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

[mnsportsgeek]

This is the second time that I see Amazon mentioned as getting preferential treatment. How? AFAIK Apple differentiates between payments for physical goods and services and electronic ones. It allows for external payment mechanisms for the former, but not the latter. That's why you can buy stuff in the Amazon app, but not in their Kindle app.

One can debate whether 30% is 'fair' at this point in the iOS ecosystem's life, but I don't think Epic has a legal leg to stand on - they simply violated a contract. Some have made the argument that Apple frequently changes the contract with developers having no recourse to accept the new terms. If the changes are, indeed, more restrictive on developers, that might be a good avenue for Epic to pursue. But I'm not aware of any such changes - the only change I've heard about was to to the benefit of developers: the change from 30% to 15% Apple fee after one year of subscription.

The preferential treatment I was referring to is that it is widely believed that Amazon Prime Video only has a 15% Apple Tax which differs from “Apple’s Rules”. There were emails between Apple and Amazon that were made public where this deal was detailed.

My point is simply that if Apple wants to continue saying that they treat all developers equally, then they need to define a criteria that is transparent for all developers to achieve the 15% Apple Tax.

The criteria can be lofty, and maybe only a handful of developers will achieve it, but it still needs to be defined. I think it can be reasonably assumed that FortNite would hit whatever criteria they defined.

 

[mattopotamus]

A contract that Apple can, and often does, unilaterally adjust and modify as they see fit. That's not a contract. It's coercion — because developers cannot pull out anymore once investments have been made into an iOS App.

Apple has turned hostile towards developers and as a result, hostile towards consumers. I want choice. I want freedom. I want to decide what I can put on my phone. Not Apple.

I am not siding with Apple, but I know how this is going to play out if taken to court. Epic lost before it even began, and their troll video didn't help.

 

[tann]

Apple is anti consumer. They allow anticompetitive practices by letting Amazon to use their own payment processing but do not allow Epic to do so. This just means that customers have to pay higher prices for apps and developers have less resources to create better experiences.

Apple is anti developer. Disabling Epic access to Apple Dev Kit will hurt all developers making games and other apps on Apple products. The majority of all top triple A games on the App Store use Unreal Engine. I am a game developer and personally use Unreal Engine on my Mac (maybe only for another 10 days if Apple succeeds in banning Epic).

Another anti competitive practice Apple does is not allowing cloud streaming games with xCloud / Stadia but lets Netflix stream movies. Apple is stifling innovation in order to squeeze as much money from customers as possible.

This is not the Apple that I fell in love with. Epic is right, Apple has become rotten.

The amount of people disagreeing and not seeing how beyond crazy the situation is genuinely worries me. I for one don't like the practices Apple have shown in the past, and their unwillingness to evolve and adapt.

Apple love it because the biggest cash cow is IAPs from games, they will fight tooth and nail to keep the system as broken as it is.

 

[Wildkraut]

Apple gives away Photos, Pages, Numbers, Keynote, Garageband.

Does Epic give away free games from other studios?

LOL! Do you really think Apple gives away something?
It's all meticulously(one of Jony Ive fav...) calculated into the device sales.

 

[Rogifan]

Retail is 30% too. That number has been the standard for a very long time

When you say retail do you mean physical stores? Because I don’t think that’s applicable at all. I go To Walmart or Target and everything on the shelf costs something. Go into Apple’s App Store and many things are free.

 

[Abazigal]

Apple isn’t controlling the customer experience now for non-digital goods nor apps that are exempted like Netflix and Spotify. The question I‘d ask is once you download an app to your device is it still considered part of Apple’s store? I get if you’re in the App Store and you tap the $9.99 button you will pay for that app using your Apple ID and credit card on file (Apple’s IAP). But once the app is downloaded and you launch it are you still considered to be in Apple’s store? You’re obviously not for non-digital goods. Apple doesn’t seem to be concerned about physical goods not using their in-app purchase system.

I see it more as Apple making a distinction between apps that summon a physical product or service (such as food delivery, or ride sharing, or online shopping), vs apps that let you consume digital content via your device (eg: YouTube, Netflix, IAPs).

Physical goods tend to have variable costs (ie: the more you make, the higher costs you incur in making them), and so it makes sense that Apple doesn't levy a cut, because margins are already so slim. In contrast, digital goods and services are often associated with having zero or close-to-zero marginal costs. For a feature like an IAP in Fortnite, it makes no difference whether 1 person buys a dance or 1 million people do. The cost is a one-time cost paid upfront to the developer who coded those animations, and anything after that is pure profit.

It probably seems somewhat arbitrary to make this sort of distinction, but at least there seems to be some internal consistency here.

 

[mattopotamus]

The preferential treatment I was referring to is that it is widely believed that Amazon Prime Video only has a 15% Apple Tax which differs from “Apple’s Rules”. There were emails between Apple and Amazon that were made public where this deal was detailed.

My point is simply that if Apple wants to continue saying that they treat all developers equally, then they need to define a criteria that is transparent for all developers to achieve the 15% Apple Tax.

The criteria can be lofty, and maybe only a handful of developers will achieve it, but it still needs to be defined.

I completely agree with this. They shouldn't say everyone is treated equal, when they in fact are not. I do think rates should vary based on value a developer brings to the table. Amazon absolutely should get a cheaper rate, but they need to be transparent about it.

 

[kcslc]

There absolutely is. Look how many companies have been hacked. Apple, even if it's not their payment system, would be on the hook for it if it happened through their payment portal.

This is the stupidest thing I’ve read all day. Is Microsoft libel if you purchase something through Edge on windows 10 on a non Microsoft website? No.

 

[TiggrToo]

Were they all charging that before the App Store existed in 2008? Or are some of them charging that because that’s what Apple decided to charge?

All that is irrelevant.

 

[TheYayAreaLiving 🎗️]

give It up epic we live in apple’s world now.

 

[tann]

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%.

Actually industry norm would be the higher volume you do, the cheaper it gets.

See any provider of cloud resources, it gets cheaper per unit the more you buy.

 

[James_C]

Epic only takes a 12% cut from developers on their store plus they give away free games each week. I wish Apple would do that.

Apple does not charge for lots of stuff more productive than games - Numbers, Pages, Keynote, New OS Releases or if you want to focus on Games , Apple creates, funds and supports a platform that has thousands of free games on it.

 

[GizmoDVD]

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

Agreed!

Also - all retailers should also cut their profits by 50% as well to show how much they care about consumers.

 

[1144557]

I really don't get this way of thinking. If a developer wants to earn 20 cents per IAP they simply need to charge 30 cents. That's it.

This might affect end customers, but it's not affecting developers.

Agreed!

Also - all retailers should also cut their profits by 50% as well to show how much they care about consumers.

Exactly, if Epic REALLY cared about the customer they wouldnt be charging kids/teens $7.99 for a visual pack (clothing for their character etc).

Why not $5.99 and with Apple's 30% its only $7.79 instead of $9.99? (or the $7.99 Epic wants to charge taking 10% of that 30% too Such HONEST guys, but its for the consumer!!!)

If Epic was so righteous they wouldnt be scamming kids/teens for money for overpriced IAPs/microtransactions in the first place. These games arent targeted at adults spending their own cash.... Theyre built to prey on people with undeveloped minds and/or no self control. It is NOT an honest business model to begin with.

 

[macsimcon]

A contract that Apple can, and often does, unilaterally adjust and modify as they see fit. That's not a contract. It's coercion — because developers cannot pull out anymore once investments have been made into an iOS App.

Apple has turned hostile towards developers and as a result, hostile towards consumers. I want choice. I want freedom. I want to decide what I can put on my phone. Not Apple.

And when your actions lead to your data being compromised or lost, or your iOS device crashing, to whom will you turn for support? Apple. And so Apple will have to expend billions in development and support costs because some consumers wanted more choice on a phone. A PHONE! A device which consumers expect to work each and every time they use it.

I like my Mac wide open, so I can do whatever I want with it. But I like my iPhone as a walled garden. There are many, many apps on my iPhone that I need to be able to count on when I need them.

 

[Remy149]

I shouldn't have to. I should be able to use an iOS device and run the software and apps on it I want. There is no other acceptable position.

No you shouldn’t you knew you couldn’t run software outside the App Store when you bought an iOS device. If sideloading really was so important to you why wouldn’t you buy an android device which could have provided you with the option. Ironically epic initially wasn’t in the Play store but eventually caved because sideloading is so uncommon

 

[Janichsan]

With developer certificate revoked, Epic cannot get their software "notarized" to be able to be run on later versions of macOS. This is regardless of its presence or absence in the Mac App Store.

Notarisation is not necessary to be able to run an application. macOS might complain and you might need some extra clicks to run the app, but you still can run it.

 

[EvilEvil]

Apple does not charge for lots of stuff more productive than games - Numbers, Pages, Keynote, New OS Releases or if you want to focus on Games , Apple creates, funds and supports a platform that has thousands of free games on it.

Most of the free games are shovelware junk. Now with Apple Arcade, you see less and less free games. You can't even buy games a la carte from Apple Arcade. You're forced to subscribe to get them.

 

[BootLoxes]

When you say retail do you mean physical stores? Because I don’t think that’s applicable at all. I go To Walmart or Target and everything on the shelf costs something. Go into Apple’s App Store and many things are free.

Retail takes 30% from game sales. Unless it changed recently, thats been the standard for a very long time.

Also its common sense a physical store isnt giving things away for free so im not exactly sure what point you are trying to make there

 

[lpolarityl]

Apple needs to cut down their fees to about 5-15%.
30% is beyond all reason. It's especially bad for small devs and companies.

So the platform Apple provides (the millions of potential sales for your app/game) isn’t worth a 30% cut they charge? The hosting of your app, the store features to boost sales, etc., none of that is worth 30%?

Should it be 5% for a certain level of sales, or 10%? If you make 20K off sales should it then go to 30%? That creates a slippery slope right?

Or... how about we all know it is 30%, and we all know this before we submit our app/game to the store for approval, as we submit and agree to terms to host our app/game to reach millions of users and make millions of dollars.

The phrase “Bite the hand that feeds” couldn’t be more applicable than now. Epic is in the wrong and is trying to take a stand on grounds they have no right to stand for.

100% of all developers agree to the same terms, Epic has no case. They have nothing to stand for. I didn’t see them taking this stand years ago when the game launched? Billions of dollars later they all the sudden care?

Please.

I hope Fortnite is banned forever from the App Store and I hope the developer accounts stay banned as well. Fortnite is a terrible addicting game with gambling mechanics built right in with the battle pass, vbucks, etc.

I can’t stand these games that literally prey on people with no self control, I hope it stays banned.

 

[Ishayu]

Apple claiming they won't make an exception for Epic are being ridiculous. The apps were not updated other than Fortnite. If Apple deletes them, then they are acknowledging that they were playing special privileges beforehand in favour of Epic. If they do not delete them while still insisting they breached the EULA, then they are acknowledging that they are still playing special privileges.

They can't win that game. EPIC has thought this through very, very carefully.

The notion that this is about privacy is ridiculous. If they want to ban EPIC but keep Tencent with WeChat around, then they can absolutely go and 100% plough themselves on that statement. Usually, when it's about privacy, Apple will introduce various sandboxing technologies and warnings for the user.

The notion that PayPal is a privacy concern as compared to Apple is likewise ridiculous. PayPal is a very well known and safe broker that is cheaper, but also led to creating a little company called TESLA.

This is about payment processing fees and nothing else. Make no mistake about that.

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?

A court of law does not care about EULA's if another law enters the picture. EULA's have to conform to law.

For all the endless clickbait articles on this on the net, it really boils down to one thing.

Apple: "We're not making enough money."

Epic: "We're not making enough money."

Don't get caught up in all the phony talk of ethics, fairness, anti-competitive practices. It's just a case of two extremely wealthy tech companies whining about not making enough money.

In other news: Millions of Americans without jobs. Pandemic raging.

On the one hand people say that small companies can't fight the big ones.
On the other hand people say that big companies are becoming big monopolistic monoliths that hurt the consumer.
And yet people are also saying that big companies shouldn't fight big companies to protect themselves and smaller companies because that's immoral seeing as they're big themselves.

How is anybody supposed to win this farce?

Let EPIC try. If they fail, too bad. At least someone tried to break this non-sense down.

 

[Janichsan]

Were they all charging that before the App Store existed in 2008? Or are some of them charging that because that’s what Apple decided to charge? Anyway since when is Apple known for doing what everyone else is doing?

It's because of Apple. Before that, digital distribution platform took much higher shares, in some cases even more than 50%.

When Apple introduced their 70/30 split, they were lauded for taking only so little and developers were ecstatic.

 

[Rogifan]

I see it more as Apple making a distinction between apps that summon a physical product or service (such as food delivery, or ride sharing, or online shopping), vs apps that let you consume digital content via your device (eg: YouTube, Netflix, IAPs).

Physical goods tend to have variable costs (ie: the more you make, the higher costs you incur in making them), and so it makes sense that Apple doesn't levy a cut, because margins are already so slim. In contrast, digital goods and services are often associated with having zero or close-to-zero marginal costs. For a feature like an IAP in Fortnite, it makes no difference whether 1 person buys a dance or 1 million people do. The cost is a one-time cost paid upfront to the developer who coded those animations, and anything after that is pure profit.

It probably seems somewhat arbitrary to make this sort of distinction, but at least there seems to be some internal consistency here.

Sure which is why comparisons to physical stores make no sense. My point was around security which people throw around a lot. The fact is when you purchase physical goods via an app (or through the browser) you’re not using Apple’s IAP. I’m not aware of any major issue there. Heck Apple stores my credit card information so if I buy something on Etsy it will just auto fill all that information.

I think it’s disingenuous to defend the 30% cut on security grounds when it only applies to digital goods. I think it’s also tough to defend when so many apps are free and thus pay nothing. I posted a quote from Steve Jobs from 2008 where he said they didn’t expect the App Store to be a money maker. He said the value would be in making the iPhone more desirable. Obviously as pretty much everyone in the developed world who wants an iPhone has one Apple has had to shift their priorities because the revenue growth in hardware isn’t there anymore (you can only raise the price of the phone so much). And once you start raking in billions from IAP it’s hard to let go of that $$.

 

[DEMinSoCAL]

This is the first time I've waded into this discussion of the Apple-Epic standoff since it started. But I've been following along, and the responses by the pro-Epic crowd here have been borderline ridiculous, if not disingenuous.

You either haven't been "following along" very well or your bias towards Apple and against Epic is showing.

So Epic should get a free lunch by having their game app on the app store and receive all the profits for in-App digital purchases? That's the argument I'm reading around here, and it's asinine. That might fly in the free-wheeling PC environment, where gamers buy or build their own systems, and install Epic's game launcher to play Epic's games.

Again, you're not reading well. The only people making the claim that Epic wants a "free lunch" are those that support Apple. There should be CHOICE as to how a developer distributes their app or how the customer pays for in-app purchases, and there isn't.

You want to play in Apple's or Google's environments, which they built and they maintain, you play by their rules. It's a simple concept, yet it seems many people have difficulty with it.

So you can read and remember some things, as this argument very popular by pro-Apple people but is really getting tired. There are laws that say you can't do whatever you want when it comes to commerce. There are laws against monopolies and against over-charging, etc.

What if Apple said the new fee is now 50%? Then next year said 70%? It is still "their environment, their rules"?

 

[Christian 5G]

I think that customers should be given a choice on whether they want to pay through App Store or directly. I’m sure there is a spiral of things that follow, but that is just my opinion.