Apple Says 'We Won't Make an Exception' for Epic Games in App Store Dispute

[4nNtt]

Considering the AppStore a service is the same as considering your entire ecosystem as a super service and frankly that is double dipping.

Apple spends significantly less on R&D then other tech companies which makes the “we need 30% to pay for R&D” argument fall flat. The rules that are focused on rent seeking are pretty toxic to the ecosystem and will only become more toxic over time if not reigned in. This is how Apple becomes the IBM or Microsoft of the past– the evil empire. Apple really needs to stop acting like this is a service and build some real services with the R&D cash they are not using compared to their peers. Comparing to video game stores and physical stores is pretty disingenuous as both have vastly different rules and business models representing those fees. Apple really needs to scale the store back to just payment processing and distribution. They can offer actual services add-ons for developers like extra storage, vertical specific solutions, etc. where developers get something tangible for their money where they are not locked in. Developers should not be locked out for having business interests that compete with Apple’s. It should be a level playing field for all. The rent seeking aspects of the store really needs to end.

 

[EvilEvil]

hmm. Decent games? To a select few? On which platform and store?

let me know if this is consistent and for several years. Así let me know when you have proof that the developers are getting paid for the giveaways of each game.

Yes. AAA and indie games. They've been giving away free games for almost two years now.

 

[4492865]

Considering the AppStore a service is the same as considering your entire ecosystem as a super service and frankly that is double dipping.

Apple spends significantly less on R&D then other tech companies which makes the “we need 30% to pay for R&D” argument fall flat. The rules that are focused on rent seeking are pretty toxic to the ecosystem and will only become more toxic over time if not reigned in. This is how Apple becomes the IBM or Microsoft of the past– the evil empire. Apple really needs to stop acting like this is a service and build some real services with the R&D cash they are not using compared to their peers. Comparing to video game stores and physical stores is pretty disingenuous as both have vastly different rules and business models representing those fees. Apple really needs to scale the store back to just payment processing and distribution. They can offer actual services add-ons for developers like extra storage, vertical specific solutions, etc. where developers get something tangible for their money where they are not locked in. Developers should not be locked out for having business interests that compete with Apple’s. It should be a level playing field for all. The rent seeking aspects of the store really needs to end.

There's another fallacy at play here ... the price of a product is NOT based on the cost to make it. It's ultimately based on what the consumer is willing to pay for it. And in a truly competitive market, this drives prices down (or up). And if a product costs more to make than a consumer is willing to pay for it... well then the product isn't viable. That's how a market works.

If we go by the logic that app store costs must be covered, then by the same logic, we are paying too much for an iPhone, because it costs much less to make. We are willing to pay more for it though. And that's fine.

In the case of that phone, we have options. I can go to different stores for the exact same type of phone since phones are not all priced equally across all stores. In the case of iOS apps, I don't have that option. I either buy it at Apple, or not at all. And this is what harms consumers ... there is no possibility for anyone else to supply iOS apps at a lower price. And Apple can thus charge what it wants.

 

[System Of A Down]

I understand where both sides are coming from, but Epic is going to lose this. They don't have leg to stand on in the court of law. They knowingly violated the terms of their contract to prove a point?

There is no both sides to this. Apple is being anti-consumer and anti-developer.

Really affecting my prospects of owning the new Apple Silicon laptop in the future if Apple is going to stick to this route. No sense of being a developer on a platform that is anti-developer.

 

[cmaier]

There is no both sides to this. Apple is being anti-consumer and anti-developer.

Really affecting my prospects of owning the new Apple Silicon laptop in the future if Apple is going to stick to this route. No sense of being a developer on a platform that is anti-developer.

And that, exactly, is how the free market is supposed to work. If you are free to go develop someplace else, then what’s the problem?

 

[mattopotamus]

There is no both sides to this. Apple is being anti-consumer and anti-developer.

Really affecting my prospects of owning the new Apple Silicon laptop in the future if Apple is going to stick to this route. No sense of being a developer on a platform that is anti-developer.

And that, exactly, is how the free market is supposed to work. If you are free to go develop someplace else, then what’s the problem?

Exactly what cmaier said. They needed Apple until they did not. When they realized they could bypass the App Store they made the decision to violate their agreement. There was a right way and wrong way to do this, and Epic chose the horribly wrong path.

 

[Ethosik]

Seeing people being against Apple cut their share from 30% to 15% is insane to me. Who would protectic a multi billion dollar company that does tax evasion because you get turned on by grey aluminum. I'm flappergast.

I don't think anyone is here saying that. If enough developers protest while still following the rules, then yes lets lower the cost. But its only just Epic that is complaining now. 30% offers A LOT of stuff. Hosting, CDN, offering support between user and me. Handling refunds or disputes so I do not have to. Discoverability. So on.

People think its just host app - 30% please.

 

[Ethosik]

There is no both sides to this. Apple is being anti-consumer and anti-developer.

Really affecting my prospects of owning the new Apple Silicon laptop in the future if Apple is going to stick to this route. No sense of being a developer on a platform that is anti-developer.

Someone breaking the rules of an agreed Terms of Use and developer agreement now becomes being anti-developer?

 

[Apple Crusader]

Before you buy something at a retail store do you first check to see if you can purchase it directly from the manufacturer so they can make all the money on it? I could be wrong but I highly doubt you purchase all of your Apple products directly from Apple. It sounds to me that since you’re a developer your viewpoint is a little cloudy. Devs or manufacturers aren’t going to to lower their price point if we buy directly from them. So why does it really matter where we buy it from?

It's called choice and Free Market. It's not a hard concept to understand, but often you can buy something cheaper from the manufacturer, sometimes it's cheaper from a third party.

Apple is a monopoly on their platform, something MS got sued for and lost in the 90's because they bundled Internet Explorer with their operating system. They didn't force consumers to use it and there were other choices.

Apple does not allow the opportunity for choice and it is all artificially limited, making them a monopoly.

 

[Apple Crusader]

I have no idea what the complaining is about. 30%+ markup is standard in most industries. Nearly everyone knows that wine is marked up about 100% in restaurants. Is this anti-winemaker? The difference here is that the developer sets the retail price and Apple takes a cut. If the developer thinks his work is worth $5/app then sell it in the iOS store for $7.14. Apple also provides all of the infrastructure, payment processing, and the SDK. If a developer wants to avoid the 30%, they can easily do so by using their own payment system outside of the app. Amazon does this for Kindle. Netflix does this for their subscribers. Epic and Spotify could do that as well. But they want the ease of using the iOS platform for purchases without paying for it. And instead whine about the rules that they agreed to.

Apple forces the use of their whole platform or tells developers to pound sand. Apple does not provide anything except a mafia like tactic to get money for a product consumers already bought.

 

[cmaier]

Apple forces the use of their whole platform or tells developers to pound sand. Apple does not provide anything except a mafia like tactic to get money for a product consumers already bought.

that’s not how the mafia works.

 

[Apple Crusader]

16,766 reaction score says people do care about what I have to say, but thanks for the personal attack.

16,766 people out of how many?

 

[Bob Sanders]

Seeing people being against Apple cut their share from 30% to 15% is insane to me. Who would protectic a multi billion dollar company that does tax evasion because you get turned on by grey aluminum. I'm flappergast.

This is a thread about Epic Games' lawsuit. That lawsuit is asking to have the Epic Games Store in the App Store free of commission, not to knock 15% off the current commission.

 

[Apple Crusader]

You have no idea what kind of financial arrangement Apple has with Amazon. The problem is you and Epic who made a decision to develop on a platform with rules and now that Epic and possibly you have a platform to sell your games you want the rules to not apply to you. No one will miss you or Epic.

Yes, you're right!

Nobody out of the millions of people who have downloaded fortnight will miss Epic! The small majority of Apple Crusaders are the only opinion that is true and correct! Epic only made hundreds of millions of dollars because nobody cares.
/S

 

[pasamio]

Apple spends significantly less on R&D then other tech companies which makes the “we need 30% to pay for R&D” argument fall flat.

I found a Cult of Mac article that suggested it's spending looked "anemic compared to rivals". Apple spent $4.8 billion on research which is 8% of profits. It's comparison companies were Microsoft at $5.2 billion or 13.6% of revenue and Google/Alphabet at $6.2 billion or 15.9%. What that tells me is something I think we've all known for a while that Apple has healthier margins but it doesn't seem that out of line given how much more both Microsoft and Google do compared to Apple. Both competitors run an entire cloud platform with associated products and services with Microsoft having a significant server products business, the gaming division and a few other cloud services (LinkedIn). Google has an equivalent platform but doesn't have any desktop hardware and no server products not deployed from their cloud.

Given that Apple spends in the same ballpark as these companies in a sense to field less products (no search engine for example and a much more restricted cloud platform), it makes you think perhaps they've got enough people to do what they need to do? However the 30% doesn't cover the other two either as both spend less than that on R&D. That said, R&D is only a piece of the spending and depending on what people include and exclude will also be skewed.

Nobody really cares what cmaier has to say, Apple doesn’t have an App Store without the developers. And Apple is going to lose this. It’s not just EPIC that has a problem with this, multiple developers and the government now has a problem with it as well.

There just needs to be enough developers to write products that customers want to buy.

 

[cmaier]

I found a Cult of Mac article that suggested it's spending looked "anemic compared to rivals". Apple spent $4.8 billion on research which is 8% of profits. It's comparison companies were Microsoft at $5.2 billion or 13.6% of revenue and Google/Alphabet at $6.2 billion or 15.9%. What that tells me is something I think we've all known for a while that Apple has healthier margins but it doesn't seem that out of line given how much more both Microsoft and Google do compared to Apple. Both competitors run an entire cloud platform with associated products and services with Microsoft having a significant server products business, the gaming division and a few other cloud services (LinkedIn). Google has an equivalent platform but doesn't have any desktop hardware and no server products not deployed from their cloud.

Given that Apple spends in the same ballpark as these companies in a sense to field less products (no search engine for example and a much more restricted cloud platform), it makes you think perhaps they've got enough people to do what they need to do? However the 30% doesn't cover the other two either as both spend less than that on R&D. That said, R&D is only a piece of the spending and depending on what people include and exclude will also be skewed.



There just needs to be enough developers to write products that customers want to buy.

You are comparing as percent of revenue, but keep in mind that a very large percentage of apple revenue stems from hardware, not software, which means that their cost of goods sold is significantly higher than alphabet or Microsoft.

 

[Apple Crusader]

So basically when you buy something at the mall you should pay only to the manufacturer and not to the distrubutor ?
Are people become mad in 2020 ?

I don't only have to buy things at the mall, thus I have a choice to buy things usually directly from the manufacturer, or one of many distributors. Apple has a monopoly because they are the ONLY distributor for iOS apps.

 

[pasamio]

You are comparing as percent of revenue, but keep in mind that a very large percentage of apple revenue stems from hardware, not software, which means that their cost of goods sold is significantly higher than alphabet or Microsoft.

I was more aiming to figure out where the "spends less than others" came from and in reality it doesn't feel like it does for the amount of products on offer. I was more interested in the actual figure, a percentage of revenue can tank if you have a bad quarter or could be buoyant in top selling quarters (iPhone release quarter and Christmas) however I included the percentages for completeness of the original article but even those don't seem significantly less either. It's only behind Microsoft by $0.4 billion and $1.4 billion from Google's numbers with a much tighter product portfolio.

There are absolutely different costs for production, Apple run a significant retail store presence that Microsoft just shuttered and Google's never bothered with. Both of those vendors hardware platforms are much smaller though I suspect that have similar numbers of chip designers working on custom hardware for their cloud platforms. The cost structures are different but I would disagree with the assertion that is spends significantly less on R&D which was the OP's contention.

 

[Anox]

I remember back when people were clamoring for Apple to add an app store to their phone, and I was part of the noble resistance that thought "You mean anyone can write a native executable for the iPhone, and Apple has to go through and vet all this? What a waste of resources! What a security nightmare! How can I feel safe? Follow the rules, and write a web app! If Apple does this, I am LEAVING."

Thankfully I was able to change my mind! It was difficult at first, but I found it within myself to reconsider, and look at another perspective. Pretty cool I came around, because now we have all these options! I sure hope we can open just a little further and get a few more options. I'm excited for that.

At first this comment calmed me
What once was will repeat again and I felt kinda fine with the notion of what the future may brings

but then I saw that Russia and South Korea is also on with this subject and I remembered something someone told me
On how there is always people who are going to want to “knock the graders walls” of course that was said as why he does not want to be involved with Apple even though he liked them somewhat

this does not feel like a natural evolution it doesn’t feel like a structured change it does however feel like a forced one that challenges difference and potentially forbids
Diversity

30% aside, Android allows App Stores and yet epic does not have (to my knowledge) anything close to trying an App Store on there. They whine and blame EVERYONE and yet no one is obligated to want to do business with them yet they could have convinced them otherwise (I believe a common practice but I am not sure)

as for the 30% I was under the assumption that they already started the revolution by offering way less,I was under the impression that offering lower rates they would be the best place for developers yet their platform is buggy at best, and developers still find value in platforms that charge 30%,I really hope epic fails and learns to revolutionize humbly or at the very least quietly, I hope that people understand iPhone + iOS is one product and you have options so many options out there

from Purism to LG, Nokia to Motorola and now even Surface all make smartphones

there is no monopoly. There is a need of more operating systems mobile and desktop alike but no company is interested in making them because people don’t buy em
Knocking down Apple dismantling them fining them will not break the monopoly but create one same applies to google

 

[davidjytang]

Apple should decrease their app revenue cut from 30% to 15% to show how much they care about their developers.

If they were to show how much they care about devs, they would probably charge "as low as 50%".

 

[davidjytang]

Silly question. Has Epic stated what they feel is fair besides independent app stores? From what I understand Apple only charges a $99 fee for being a developer. Does this fre fairly compensate Apple for the time they spend developing the OS, APIs, etc? Maybe they should increase the fee based on developer size but then that could hurt indie developers? To me that fee is nothing compared to the amount of research and development app does for iOS on a year basis. Maybe 30% is too high but Epic also should be allowed to use the time and money Apple spends building the OS for nothing either.

Apple could charge by seat count of iOS developers. Small company pay less, large company pay more.

 

[UBS28]

Apple should allow Epic their own app store. Apple is not protecting the customers but protecting their free 30% cut without doing any work for it.

 

[UBS28]

Epic Games should be happy Apple is not introducing a tiered system like taxes are - the more you make, the higher the tax. Epic would probably end up paying 40 - 45%.

Apple should be lucky they have developers on their platform. The app selection is already quite terrible to begin with (my 12.9 iPad Pro is overkill for that reason) So loosing a big publisher like Epic is a loss to Apple.

 

[cmaier]

I was more aiming to figure out where the "spends less than others" came from and in reality it doesn't feel like it does for the amount of products on offer. I was more interested in the actual figure, a percentage of revenue can tank if you have a bad quarter or could be buoyant in top selling quarters (iPhone release quarter and Christmas) however I included the percentages for completeness of the original article but even those don't seem significantly less either. It's only behind Microsoft by $0.4 billion and $1.4 billion from Google's numbers with a much tighter product portfolio.

There are absolutely different costs for production, Apple run a significant retail store presence that Microsoft just shuttered and Google's never bothered with. Both of those vendors hardware platforms are much smaller though I suspect that have similar numbers of chip designers working on custom hardware for their cloud platforms. The cost structures are different but I would disagree with the assertion that is spends significantly less on R&D which was the OP's contention.

Got it. I agree. I think that, as a percentage of profit, apple‘s R&D is quite reasonable.

 

[Apple Crusader]

Apple should be lucky they have developers on their platform. The app selection is already quite terrible to begin with (my 12.9 iPad Pro is overkill for that reason) So loosing a big publisher like Epic is a loss to Apple.

Not to Apple Crusaders! The only things that matter for those people are Apple being right!