4 ms·

The harm to consumers is the higher price that they have to pay. Epic didn't just keep the 30% all for themselves, they lowered prices.

threeseed 6y ago
Of course they lowered the prices. It was a PR exercise to show the world the wondrous benefits of a potential Epic Games Store on iPhone/Android. And of course once they had such a store they pinky promise to never increase the prices in the future.
- reissbaker 6y ago
  I think the point is that competition will prevent them from doing that. And it worked: in response to Epic's lower rates, Steam also cut their rates. If Epic raises the rate to 30% they'll be more expensive than Steam, and won't be able to compete.
  - threeseed 6y ago
    I just checked and Fornite is not available on Steam. So all that will happen is that certain games will exist only in one store and not be subject to competition. Or they will secretly sell your data to third parties which Apple won't do.
    - tech234a 6y ago
      I think they were referring to the percentage taken when processing sales for other developers on the Epic Games Store and Steam.
    - reissbaker 6y ago
      Fortnite is not required to be on Steam for there to be competition in the game store marketplace. As a game developer on PC, if you don't like Valve, you can switch to Epic, regardless of whether Fortnite is there or not — and Valve has no policies prohibiting you from doing so if you want to (unlike iOS, where Apple prohibits alternate game stores). You might sell fewer games because it's less popular, but that's not due to any anticompetitive action on Valve's part — and it may not matter that you sell fewer games, because Epic may pay you enough for exclusivity that you make up the difference anyway. The "injury" that Epic is trying to prove with Apple is that game developers are injured by lost sales due to Apple's policies, or lost revenue due to Apple's cut, and that this is due to Apple's anticompetitive policies that (literally do) prohibit competing stores from existing and offering developers an alternative. Game developers are not injured — at least, not in the terms usually used in antitrust cases — by Fortnite only existing on the Epic store and not on Steam. You might argue that consumers are somehow injured by Fortnite existing on the Epic store but not on Steam. But I think that's pretty hard to prove, at least under existing antitrust law: Fortnite is free, and its microtransactions are not particularly more expensive than competitors, and if you don't want to play Fortnite because you don't like the Epic store for some reason, there are dozens of competing battle royale shooters on every platform Fortnite runs on (and, now, even platforms Fortnite doesn't run on). Where is the lack of competition? Or the injury? Epic's case centers on injury not to consumers, but to developers. That case is easier to make, and it's the case they care about because they operate a game store that doesn't exist on iOS due to Apple's policies — and a game engine business that operates on a 5% revenue share model, which naturally would increase its profits if Apple stopped taking a 30% tithe from developer revenues in the first place. They're perfectly willing to sacrifice Fortnite Mobile, a comparatively small amount of revenue, temporarily if it gets their other business streams more income in the future.
fatbird 6y ago
They lowered prices as part of a calculated stunt. If Apple is suddenly turning over 20% of the purchase price to devs, why would the devs lower the price when they're getting an extra 20% at the same price point?
- deleted 6y ago
  [deleted]
- rbranson 6y ago
  This is the correct take. Generally speaking, the prices set by Epic before this stunt likely approximated the highest price which didn't reduce aggregate spending.
mythz 6y ago
Of course a competing App Store can offer lower prices, they don't bear any of the costs for developing and managing the iOS ecosystem Apple spent billions over a decade building (that many other companies lost fortunes failing to compete against). They can just popup a virtual store in someone else's successful established platform and access a market of 1B+ credit cards they had no hand in creating where they can dictate their own margins for selling virtual goods - somehow feeling entitled to get a free ride on the massive development & maintenance infrastructure costs that is subsidized by the App Store. Strange most other markets don't just let everyone to sell their products (physical or virtual) on their markets at no cost [1]. [1] https://www.ign.com/articles/2019/10/07/report-steams-30-cut-is-actually-the-industry-standard https://www.ign.com/articles/2019/10/07/report-steams-30-cut...
- modeless 6y ago
  Apple profits handsomely from the iOS ecosystem every time someone buys an iPhone to access it, or buys a Mac because Apple won't allow building iOS apps without one, or pays the annual developer program fee. They don't need to triple or quadruple dip to be the most valuable publicly traded company in the world.
  - mythz 6y ago
    iOS is a major cost to develop that's given away for free, continually invested in, advanced, developed & updated. Apple is allowed to have more than one business model on the platform they built, which was their primary focus that reshaped the company at a great opportunity cost to their other businesses. Ultimately the Company bet paid off & became successful against a number of incumbents who lost fortunes trying to compete in Mobile OS's. The App Store is now one of their major sources of revenue for having built a successful platform (a category they helped pioneer). The nominal annual fee is a cost for accessing the dev tools only, it's in no way a royalty-free cost to sell products on one of the most lucrative markets in the world - that's what their standard royalty % (unchanged from the outset) covers.
    - sumedh 6y ago

threeseed 6y ago

Of course they lowered the prices. It was a PR exercise to show the world the wondrous benefits of a potential Epic Games Store on iPhone/Android. And of course once they had such a store they pinky promise to never increase the prices in the future.

reissbaker 6y ago
I think the point is that competition will prevent them from doing that. And it worked: in response to Epic's lower rates, Steam also cut their rates. If Epic raises the rate to 30% they'll be more expensive than Steam, and won't be able to compete.
- threeseed 6y ago
  I just checked and Fornite is not available on Steam. So all that will happen is that certain games will exist only in one store and not be subject to competition. Or they will secretly sell your data to third parties which Apple won't do.
  - tech234a 6y ago
    I think they were referring to the percentage taken when processing sales for other developers on the Epic Games Store and Steam.
  - reissbaker 6y ago
    Fortnite is not required to be on Steam for there to be competition in the game store marketplace. As a game developer on PC, if you don't like Valve, you can switch to Epic, regardless of whether Fortnite is there or not — and Valve has no policies prohibiting you from doing so if you want to (unlike iOS, where Apple prohibits alternate game stores). You might sell fewer games because it's less popular, but that's not due to any anticompetitive action on Valve's part — and it may not matter that you sell fewer games, because Epic may pay you enough for exclusivity that you make up the difference anyway. The "injury" that Epic is trying to prove with Apple is that game developers are injured by lost sales due to Apple's policies, or lost revenue due to Apple's cut, and that this is due to Apple's anticompetitive policies that (literally do) prohibit competing stores from existing and offering developers an alternative. Game developers are not injured — at least, not in the terms usually used in antitrust cases — by Fortnite only existing on the Epic store and not on Steam. You might argue that consumers are somehow injured by Fortnite existing on the Epic store but not on Steam. But I think that's pretty hard to prove, at least under existing antitrust law: Fortnite is free, and its microtransactions are not particularly more expensive than competitors, and if you don't want to play Fortnite because you don't like the Epic store for some reason, there are dozens of competing battle royale shooters on every platform Fortnite runs on (and, now, even platforms Fortnite doesn't run on). Where is the lack of competition? Or the injury? Epic's case centers on injury not to consumers, but to developers. That case is easier to make, and it's the case they care about because they operate a game store that doesn't exist on iOS due to Apple's policies — and a game engine business that operates on a 5% revenue share model, which naturally would increase its profits if Apple stopped taking a 30% tithe from developer revenues in the first place. They're perfectly willing to sacrifice Fortnite Mobile, a comparatively small amount of revenue, temporarily if it gets their other business streams more income in the future.

fatbird 6y ago

They lowered prices as part of a calculated stunt. If Apple is suddenly turning over 20% of the purchase price to devs, why would the devs lower the price when they're getting an extra 20% at the same price point?

deleted 6y ago
[deleted]
rbranson 6y ago
This is the correct take. Generally speaking, the prices set by Epic before this stunt likely approximated the highest price which didn't reduce aggregate spending.

mythz 6y ago

Of course a competing App Store can offer lower prices, they don't bear any of the costs for developing and managing the iOS ecosystem Apple spent billions over a decade building (that many other companies lost fortunes failing to compete against). They can just popup a virtual store in someone else's successful established platform and access a market of 1B+ credit cards they had no hand in creating where they can dictate their own margins for selling virtual goods - somehow feeling entitled to get a free ride on the massive development & maintenance infrastructure costs that is subsidized by the App Store. Strange most other markets don't just let everyone to sell their products (physical or virtual) on their markets at no cost [1]. [1] https://www.ign.com/articles/2019/10/07/report-steams-30-cut-is-actually-the-industry-standard https://www.ign.com/articles/2019/10/07/report-steams-30-cut...

modeless 6y ago
Apple profits handsomely from the iOS ecosystem every time someone buys an iPhone to access it, or buys a Mac because Apple won't allow building iOS apps without one, or pays the annual developer program fee. They don't need to triple or quadruple dip to be the most valuable publicly traded company in the world.
- mythz 6y ago
  iOS is a major cost to develop that's given away for free, continually invested in, advanced, developed & updated. Apple is allowed to have more than one business model on the platform they built, which was their primary focus that reshaped the company at a great opportunity cost to their other businesses. Ultimately the Company bet paid off & became successful against a number of incumbents who lost fortunes trying to compete in Mobile OS's. The App Store is now one of their major sources of revenue for having built a successful platform (a category they helped pioneer). The nominal annual fee is a cost for accessing the dev tools only, it's in no way a royalty-free cost to sell products on one of the most lucrative markets in the world - that's what their standard royalty % (unchanged from the outset) covers.
  - sumedh 6y ago