, every developer pays $100 a year for up front anyway). Yet Apple wouldn't be making those juicy margins from in-app purchases. Would Apple be in the right to demand Epic add in-app purchases? Would you be making the same argument? Anyway, if that's the argument Apple is going to use, they're fucked.
- valuearb 6y ago
  So your argument is that vetting dozens of Fortnite releases a year, hosting and distributing them (terabytes a day) across hundreds of international stores in dozens of languages, providing secure installation and other APIs, etc, etc, etc, should be a free device Apple provides Fortnite? Interesting.
  - dylan-m 6y ago
    I think they should charge for that service in an honest and fair way, and if they don't do that I think there's a clear argument they are being anticompetitive.
    - valuearb 6y ago
      They charge in a very clear and honest way. So no issue there.

paxys 6y ago

Cool. I am also an iOS developer and get almost nothing for the 30% I pay Apple. It would be trivial to build my own in-app payments system using Stripe for like 3%. Giving customers choice and encouraging competition is a good thing.

valuearb 6y ago
An in-app purchase system isn’t an App Store, and isn’t remotely similar. You get worldwide access to hundreds of markets in dozens of localized stores all in a system that makes billions of customers feel secure in purchasing from you. You also get Appleto distribute your apps for free as well! Spotify alone uses terabytes a day distributing to free users. Opening up to other app stores would be a disaster for developers. Less secure, more scam are and malware, more confusing, lower consumer confidence, Balkanized app search, higher dev costs to support more stores, and for what? 20% fees at best? Apples margins are publicly documented, no one could run a profitable app store for less than 20%.
- yulaow 6y ago
  > Apples margins are publicly documented, no one could run a profitable app store for less than 20%. How can you say that if apple didn't allow the competition to exist? We cannot see if someone can innovate enough to cut that margin maybe even far more than what apple made you think is the "minimum to be profitable" because apple does not allow that Isn't this exactly the startup playing field? When there is a market standard of which some pseudo monopolist says "well no one can do better than this" and then a innovative competitor joins in and distrupts?
  - valuearb 6y ago
    What are you going to cut? Security? App Review? Are you going to refuse to distribute free apps? How come Google Play doesn’t cut their fees?
    - yulaow 6y ago
      Start giving the chance to competitors to enter the market, then if they cannot undercut apple you are right. Until they can't even try, we don't know. Maybe they will even just "compete orthogonally" instead of just trying to work around the parameters you talk about. I don't know... maybe a store without IAPs will be born where games cost more but you get the full game and you know the author is not gonna try to gamify-casino you. Maybe someone will make a store which allows me to buy an app both for android and iOS in a single purchase at a lower price than buying both separately. Maybe whatever, I don't know, but I for sure want to know what I could get.
      - valuearb 6y ago
        I’m a developer and I don’t want alternate apps stores making the developer and customer experience more complicated, less secure and more confusing, all in hopes someone might charge me significantly lower fees. Google Play is proof that lower fees isn’t going to benefit devs. No third party store has been able to use lower fees to take any significant market share.
- ac29 6y ago
  Do they break out specific App Store revenues and costs somewhere? I see Net sales for "services" (which presumably includes App Store) at $13.1B last quarter and the cost of sales for "services" at $4.3B. If that was entirely off the 30% App store cut, they clearly would not need anywhere near the 30% to cover their costs (net sales are >3x cost of sales). But, lumped together with other services its hard to say anything specific about App store. https://www.apple.com/newsroom/pdfs/FY20-Q3_Consolidated_Financial_Statements.pdf https://www.apple.com/newsroom/pdfs/FY20-Q3_Consolidated_Fin...
Scottopherson 6y ago
Will your trivial custom payment system come with counter-intuitive modal popups? Unclear subscription/unsubscription terms? Inaccessible or hostile refund or return policies? I don't want to prematurely insinuate that you or other's solutions would all have such characteristics but as a consumer I don't care how developers get paid and I enjoy the benefits of Apple's integrated UX around iOS payments and subscriptions. But I am also a developer and enjoy benefits of open-ness and choice in my work as well so I struggle with my opinions on this issue.
- paxys 6y ago
  Funny because I recently tried to cancel an in-app subscription I signed up for through Apple and it was borderline impossible. I'd much rather prefer to have a cancellation option in the app itself, but Apple doesn't allow that. In fact Apple's in-app payment/subscription UX checks every single box in your list.
  - zimpenfish 6y ago
    I cancelled something the other day - got an email saying it was up for renewal in 90 days or thereabouts with a link to the subscription page and a set of options where "cancel" was afforded the same screen real estate as the continue options. Not entirely onerous, I think, two clicks? But ok, you might want to cancel before you get the reminder email. Settings -> Your Name/Avatar -> Subscriptions -> Pick the app -> Big red "Cancel Subscription" button. But ok, ok, you might not know that they're under your avatar which is fair, it's not entirely intuitive. Settings -> Search -> "sub" -> Subscriptions is the first result -> Pick the app -> Big red "Cancel Subscription" button. But ok, ok, ok, you don't have your iOS device to hand. macOS Settings -> Apple ID -> Subscriptions: Manage... -> Edit the subscription (this is broken on the Big Sur beta, mind.) If you don't have your iOS device(s) to hand, nor do you have a Mac handy, then I concede it's going to be a bit faff - https://support.apple.com/en-gb/HT211011 https://support.apple.com/en-gb/HT211011
- saagarjha 6y ago
  > Will your trivial custom payment system come with counter-intuitive modal popups? Unclear subscription/unsubscription terms? Inaccessible or hostile refund or return policies? You mean like Apple's solution?
HatchedLake721 6y ago
Are you then trivially going to monitor you're not breaching any tax reporting thresholds in 155 countries, register for VAT MOSS in one of the EU countries, implement IP geo-location for your European customers to make sure you charge them a correct VAT out of 27 options, and then personally do quarterly VAT MOSS submissions? You don't know what you're getting from Apple for 30%. Which is fine. This is Apple's gross mistake that you and others are not aware of the benefits they get.
- paxys 6y ago
  Why assume what I know and don't know? Stripe and several other providers offer all of this for a much smaller fee. Plus, I already have all of the infrastructure running on the web, so the incremental cost to support iOS will be close to 0. In fact, even if you put aside the processing fee, not having to support Apple's terrible payments and subscription system will be a net engineering benefit.
  - valuearb 6y ago
    why is Apple spending nearly 50% of those App Revenues on the App Store? You can’t do a good job at App Review alone for Stripes fee, and App Review is critically important for developers and customers. You are completely clueless if you think payment processing is even a tiny fraction of what the App Store provides.
  - HatchedLake721 6y ago
    P.S. - You've edited your comment. My comment still stands I cannot assume that a single person is not proficient in tax regulations in 155 countries around the world? > Again, Stripe and others offer all of this for a much smaller fee. I don't know who "others" are, but Stripe definitely doesn't offer that. https://support.stripe.com/questions/charging-sales-tax-gst-or-vat-on-payments https://support.stripe.com/questions/charging-sales-tax-gst-... If you're using Stripe, you need to make sure you charge the correct tax, and it's your own responsibility to report it correctly in the countries that require it. There are services on top of Stripe that can do that for additional fee (e.g. quaderno.io), but then again, it is worrying that you're not aware of your tax obligations taking worldwide payments via Stripe and also that you're not aware of what Apple provides you for 30%. Not knowing either is fine, but I'd say both are Stripe's and Apple's faults that you are not aware of this.

mhh__ 6y ago

Is 30% reasonable? I don't think anyone is arguing it should be zero, but 30% is quite a lot.

jdminhbg 6y ago
By building their own payment system, Epic is definitely arguing it should be zero.
- mhh__ 6y ago
  Parent comment mentioned App Store rather than in app purchases. Epic themselves charge 12% IIRC for their store.
  - jdminhbg 6y ago
    The App Store runs both app purchases and in-app purchases. Epic wants to be able to bypass the App Store for IAPs, paying 0%.
- gridlockd 6y ago
  For what Epic is doing, it should be zero. Let's say you buy Fortnite at Walmart. Walmart gets its share from the sale. Walmart doesn't get a share for every in-app-purchase made thereafter. You might say, if Fortnite were given away, Walmart wouldn't stock it, because it would just take shelf space. Perhaps that's true, but who says that Apple needs to give (virtual) shelf space to free apps? They could hide away apps that don't bring them money. In fact, that's effectively what they're doing anyway: Unless you have tons of downloads or you get featured, you are invisible on the App Store.
  - Spivak 6y ago
    The difference is that Apple’s “store” is the whole device, not just the UI for downloading apps. Apple owns the building that allows apps to set up shop and sell their services. As part of that deal they get a cut of every sale.
  - 6y ago

dbetteridge 6y ago

Apple should either charge based on usage of their resources i.e % charge for payments through apple pay $ per million downloads/updates for hosting or provide the ability to sideload or use third party app stores That way app developers can choose whether Apples store is worth their overhead.

valuearb 6y ago
That would be a disaster for developers. Right now the App Store will distribute as many terabytes of your apps as you want, for free, and only charges a fee when customers actually buy. It’s the greatest software marketing machine ever and access is only $99 a year.
- gridlockd 6y ago
  The vast majority of Apps receive effectively no marketing from the App Store, they are invisible except for a brief moment when they're listed under "latest".
  - valuearb 6y ago
    You aren’t using the store correctly if you believe that. Marketing isn’t just “ads”. Look it up.
    - gridlockd 6y ago
      There's millions of apps on the App Store and of those, only a few hundred are visible at one point in time. Are you telling me that millions of apps are just not using the store "correctly", that Apple would feature them if only they had "looked it up?"
      - valuearb 6y ago
        Are you joking? I’ve been selling in the App Store for nearly a decade, haven’t had an app ranked in any chart for at least 5 years, do zero advertising, yet the checks keep rolling in. Explain how.

dylan-m 6y ago

You also don't see other app stores preventing apps from including their own payment systems. Because how people pay for additional content inside an app is completely not the distributor's problem. Sure, many other app stores provide extra value in their systems for in-app purchases and a developer might see fit to use that system since it reduces friction, but usually it is voluntary. Obviously, not every app even does in-app purchases. This argument that Apple's rules around in-app purchases are necessary to pay for the ongoing maintenance of their platform is completely bizarre to me. That money is completely separate. What if Fortnite didn't have in-app purchases? It would cost Apple exactly the same amount of money to distribute it and to provide development tools (which, by the way, every developer pays $100 a year for up front anyway). Yet Apple wouldn't be making those juicy margins from in-app purchases. Would Apple be in the right to demand Epic add in-app purchases? Would you be making the same argument? Anyway, if that's the argument Apple is going to use, they're fucked.

valuearb 6y ago
So your argument is that vetting dozens of Fortnite releases a year, hosting and distributing them (terabytes a day) across hundreds of international stores in dozens of languages, providing secure installation and other APIs, etc, etc, etc, should be a free device Apple provides Fortnite? Interesting.
- dylan-m 6y ago
  I think they should charge for that service in an honest and fair way, and if they don't do that I think there's a clear argument they are being anticompetitive.
  - valuearb 6y ago
    They charge in a very clear and honest way. So no issue there.