Apple Earned Over $100 Million From Fortnite

[smetvid]

I think the annual royalty payment should have a cap.

Why? Should the amount corporations pay tax be capped as well? This is how it works in the retail world. Companies that make products pay for distribution, product placement, advertising, marketing, transaction fees, legal fees and whatever else. Apple covers all of that in a market place that would otherwise not exist.

There is absolutely nothing wrong with charging a percentage. Its how a ton of other stores work, taxes, tithing or many other things in our lives. Just because a company makes an app that makes a ton of money doesn't mean Apples expenses also do not go up or that they shouldn't charge what they charge everyone else.

A percentage is about fairness. Its fair to tax an individual and a large corporation 30%. Just because the corporation earns more and that 30% equals a higher amount doesn't mean that 30% is in itself unfair.

Flat taxes rarely work out well in society and the same is true by reducing the 30% feee or capping it just because it made more money. Just like taxes that 30% fee goes towards keeping the store free for free apps or very affordable for new developers who may not earn very much from their apps but do it as a passion. Capping the fee means to keep the same profit margin and quality control Apple may have to raise the fee for the smaller developers or charge to have free apps. The vast majority of developers do not want this and love the App Store exactly as it is. Yeah the bean counters of the larger profitable developers may not like it but we are also talking a handful of developers vs the tens of thousands that enjoy the lower cost of entry.

 

[heov]

Go yell at every other store making money. And target. And Walmart. And grocery stores. And gas stations. And

Thanks for proving the oppositions point: there are multiple stores a product can be sold in to reach consumers lol.

 

[vladi]

Apple created a safe ecosystem which costs money to keep up. They're users want that ecosystem. They aren't going to do that for free. They're a business which will try to make a profit for all their products and services. People mention the walled garden. Those walls are Apple's product. They manage those inside and those that want in. If you are in the ecosystem then you are consuming that product. If you don't like the walls, then you can leave.

Except that it's not safe. They can hack you with sms text message.

 

[vladi]

So what do they deserve to get? What's the number? Cause I can almost 100% guarantee that the other business will want it to be zero.
Listen, Apple didn't make the AppStore for free. They didn't make the iPhone for free. They get to charge as much as the market will bare. If they charge too much, people/business will not pay and leave the platform. If they charge the right amount, people/business will continue to pay. This is generally how it works, how it's always worked. There is no monopoly here, they don't own all cell phones, and or appstore's. If any developer does not want to pay the 30% fee. They simply don't have to charge anything for the app. There is like 10's of thousands of apps on the app store that is free. Apple doesn't charge for any of that. Should they?

IAP can be simple to fix. Just a message in the app that says "You can't purchase here". Make an Ad on TV or other media outlets that tells the public how to get your IAP online via the web or other means that will work. And done. Spend millions on those Ads to make sure people get the message. And you owe Apple ZERO DOLLARS.

You are not allowed to do that. Maybe someone will make Apple to allow that but for now it's a no go.

It still costs you to be a developer for iOS whether you submit free apps or not. So if you are in iOS app business making free apps will get you into red.

You've mentioned there is no monopoly but then you mentioned iPhone (hardware) and Appstore (software). So Apple is in business of doing what exactly?

 

[usagora]

Not at all the same.

This would be like Sony selling a Playstation 5 on Walmart.

Not only does Walmart want a fee (App Store "app" fee) for Sony selling the PS5 there, but it also wants a fee for every online purchase the customer makes with their PS5 (App Store "subscription" fee), all because the PS5 was sold on Walmart. And Sony doesn't have any alternatives either, they HAVE to use Walmart or not sell at all because Walmart is all that is offered (much like how App Store is the only alternative for iOS).

See how bad the system actually is?
If Apple did either of the following:
- lowered the subscription cuts by a lot (say to 5% or lower)
- allowed other stores than only App Store to operate on iOS
everything would be fine. But they're not. And probably won't. Bad for the consumer. Bad for the developers. Good for Apple though..

So Apple getting 30% is "good" for Apple, but the developer getting 70% is...bad for the developer? I'm not seeing the logic in this.

 

[smetvid]

Hope Apples store tax will be reduced or removed. Apples monopoly needs to end.

Why? Why should Apple no longer be able to make money off the store/device/platform/ecosystem that they put the money/resources/years into building up when nobody else was doing the same? Why do people demonize Apple because they created a successful business model that works and are profitable when a lot of companies in the computer industry are not as profitable as they once were?

What Apple does is in no way unique. VHS players could only use licensed VHS formats/tapes. A grocery store can choose what products are in their store. They even have a complex system of charging companies more based on where and how often a product is displayed. Nintendo, Microsoft, Sony all have their own exclusive digital stores. The 30% fee is common among most digital stores.

A monopoly means there is no competition. Apple allows Google. Microsoft, Epic and anybody that wants to have an app on the App Store. As long as they follow the rules. Rules similar to any retail establishment. Apple may use their platform to charge fees to be part of that platform but that does not mean its a monopoly. They still have competition and developers are still allowed to make a ton of money selling apps on the App Store.

Apple is also very fair with their fees. 30% no matter who or how big.

The only companies really impacted by this and only from their perspective that they want higher profits are a handful of larger developers who have subscription services in their apps or want to run their own stores in their apps.

 

[NT1440]

Except they didn't. Apple and Google only hosted small components of the larger app. Many large apps do this, and then allow the end user to download the rest of the content while the app is loading/being set up.

This allows for Epic and other game devs to manage the assets easier than having to push small updates which take days to be approved on devices.

I was talking about at the App store’s inception. That was my understanding of how it worked wayyyy back then. Obviously things have changed, or maybe I always misunderstood it?

 

[cardfan]

Meanwhile apple makes zero off Netflix and others. Why should epic others paying 30% have to subsidize others like Netflix who pay apple nothing.

 

[T-R-S]

Virgin Stores use to take 60% when we sold titles at brick and mortar stores and manufacturing costs were taken out of our 40% - Apple takes 30 we get 70 - zero complaints here!
I was able to move to California and buy a house - thanks Apple for helping small developers like us!

 

[brewcitywi]

I'm not saying that 30% isn't a lot. However, if you lease a store in a shopping mall, you pay rent. With the majority of shopping mall leases, you have a "break point." After your sales hit the break point, you owe percentage rent on the amount which exceeds it.

Again, I'm not saying that 30% is the right amount. But, you're in someone else's shopping mall.

I don't like labelling the App Store a monopoly because the proposed solutions are usually ridiculous. So, we should chop it up and divide it?

 

[Nuno Lopes]

what do they deserve to get? What's the number? Cause I can almost 100% guarantee that the other business will want it to be zero.

It should be paid for hosting, reviewing and distributing the app. As the story has been told in court Epic approached the Apple for that purpose . Yet Apple insisted in getting a cut of the third party business in iOS context.

No Store we have known demanded a cut of the business of a third party product or service before this App Store thingies.

A cut of the business is usually applied when there is some kind of joint venture between companies to create a business channel … together.

Why do I say it is a cut of the business instead of a sale of a product or subscription. Because in App payment is not App Store that is converting the product or service into a sale, furthermore some things being payed aren’t even in any shape or form offerer by the App Store.

Some might find it an abusive practice.

 

[ikramerica]

I'm not saying that 30% isn't a lot. However, if you lease a store in a shopping mall, you pay rent. With the majority of shopping mall leases, you have a "break point." After your sales hit the break point, you owe percentage rent on the amount which exceeds it.

Again, I'm not saying that 30% is the right amount. But, you're in someone else's shopping mall.

I don't like labelling the App Store a monopoly because the proposed solutions are usually ridiculous. So, we should chop it up and divide it?

This is something non-business owners are ignorant of.

 

[mi7chy]

That's a big handout for doing nothing. If I was Epic I'd sue Apple too for extortion.

 

[I7guy]

That's a big handout for doing nothing. If I was Epic I'd sue Apple too for extortion.

If by nothing what is meant...
- developed the platform
- provided management and distribution
- gave access to 1 billion devices, letting Epic earn $233M
- all for $99 or so

I agree.

 

[dynamojoe]

If you sell something in a walmart, walmart isnt entitled to 1/3rd of the revenue you get from a continued business relationship beyond the initial sale

Don't move the goalposts. Epic is not suing over the subscription model.

Epic is suing because they want to sell their products in all Walmarts rent-free and use their own registers to process the sale.

 

[notabadname]

Epic agreed to a contract with Apple to place it’s game in a storefront that exposes the game to over a billion people.

After growing their business to the point were they believed they don’t need Apple (well, ok , they need Apple’s store but they don’t think they should have to pay for the store owner‘s rates anymore - we just want the right to set our own rates in YOUR store please),

they knowingly and intentionally violate that contract . . .

And Apple’s the bad actor ? Whatever . . . .

 

[notabadname]

Thanks for proving the oppositions point: there are multiple stores a product can be sold in to reach consumers lol.

Thanks for proving the oppositions point: there are multiple “stores” and platforms Epic can sell it’s game via, LOL.

 

[Eso]

Damn.

It’s like people ignore that. Apple isn’t a charity.

And who is saying it should be free? By all means, let Apple charge developers to sell their apps on the App Store. But don’t demand a cut for services that don’t utilize your infrastructure.

Maybe some of you weren’t even teenagers when the App Store launched, but in-app purchases was essentially designed as a way for apps to offer “trial“ versions that could be upgraded to full versions. This was a lazy workaround for what amounts to a quite poorly designed store. It has never been appropriate for subscription services from 3rd parties.

When you visit MacRumors, you connect to servers and utilize bandwidth that arn pays for. Should Apple get cut of membership fees and advertising revenue because you view the site on an Apple device or through Safari? By the same logic, when you play Spotify, you connect to servers owned by Spotify, utilizing bandwidth that they pay for for music that they pay to license. Apple has nothing to do with any of that, thus they are entitled to absolutely none of the revenue that Spotify collects for it. That is simple fact.

If you disagree, I’ll be charging $3 per reply. After all, if I didn’t write this then you couldn’t reply to it. That’s about as reasonable as Apple.

 

[1258186]

So Epic made $300M?

So Apple made $100m for doing fk all.

 

[I7guy]

So Apple made $100m for doing fk all.

Apple made $100m for giving Epic the ability to earn $333M. That doesn't seem like...what was the expression used above? Epic otherwise would earn $0 from ios customers.

 

[mi7chy]

30% is extortion when Epic does all the work to develop the game, host the game servers and process their own payment. All Apple does is provide a bookmark to the Epic installer so it shouldn't be more than 2 to 3% which is the typical credit card merchant fee.

 

[1258186]

Apple made $100m for giving Epic the ability to earn $333M. That doesn't seem like...what was the expression used above? Epic otherwise would earn $0 from ios customers.

If Fortnite wasn’t available on iOS chances are their users would just play it on a different platform instead. Apple did not make Fortnite a success.

 

[I7guy]

If Fortnite wasn’t available on iOS chances are their users would just play it on a different platform instead. Apple did not make Fortnite a success.

Apple made Fortnite a success on IOS, imo. Nonetheless, it's still Apples' platform and Apples' rules...until it isn't.

 

[ikramerica]

Epic agreed to a contract with Apple to place it’s game in a storefront that exposes the game to over a billion people.

After growing their business to the point were they believed they don’t need Apple (well, ok , they need Apple’s store but they don’t think they should have to pay for the store owner‘s rates anymore - we just want the right to set our own rates in YOUR store please),

they knowingly and intentionally violate that contract . . .

And Apple’s the bad actor ? Whatever . . . .

Epic created all the tools and APIs used to write code for iOS, created the distribution and SAFE billing platform, and created the marketing and support system to establish a billion customer base?

 

[Salvor Hardin]

Google, Playstation, xbox. I think all those have the same 30% but apple is the one epic is bitching about.

If Epic thought they had a chance at forcing their game store onto consoles they’d start bitching in a heartbeat, the games industry is so overly reliant on their unreal engine that they’d probably submit to them.