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Apple has huge economies of scale and its public services margins imply costs are roughly 10%. That’s why you won’t see app stores offering similar functionali

Apple has huge economies of scale and its public services margins imply costs are roughly 10%. That’s why you won’t see app stores offering similar functionality charging less than 20% ever.

bananaface 6y ago
Epic charges 12%.
- valuearb 6y ago
  I said similar functionality.
- makomk 6y ago
  Epic is arguably the example that proves the point. They're literally paying companies to give games away for free on the Epic Games Store, week after week, presumably in the hope of making it a big enough player to make the money back sometime soon. Short-term financial viability is clearly not important to them. Yet, despite all that, their cost-cut store still can't implement basic features like a shopping cart.
  - bananaface 6y ago
    I doubt it even costs them 12% to deliver games over a CDN. On a break-even project, the entire budget for the game would be only 8 times that. I think they charge whatever they can get away with and meaningful competition will drive it down dramatically.
    - valuearb 6y ago
      Apples documented service margins put App Store costs at a minimum 10% of app revenues.
      - bananaface 6y ago
        If Apple provided it, I don't trust it. There are infinite ways to arrange accounts. "We simply can't give you a raise, we don't have the budget." I think if there was competition, their prices would drop dramatically, and that would show you how much it actually costs them.
ryanbrunner 6y ago
Apple derives more value from an app ecosystem than just the 30% cut though. By the logic of looking only at App store margins as the value of the app store, Apple should immediately refuse to support Facebook, Twitter, LinkedIn, and tons of other apps, since they provide zero revenue and probably use pretty significant bandwidth. Just having a healthy app ecosystem is probably worth more than the actual money you're pulling in from the apps themselves.
- valuearb 6y ago
  Apple does see this. That’s why they only get 30% from paid apps and subscriptions, and spends huge amounts distributing free apps at the same time.
  - ryanbrunner 6y ago
    "Only" 30% of revenue from all transactions done on their platform is a cut that any non-monopolistic platform would dream of.
    - valuearb 6y ago
      Then why aren’t Android app stores charging significantly less, when they don’t even provide the same level of services?

Apple has huge economies of scale and its public services margins imply costs are roughly 10%. That’s why you won’t see app stores offering similar functionality charging less than 20% ever.

bananaface 6y ago

Epic charges 12%.

valuearb 6y ago
I said similar functionality.
makomk 6y ago
Epic is arguably the example that proves the point. They're literally paying companies to give games away for free on the Epic Games Store, week after week, presumably in the hope of making it a big enough player to make the money back sometime soon. Short-term financial viability is clearly not important to them. Yet, despite all that, their cost-cut store still can't implement basic features like a shopping cart.
- bananaface 6y ago
  I doubt it even costs them 12% to deliver games over a CDN. On a break-even project, the entire budget for the game would be only 8 times that. I think they charge whatever they can get away with and meaningful competition will drive it down dramatically.
  - valuearb 6y ago
    Apples documented service margins put App Store costs at a minimum 10% of app revenues.
    - bananaface 6y ago
      If Apple provided it, I don't trust it. There are infinite ways to arrange accounts. "We simply can't give you a raise, we don't have the budget." I think if there was competition, their prices would drop dramatically, and that would show you how much it actually costs them.

ryanbrunner 6y ago

Apple derives more value from an app ecosystem than just the 30% cut though. By the logic of looking only at App store margins as the value of the app store, Apple should immediately refuse to support Facebook, Twitter, LinkedIn, and tons of other apps, since they provide zero revenue and probably use pretty significant bandwidth. Just having a healthy app ecosystem is probably worth more than the actual money you're pulling in from the apps themselves.

valuearb 6y ago
Apple does see this. That’s why they only get 30% from paid apps and subscriptions, and spends huge amounts distributing free apps at the same time.
- ryanbrunner 6y ago
  "Only" 30% of revenue from all transactions done on their platform is a cut that any non-monopolistic platform would dream of.
  - valuearb 6y ago
    Then why aren’t Android app stores charging significantly less, when they don’t even provide the same level of services?