4 ms·
> I've never understood why video game consoles are the relevant platform. From the courts’ perspective, it isn’t. The relevant market definition, as establish
by turquoisevar 3y ago
> I've never understood why video game consoles are the relevant platform.
From the courts’ perspective, it isn’t. The relevant market definition, as established by the courts, is digital mobile gaming transactions.
I’ve called into the District Court’s hearings almost every day, and many days were spent on determining the relevant market, but the long and short of it is that this definition was chosen because:
- The impetus of the case was Fortnite
- Epic was unconvincing in establishing their EGS was more than just a gaming storefront, which limited the scope of the case to gaming
- the court established that free-to-play games generated the vast majority of the App Store revenue
You also have to remember that the court can’t just hand out judgments that affect things beyond the case in front of it.
This case was Epic v Apple and not, say, a class action by multiple app developers, so the court's conclusions will be limited to the facts that pertain to those two parties.
In other words, other markets might exist, but they might not be relevant to the case at hand.
Additionally, civil courts prefer to split the baby; in this case, this seems to be a middle ground between Apple’s proposed relevant market (games in general) and Epic’s (Apple’s App Store).
An interesting tidbit is that Nintendo’s Switch made a minor cameo of sorts because you can make transactions on it on the go (i.e., it's mobile). Still, the main competitor, according to the court, was Google, leading the court to conclude that Apple is primarily in a duopoly with Google.
Personally, I think video game consoles would be part of the relevant market because of the similarities in market dynamics. The way the payment for IP is structured (commission), the way entry to the market is managed (certifications, similar to app review), the way there’s a single brand market (i.e., monopoly by manufacturers), etc.
While the purpose of the devices might be different, the underlying products are the same (software), and the market mechanics are nearly identical.
Even the platform limitations are artificially created by the platform holder (i.e., what you can and can’t do on iOS is artificially limited, just like what you can and can’t do on consoles is artificially limited by Sony and Microsoft).
Drilling it down further, you’ll find that on Xbox, you have access to non-gaming apps, and plenty of people use their iPads as a game device for their kids. Further blurring these lines of purpose.
> As an Apple user, I don't even play video games, on either iPhone or Mac
You might not, but it wouldn’t come as a surprise to you that others might.
I, for example, play games on my Apple devices, as do others in my household.
> And as an Apple developer, I don't write video games either.
Same here. I mainly write apps, but I dabble in games and know plenty of other devs who make games.
> Games are 100% irrelevant to my computing life.
What I’m trying to say is that anecdotal arguments aren’t solid. This is not a dig at you; mine aren’t either.
> The problem is that the iTunes Music Store was based on selling 99 cent songs. 30% of that is just 30 cents.
I don’t follow this logic.
Does it matter if $300,000 is extracted via a million $1 transactions or 10,000 $100 transactions?
Ultimately, you end up paying $300,000 in commissions.
> Before the App Store, computer software was almost never in the 99 cent price range.
There’s a lot to unpack with this simple statement.
First is, of course, that the race to the bottom is a pro-competitive symptom.
If we, as devs, didn’t have to compete so hard, we wouldn’t have to sell our software at low prices.
Ironically, this is good for consumers, but the devaluation of software isn’t so great for us developers.
Secondly, this, of course, undermines your iTunes $0.99 argument. Whatever it used to be, it’s now the same as with songs via iTunes.
Does this mean you’re ok with the 30% commission or 15%, whichever applies to you?
This is why I’m saying I have a hard time following your logic because I guess I don’t know exactly what you’re trying to say.
Lastly, before the App Store, the revenue cut developers got was abysmal. I don’t know if you’re old enough to recall any of this. I barely am, but it wasn’t pretty.
In brick-and-mortar times, you would have a good deal if 40% made its way to you, but more often than not, it was a 70/30 split, with only 30% making it to you, with outliers as low as 10%.
Specifically for “smartphone” software, this continued for a while, with carriers being cutthroat regarding revenue split.
In the years before the App Store, things got better with Nokia and BlackBerry, who adopted a revenue split closer to 50/50, and Qualcomm’s BREW actually was “good” at times with an 80/20 split in favor of developers.
The problem with those, however, was that the barrier to entry was relatively high and costly.
Then Apple came along with their 70/30 split, which, as you said, was a copy-paste from the iTunes Store. Still, because both an all-encompassing commission (payment processing wasn’t a separate charge as was typical before then) and because of the abysmal revenue splits in the decades before while also having a comparatively low barrier of entry, it was received with literal cheers.
Although I think people were also happy not to have to deal with carriers anymore, that was a huge pain.
Sure, App Review can be a pain for some, but it’s a utopian publishing pipeline compared to the hoops one had to jump through and the negations you’d have to go through every time before the App Store came along.
Does that mean that Apple is perfect?
By no means, there’s plenty they can improve on, but within the historical context of the time, it was like offering someone a glass of ice water to someone who was stuck in hell (to paraphrase a quote from Jobs on iTunes on Windows that didn’t age well).
I couldn’t care less about the commission. I was content with 30%, and I knew what I eagerly signed up for. The 15% discount was a nice bonus, and I think I got, and still get, my money’s worth and then some.
While my experience is overwhelmingly positive, I think there are other, more pressing matters for me as a developer that Apple can improve on.
- lapcat 3y ago> Does this mean you’re ok with the 30% commission or 15%, whichever applies to you? This is why I’m saying I have a hard time following your logic because I guess I don’t know exactly what you’re trying to say. Let me start with this, because it may clarify a lot. I qualify for the Small Business Program 15%, and while I think that Apple's developer services are totally crappy and not even worth 15%, from my perspective the cut is not among the App Store's biggest problems, and I would happily pay an even larger cut if I actually got a good return for the investment. My goal was merely to highlight the historical origin of the App Store, which is important in understanding how we got to this point today. > The relevant market definition, as established by the courts, is digital mobile gaming transactions. As invented out of thin air by Yvonne Gonzalez Rogers. But I'm not really interested in arguing the legalisms. I think the decision was bad, but that's par for the course in our legal system. I'm more interested in the public debate over the issue, here on Hacker News, on social media, in the news media, etc. Regardless of what the judge decided, the people in the public who defend Apple often point to gaming consoles and consider them to be the relevant platform. > What I’m trying to say is that anecdotal arguments aren’t solid. This is not a dig at you; mine aren’t either. I'm not sure what you think I was arguing, but it was simply that iPhone is a general-purpose computing device. Of course gaming is one of those purposes but definitely not the only purpose. Indeed I would argue that gaming is not even the main purpose, because after all, iPhone shipped in 2007 with zero games, and while Apple has created a lot of apps for iPhone, Apple has created almost no games for iPhone. (I think they had a Texas Hold'em game way back in the day, and they also made Warren Buffett's Paper Wizard.) I wasn't trying to deny that people use iPhone for gaming; that would be a silly argument. You can argue that gaming consoles have some additional capabilities besides games, but does anyone ever buy a gaming console who doesn't play games at all? That would be silly and pointless. Yet huge numbers of people buy iPhones and iPads and Macs with no desire to game on them. Thus, I argue that those are general-purpose computing devices, unlike gaming consoles. > Does it matter if $300,000 is extracted via a million $1 transactions or 10,000 $100 transactions? Yes. 30 cents is actually a very good deal for a 99 cent transaction. I don't think you'll find a better one, and many payment processors would charge 30 cents plus a percentage. At least as far as payment processing is concerned, though, 30% is a crappy deal for a $100 transaction. So the question is, how much does the App Store add to the value above and beyond payment processing? I would argue, not much in most cases. > Ironically, this is good for consumers, but the devaluation of software isn’t so great for us developers. I dispute that it's good for consumers. You get a different type of software in a race-to-the-bottom market. When the platform makes it difficult for developers to produce quality, well-crafted, sustainable software, you get exploitative crap instead, and I think the epithet "crap store" is richly deserved. You can really see the difference in the Mac App Store, because on the Mac, developers don't have to be in the App Store, and quite a few important apps are missing entirely. It didn't have to be that way. The iTunes Music Store model was a very poor fit for software. For example, the "top charts", based on unit sales, was one of the main ways to get noticed in the App Store and was a big reason for the race to the bottom. The top charts are tolerable for music, where every song and album is more or less the same price, but it doesn't work well for software, the price of which varies greatly, so unit sales are not a good representation of the quality of the software. > In brick-and-mortar times, you would have a good deal if 40% made its way to you, but more often than not, it was a 70/30 split, with only 30% making it to you, with outliers as low as 10%. 30% of $100 is $30. 70% of $0.99 is $0.69. I'll happily take the 30% cut of the much higher price. > Sure, App Review can be a pain for some, but it’s a utopian publishing pipeline compared to the hoops one had to jump through and the negations you’d have to go through every time before the App Store came along. This was not my experience. Before the iPhone came along, I was a Mac developer. We sold our software on the web directly to customers, bypassing all middlemen except for payment processors. Apple got a 0% cut. What happened in your comment was the same as I've heard in most arguments defending the App Store: the "history" goes directly from brick-and-mortar times to the App Store, completely ignoring the golden age of indie developers selling software on the web. iOS was based on Mac OS X, UIKit was based on AppKit, and of course they both used Objective-C as the programming language at the time. The App Store was practically an invitation for Mac developers to jump in right away, and many did. But the business model of the App Store was atrocious compared to the Mac. (The Mac App Store, a clone of the iOS App Store, didn't open until 2011). From my perspective, the App Store experience was nearly infinitely worse than the Mac developer experience. It was not like "offering someone a glass of ice water to someone who was stuck in hell". Rather, it was more like kidnapping someone already in heaven and sending them down to hell. This is why I make so much of iOS being a general-purpose computing platform. It's very much like the Mac, except for the form factor, and it could have been much more like the Mac in terms of third-party software. And at least in Europe, perhaps it will be soon.