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> the game earned more than $700 million from iOS customers over the two years before it was pulled by Apple I'll save you the math, 30% of $700 million is $21
by Jyaif 6y ago
> the game earned more than $700 million from iOS customers over the two years before it was pulled by Apple
I'll save you the math, 30% of $700 million is $210 millions.
$210 millions of pure profit (the bandwidth is essentially free).
It's insanity!
- tedunangst 6y agoHow much profit did Epic make on their $490 million cut?
- croon 6y agoYou mean on their product over every other product on the appstore? Compared to the appstore over.... nothing else on that platform. One is profit from a product, one is profit from capture.
- teruakohatu 6y agoAt $100 million/year of almost pure profit it is almost a business unit of Apple in and of itself.
- ZephyrBlu 6y agoEh, I don't know. I think Apple's profit is in the tens of billions. On that scale, $100M/yr is peanuts.
- Retric 6y agoAt a minimum their paying over 2% in credit card fees so that’s another 14+ million in expenses. However, it’s also clear their fixed fees favor independent developers at the cost of major companies. So, finding their actual profit is more complicated than just a fixed percentage of revenue.
- cinntaile 6y agoDo companies the size of Apple really pay 2%? I'd be surprised if they don't have special, cheaper rates that they contractually agreed upon.
- dangrossman 6y agoThey probably pay some fixed markup over interchange, e.g. "cost plus" pricing, which means it'll be over 2% for some types of credit cards still. Even Apple is not going to get their processor to take a loss on charging cards. Top rewards cards pay out 2% or more as cash back, so the cost to charge that card is going to be over 2%. Charging a basic checking account debit card, on the other hand, can be as low as 0.05% plus $0.21. For an average card mix, their processing cost averaged over every transaction is probably under 2% however.
- Retric 6y agoEven 0.05% + $0.21 >= 2% on any transaction of 14$ or less. I am not sure of the mix of transactions their dealing with but sub 2% seems unlikely, when freemium games average transaction is ~14$.
- martin_bech 6y agoUS Creditcards are crazy... A completely normal creditcard fee in Denmark is $0.1 + 0.19% Taken from this official slide https://images.ctfassets.net/r8xjjnzwpfxs/3lLnB85SDDj5FTDmzYsgXF/bad07002e77d047a685b4a707923b96d/Dankort_Prisliste___vrig-handel_01-02-2018.pdf https://images.ctfassets.net/r8xjjnzwpfxs/3lLnB85SDDj5FTDmzY...
- cinntaile 6y agoI thought the main reason for this is because there are a lot of lucrative cashback regimes in the US? I assume Denmark doesn't have those.
- donmcronald 6y ago> At a minimum their paying over 2% in credit card fees I’d be shocked if that were true.
- Retric 6y agoWhile sheer number of transactions lowers fees the likely small transaction size raises them. Best number I saw was consumers averaging 14$ transaction sizes with freemium games, though fortnight may be unusual sub 2% fees seems extremely unlikely.
- ISL 6y agoSurely maintaining first-class hardware, software, and marketplace ecosystems has at least a little associated cost?
- emsy 6y agoFor $210 million (that's only Epic's contribution), they could've created a first-class marketplace ecosystem. In reality, it's neither first-class nor worth whatever they're paying to actually run that department.
- naikrovek 6y agopeople forget how terrible steam was for its first 5 years, when compared to today. now, people are comparing the epic games store of today with the steam we have today, and convincing themselves that it's a fair comparison.
- throwaways885 6y agoI think the big difference between is how Epic treats its customers and how Valve treats its customers. Epic could've gone the GOG Galaxy route ("use it, or not, your choice"), but they decided to force people into their watered down launcher before it was ready. Even Xbox is being more open lately. You can't just match your competition, you have to exceed it in some special way before people will switch.
- deleted 6y ago[deleted]
- high_priest 6y agoIf it wasn't for the predatoric practices with device obsolescence I would disagree. Apple created the platform that allows this service (Fortnite) to exist and earn it's share of revenue. The fee that is paid is not only for current maintenance and upkeep of the distribution platform (which is their store), but also research, development, security measures and most importantly, it is shared with other departments, giving us the Apple M1 chips in return! Much worse offender is Valve and Steam, where they don't really have many places to allocate revenue from not only store sales, but also the second-hand market.
- 8note 6y agoYou can say the same about TSMC though, yet they don't extort a tax for every transaction done on a chip they manufactured. Apple handles the second hand market by not allowing one, don't they? I can't give an app I've bought to my friend
- eganist 6y ago> The fee that is paid is [...] shared with other departments, giving us the Apple M1 chips in return! Do you have a source on the claim that profits from the app store explicitly funded development of the m1 chip? That's an interesting claim, and it implies that Apple's hardware division alone is in the red and can't sustain its own r&d.
- astrange 6y agoApple officially only has one P&L.
- donmcronald 6y ago> The fee that is paid is not only for current maintenance and upkeep of the distribution platform (which is their store), but also research, development, security measures There are lots of updaters for the PC that can run from a web server. You can put the update files on Cloudflare or AWS for redundant, highly scalable distribution. The infrastructure is worth basically $0 and there is nothing complex about an updater, especially for a company that already integrates payment processing on so many other platforms. Apple makes it sound complex and uses it to justify their toll taking.
- stock_toaster 6y agoAnd how does that compare to Sony or Microsoft in this case?
- guidedlight 6y agoExactly. Sony and Microsoft likely take similar 30% cuts. I suspect that contracts with those companies forbid disclosure of that information, which is why Apple is the scapegoat here.
- deleted 6y ago[deleted]
- yrral 6y agoIt's a bit more nuanced than that. Per transaction costs: They run 15% off sales on itunes gift cards, cc "swipe" charges, costs of credit card fraud (employee costs, management overhead). Platform costs: Infrastructure to deal with developers, distribution, tax compliance, refunds, policing local governmental policies, customer service, fraud monitoring, etc etc.
- realityking 6y agoThis is a good point t I hadn’t considered. The App Store neatly abstracts sales tax/VAT for all markets in which the App Store operates. For a small to mid sized developer that’s a huge boon - especially for those with operations in the EU. A large player like Epic obviously doesn’t care as they have to built that anyway for their PC store.
- azinman2 6y agoAnd how much do agents make representing talent? Or middle men make to distribute liquor? You’re ignoring the entire history of distribution companies for software (especially games!) and their historical charges. 30% (1st year only then drops to 15%) is way less than the historical price. The fact that the product experience is so good and seem less makes it SEEM like it should be free, but you’re ignoring the entire history and all the work done to get to this point.
- jbverschoor 6y agoFortnite is selling digital items. PURE PROFIT. How is that not insanity?
- selfhoster11 6y agoThat too, is insanity. Two negatives don't cancel out, they are both just as insane.
- jbverschoor 6y agoBoth insane, case closed ;-)