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> Unlike other social platforms, Roblox’s revenue is nearly all via user spending rather than advertising. As such, Roblox pays 25% of its revenue to Apple and
> Unlike other social platforms, Roblox’s revenue is nearly all via user spending rather than advertising. As such, Roblox pays 25% of its revenue to Apple and Google (30% of transactions on those platforms) whereas Facebook, Snap, et al pay effectively 0. Note that Facebook, which has structurally lower costs to service users than Roblox and is far more mature, has an operating margin of roughly 40% — if the company had to pay out 25-30% first, it would never have “tech company” profit margins, let alone profit dollars.
Wow. I've never though about this before, but this is an awful second-order consequence of the high app store fees set by Apple and Google. It essentially incentivizes App makers to treat users as products not customers!
(Not too surprising for Google, but certainly goes against Apple's public stance).
Well, the app stores could fix that by also demanding a cut from ad revenue.
Well they did and Facebook refused. Hence the "do not track" feature.
Apple did have conversations about how to profit from Facebook’s apps.
But there’s no evidence that the App Tracking Transparency was a direct result of failure to come to terms with Facebook on some type of revenue share.
Even if a portion of the comprehensive set of protections included in ATT was specifically to target Facebook, Apple did not use it to punish Facebook.
Apple’s customers did.
Because when given a choice, 85-96% of all people across the entire planet did not want Facebook tracking them.
If one was to speculate on The decision-making behind platforms’ leadership, it follows to consider Google’s reluctance to follow in the footsteps of Apple with ATT due to google’s own direct reliance on ad revenue.
Apple is no saint, it’s made many compromises on user privacy in the face of business.
But there’s no doubt in my mind that the position of selling products and services, including the distribution of others’ software is by far more consumer friendly than the quiet identification, data collection and targeting of individuals.
Haha, I am imagining the Facebook response to this! :)
In any case I suspect that is too much overreach and would only attract more attention from regulators.
Two wrongs don't make a right, and this is fixing the wrong problem. (The problem being that once I purchase a portable pocket computer, I want it to be mine to use how I want with whatever software I want without asking the manufacturer for permission).
I also hadn't thought about it before, but when you present it that way it's dazzlingly clear - thank you!
Get money from your users: 25% platform tax
Get money from advertisers: No platform tax
More like:
- Get money through the platforms' users and their payment methods, without having to worry about asking for users' credit card information, billing, chargebacks, or individual invoicing: 25% platform tax.
- Get money through your own means, similarly to what Amazon did with Kindle books: no platform tax.
Not sure what you’re talking about, you still can’t buy kindle books on iOS apps.
> Get money through the platforms' users and their payment methods, without having to worry about asking for users' credit card information, billing, chargebacks, or individual invoicing: 25% platform tax.
Fair enough. So I guess if I don't mind worrying about all those things, I can simply reach my own agreement with a PCI-compliant payment service provider to charge customers through my app directly and therefore avoid that 25% platform tax, right?
...right?
You should definitely worry about cashbacks.
You refund 100% but Apple and Google keep their share.
I'm a full-time developer of Roblox games.
It's wild that Apple or Google make as much from my games as I do. Obviously it still works out well enough since I'm not abandoning the platform, but strange anyway.
why is it wild? Microsoft keeps 30% of xbox store sales. Apple, Google, MS, etc. play a massive part in attracting users to the platform.
Console user spend and user acquisition costs are not even remotely similar to the corresponding values in the mobile ecosystem.
Visa and Mastercard provide entire global payment platforms, yet only (generally?) take a small fee per transaction.
Apple seems to do a lot less, but wants ~1/3 of every transaction.
I’m surprised that Roblox haven’t done what Amazon did with Kindle books. They just stopped book purchases through Kindle iOS app.
At this point it’s safe to assume Roblox is as popular as Apple so they don’t have the problem of discovery. Distribution yes for which they can pay the listing price.
Well, Tencent needs to pay the same Apple and Android tax as well for its gaming business, but guess what, Tencent's gaming business is very profitable. The real difference is that Tencent has a big market share in China(arguably the most profitable gaming market in the world) and Roblox has none.
It also makes it almost impossible to compete if Apple/Google has a similar product. They get 100 % of their own earnings, you only get 70 %, so need a much much bigger operational margin. And they still make 30 % off you, so if you're equally big they in reality make 130 % and you 70 %, almost the double of you while having the same sales.
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Google gives you an App Store and maintain the OS that other hardware vendors (and sometimes themselves) implement hardware around. They take a 30% cut for distribution in their special app store and not much else.
Microsoft and Sony take similar cuts for access to their game consoles. In return they provide:
- High quality, robust developer APIs.
- High quality debuggers, graphics debuggers and CPU+GPU profiling tools with in-depth access to hardware counters
- Networking libraries for matchmaking, and a network backend for tunneling network traffic via their online services
- True development kit hardware with expanded resources for debugging tools
- High quality documentation and direct support
- GPU drivers that actually work
- Payment processing
- All for a hardware platform that is typically sold at or below BOM cost for the initial launch of the device
Google provides distribution via the Play Store, and only for about ~4GB of app before they force you to use your own CDN because they have a limit on the size of the app bundle they'll distribute. There's likely things I'm not aware of that Google provides for app developers rather than game developers, but if we're comparing to game consoles then I'm going to compare tool for tool.
Apple's tooling is better, largely because they have way more control over the target hardware and software environment, but they take an additional cost via their highly restrictive app guidelines.
The contrast is stark compared to another of Google's own projects: Stadia.
Much of this comes second hand as I wasn't on this particular team when they were working on Stadia bring-up for proprietary AAA engine (I joined about 2 weeks before Stadia was officially canned).
But the quality of support from Stadia for developers was leagues above what you get from Android. Every few weeks I'll hear from other team members how good it was working with Google for Stadia. The tooling was great. We got developer kit hardware. We had documentation and direct support channels and Google was actively managing outreach and development on tooling to ease transitioning into their systems (Google was one of the biggest driving forces behind DXC's SPIR-V target).
Compare this against the same people commenting on the Android experience and it's the complete opposite. We're left out to dry with poor support while trying to target devices that barely work.
What's the difference? Google actually had to fight to get us to come to their store. They had competition and weren't acting as a toll collector to a captive market. Game developers had the choice to tell Google to kick rocks, Xbox and PlayStation aren't going anywhere. Google had no choice but to play ball with good support and fair pricing. No such pressure exists on Mobile, and they crank the toll as a result.
For the difference between mobile and consoles, it depends on if you have publisher or port team backing or not. Many indie developers do not get devkits, do not get proper access to Nintendo Switch Online, PlayStation Network, or Xbox Live networking, do not get performance monitoring tools, and do not get any documentation or support. For them the most that happens is they export the necessary files in a reviewable archive format and send it in for approval, hoping that the game engine they chose to use properly functions on the given console and that there won't be any major problems that will cause them to go through the review process again. This also applies to any major updates or patches later on. The consoles treat these indie developers the same way Steam, Itch.io, and GOG treat their developers -- as vendors in a storefront, not as equal business partners vital to the operations of the platform. For these indie devs if you want the above features you have to hire somebody to do the porting for you or you have to go through a lengthy and expensive process to be approved to use them. Most console releases of well known indie games like Celeste, Shovel Knight, and Rimworld are handled by port teams for this very reason. On console, if you're below the AA tier you're paying for the cost of the privileges others get instead of you.
However with mobile storefronts at the start everybody gets treated equally since they all have access to the same limited number of features and get the same level of (some would say neglectful) automated support. For the most part Epic Games goes through the same process of uploading a game or program and waiting for approval that Jimbob does. It's only afterwards that the level of access changes. It's this way by design. Not only because early on there were no big names in the mobile space and so no real tier system was necessary, but also because quantity is valued over quality. There are about a thousand uploads to Google Play a week (I haven't found strict data on how many are only games, but the process is the same for games and apps so it doesn't really matter), versus between twenty to thirty on PlayStation and Xbox. Creating unique avenues and methods would bottleneck things horrifically for mobile. As a developer you get an informal discount for the relative lack of quality control and increased competition you'll be facing.
This cost is very evident in the prices of the games. You won't ever see games that aren't asset flips or shovelware below a non-sale price of $1.99 on Xbox Games Store, but you'll see plenty of $0.79 games on Google Play and Steam.
Microsoft/Sony/Nintendo subsidize the development and cost of their dedicated gaming system from the 30% cut of the store sales.
It's very different on the mobile side: Apple sells iOS devices at full cost. With Android, it gets even more mucky as Samsung, the hardware vendor, gets 0% of the sales on their handset (unless the user, for some reason, uses the Samsung store), and Google gets the full 30% for only their software work. So the fact that Google gets 30% is wild.
> Google gets the full 30% for only their software work
Not that I trust Google (my personal phones are Apple) but how do you think a phone with all software made by Samsung will work? Every time I lay my hands on one of their phones (and I have one on my desk for Android development) something annoys me. They somehow think they know how to do UI/UX but they still haven't learned after all these years of "customizing" Android.
So yes, Google deserves some money. Not 30% but some.
So if you sell your hardware at a profit, you forfeit your right to profit off the platform post-sale? Nintendo never sells hardware at a loss either, by the way.
And your Samsung comment doesn’t make sense. Samsung gets the operating system for free and then sells hardware for whatever profit they can get for it. Plus all of the post-sale platform services profit they can manage, just like Google and Apple. What is wild?
I never meant to imply that once a company sell the hardware for profit, they forfeit the rights to profit off the platform. It's really about market power. The two dominant mobile leaders have enough market power to increase their take to 50%, for example, arguing that's how much traditional retailers take, if not for the risk of attracting government interventions.
The intention is to point out that simple arguments of 'Xbox is charging 30%, so it is fine that the mobile platforms do the same thing' failed to take into account of the nuances of the situation. Isn't it weird that these platforms are all charging 30% even through all these platforms have different business models, with different cost structure and provide different values? I hadn't even talked about how Microsoft has been getting no money off sales on Steam when it is their platform, because they hadn't (yet?) lock down the platform.
Finally, Nintendo did sell the Wii U at a loss. [0]
[0]: https://www.gamesindustry.biz/nintendo-still-selling-wii-u-at-a-loss https://www.gamesindustry.biz/nintendo-still-selling-wii-u-a...
FWIW, there are large publishers which successfully negotiate with the ilk of Microsoft[1] and Sony[2] to get a better revenue split, as consoles in fact have more functional competition than mobile phone app stores: people who own a gaming console might could reasonably own a second one if they were interested in some game that was only available on one console or the other; this simply doesn't happen with phones, as only a small handful of particularly-crazy power users would ever carry around a second cell phone. If you want to not release on Xbox unless Microsoft gives you a better deal, it doesn't sound anywhere near as ridiculous to tell your potential customers "you'll have to also own a Playstation" as if you tried to explain to people that to use your new social network they have to also own and carry around an Android phone (or, worse, whatever the third option might be... is there even a third option anymore that would make any sense? ;P). You can tell that Apple has some insane amount of fundamentally market-distorting power as they seriously charge large publishers -- the ones you would expect to have the most leverage -- more than smaller ones; and, with maybe a sole exception of WeChat, we have never heard of anyone getting a better deal out of them, ever.
[1]: https://x.com/tomwarren/status/1671981463040819200?s=46 https://x.com/tomwarren/status/1671981463040819200?s=46
[2]: https://x.com/twthereddragon/status/1672270407179665409?s=46 https://x.com/twthereddragon/status/1672270407179665409?s=46
I never get this argument, but following its logic, is Apple and Microsoft being really charitable by not gatekeeping and taking a cut for every paid-for application installed on their respective desktop platforms? To answer my own question, it just seems that the status quo has inertia. In the way that we don't pay for online news, social media, or search, similarly, we've just accepted a large chunk of our purchase is feeding the app store.
Also, from memory, Xbox/Sony consoles are loss leaders to recoup profits from store sales. I'm not sure if that holds for Google and Apple phones, but I'd be more okay with app store fees if it did.
> But even for iAP, yes 30% is very step but as a consumer I’m significantly more likely to spend money on an app published by a non-major company if I can use Apple as an intermediary
Such an odd take.
I begrudgingly use a Macbook for work - that is the laptop my employer issued for me. I pay for IntelliJ, because I think it is an excellent IDE.
Following your logic, Apple should somehow bite 30% of that yearly subscription, when in truth, I am a customer of JetBrains, not of Apple.
Your logic would be fine if, and only if, there was the option to buy the game outside of the AppStore, and you still chose to buy it through the AppStore. That proves you prefer going through Apple's channel and are their customer after all.
In the Steam case, especially for small/medium developers, there are multiple options to buy their games - I generally prefer GoG.