So many here are assuming worst case and not really putting much thought in how, if required, would address this issue. Why are most here assuming they know the solution? Instead it is all doom and gloom from the “Apple will not change” crowd. Ask yourself; how could Apple make this work?
The way I see it - everything is interconnected, so it’s not really possible to change just one aspect of the App Store model and not have any repercussions anywhere else.
Here’s a summary of my thoughts on the matter.
Ultimately, I support the App Store because I view it as an equalising force that makes it possible for an independent developer to reach a billion Apple users. I think this is an important contribution by Apple that often goes under-appreciated by critics.
In this context, I cannot support Epic’s fight to have their own iOS App Store governed by Epic’s own guidelines and payment processing. I simply don’t see how this is a net positive for consumers and developers. Epic is not looking to empower users or developers. They simply want more power, which further evidenced by there not being any lawsuits launched against Sony (which has a stake in Epic) or Xbox.
I sympathise more with DHH (I can understand his consternation to Apple taking $300k of his $1 million of sales), but I also feel what he is pushing for is akin to throwing out the baby with the bathwater.
Currently, the App Store gets its revenue from two sources - the $99/year developer fee, and a cut of app sales from developers. 30% for apps / IAPs, 15% for subscriptions after the first year. That Apple is willing to reduce the cut of developers earning below $1 million tells us that the majority of developers are earning way below this threshold. The bulk of this app revenue comes from a small number of bigger companies (like Epic).
I am willing to bet my last dollar that $100 per year per developer doesn’t even come close to covering the costs of running the App Store. Apple could maybe lower its cut to around 25% and still break even, but the reduction is so minimal that this is unlikely to appease anyone.
To play devil’s advocate - would critics here be supportive of a 20% App Store cut if internal documents showed that’s what is necessary for the App Store to break even?
Alternatively, Apple could choose to increase the annual developer fee, but that also has the consequence of driving away small time developers, many of whom don’t really earn Apple any money, but their apps add a ton of vibrancy and variety to the App Store scene.
There is always the option of Apple simply waiving everything and absorbing the costs of operating the App Store (essentially subsidising it with iphone revenue), but there is always the concern that without a profit motive, Apple will have less incentive to maintain and manage the App Store properly. Which would represent a net negative for us users.
At the same time, it’s not hard to see new video and game streaming apps becoming alternative app stores in themselves. For example, should a game sold on stadia or a movie sold on Disney+ entitle Apple to a cut of the earnings as well?
Given how App Store vitality and viability is important to Apple and its uses, I can understand (and support) Apple naturally being more cautious when dealing with said services. It’s probably better to be more strict upfront (then slowly loosen your reins once you have a better understanding of the ramifications) than adopt a laissese faire attitude (where it will be very hard to institute changes afterwards).
I think that at the end of the day, App Store critics are going about this all wrong. The more they want to burn down the current App Store model, the more reason Apple has to dig in their heels and fight back. I don’t agree that Apple has a monopoly in smartphones or mobile app distribution, and I don’t see this lawsuit going anywhere.
But we will see.
