Apple Shares Praise From Developers Happy With 15% App Store Fee Cut

[Abazigal]

Epic would need to raise their rate if they were to match Apple's 15 percent rate. Epic only charges 12 percent.

From their FAQ:

Publish Apps, Games and Software on the Epic Games Store.

Learn how to publish apps, games and software on the Epic Games Store to access over 100M players on PC and Mac.

www.epicgames.com

What’s the catch? Is this 88% revenue share a special introductory rate?

There is no catch; the 88% share to the developer is the permanent rate. Epic’s 12% share covers the operating costs of the store and makes us a profit.

The catch is that Apple has aggregated the best spenders in the industry thanks to the iPhone. This means that iOS users in general tend to have more spending power and are more amenable to purchasing apps.

This is the value that Apple brings. They help grow the pie and increase the revenue that developers would otherwise earn, and I dare say that developers are still better off even after the 30% cut.

Epic brings no such utility to the table, and their App Store has only bare bones functionality. It’s easy to charge less when you are doing and providing less for the money.

That’s the catch.

 

[Unregistered 4U]

I bet it wasn’t hard to find Developers who were happy with the new 15% fee.

It wasn’t hard to find Developers who were happy with the 30% fee either. The vast majority have always been quietly making money.

 

[truthertech]

"On January 1, 2021, all developers who earn less than $1 million from the App Store will pay a 15 percent commission to Apple instead of the standard 30 percent"

this is a very curious move- when Apple was asked in open court they say the 30% fee was a) necessary to run the store and b) the fee is what everyone else is changing - now Apple seems ok going down to 15% - I am sure Epic its going back to court and say why I am not getting that fee? what work is Apple is doing differently that cost more to them?

Except Apple never said that it was running the App Store at cost. Nor should they. Any more than they should LOL, they proudly report that they make billions from the App Store.

 

[mrjayviper]

Sweeny can go jump in a lake. Preferably a frozen one. And preferably jumping from a great height. Any shred of merit in his case has been completely negated by their idiotic, over the top presentation, that's been extremely misleading (according to judges).

do you have a link to this? I want to read it. thank you

 

[MEJHarrison]

Does Google have a free account for Android tinkerers?

Based on the little I've played with it, yes. You can develop all you like, install apps without hassle, don't need to worry about them expiring or how many you've installed in the past 7 days. I didn't do as much on their side, but I recall it being wide open.

If I want to write an iOS app that will only ever be installed on my phone, it's crazy that I not only have to pay $99, but that I have to pay that every year. Or re-install the app every week. I've had issues going too quickly through a training course because I hit some weekly limit one time about the number of new apps created. It's absurd.

Maybe I'm in some super minority. I just want to play around, write some code when I get bored, keep up with the latest Swift/SwiftUI features, have fun with my devices. If the day comes at work that we decide to move into mobile apps, I want to be ready. I'm not looking to put stuff on the store. If the store was my goal, I'd just pay the money.

 

[kidaje]

Well, lets see if Google, Microsoft and the rest do as Apple does

 

[Maconplasma]

Based on the little I've played with it, yes. You can develop all you like, install apps without hassle, don't need to worry about them expiring or how many you've installed in the past 7 days. I didn't do as much on their side, but I recall it being wide open.

If I want to write an iOS app that will only ever be installed on my phone, it's crazy that I not only have to pay $99, but that I have to pay that every year. Or re-install the app every week. I've had issues going too quickly through a training course because I hit some weekly limit one time about the number of new apps created. It's absurd.

Maybe I'm in some super minority. I just want to play around, write some code when I get bored, keep up with the latest Swift/SwiftUI features, have fun with my devices. If the day comes at work that we decide to move into mobile apps, I want to be ready. I'm not looking to put stuff on the store. If the store was my goal, I'd just pay the money.

Yes, you are in the minority. $99/yr isn't bad for all the tools Apple offers. But I would say you should just develop for Android so you can have the tools for free. Some companies just don't want their resources wasted on tinkerers that may not ever create an app . It's understandable.

 

[Seend1983]

Spotify said that Apple's fee change demonstrates that "App Store policies are arbitrary and capricious," while Epic Games CEO Tim Sweeney said that Apple is "gerrymandering the community with a patchwork of special deals" with the program.

What rules aren't arbitrary? Let's pop open Spotify's Terms of Service and we'll take a look at how arbitrary everything is. Spotify paying artists less than Apple Music is arbitrary. Spotify pay artists the least of all streaming services.

As for Tim, he's pissed that these patchwork of special deals doesn't apply to him and he's left standing out in the rain. He's pissed that his main argument (standing up for the small guys) is now out the window after Apple halved the commission rate for devs making under $1 million (Apple commission is now progressive, like our tax system). He's pissed that his gamble seems to have failed and now he's stuck in court for the foreseable future while Fortnite remains off the App Store. That's a lot of money lost for this greedy pig.

 

[SDJim]

This is a genius move by them. Only cutting to 15% for small developers. Essentially now it is just large corporates like Epic vs Apple, which is a morally much harder case who to side with in the public eye, alleviating pressure from them regarding regulatory intervention.

Part of why so many people sided with Epic was not because they liked Epic, but because of the feeling like Apple was nickle and dim-ing even small developer who just want to make a living.

Meanwhile, they are not losing that much revenue.

The real irony to me is that the reason that the large companies are so pissed is that they don't need all of the support Apple gives because they have such deep pockets (they could build their own dev tools, pay for marketing campaigns, build distribution channels, etc.). Small devs are the ones getting the most out of their 30%, but now they don't have to shoulder so much weight! The app store's promotion of innovation continues!

 

[macduke]

Makes sense to help smaller developers get off the ground. I know this has me more seriously considering heading down this career path with my own business, not reliant on an employer. Definitely something to consider. I was thinking about going back to school for this a year ago, but I had a situation going on in my life which prevented it, and then the pandemic hit and I was without a job for a while which put the brakes on it for this year. Need to take some classes and continue saving for startup costs anyway so I can go in 100%. Might be a few more years. I love designing and do front end and a little back end web development, and know enough to update an app with small fixes like layout changes or swapping out APIs, so I just need to focus on the Swift programming stuff more. Back when I did a little app stuff it was Objective C. Swift looks easy enough, though.

 

[hans1972]

Curious now what the justification will be to keep the 30% for larger companies? I thought the argument was that it was necessary to cover the costs of hosting/distributing/curating the app store content. How is that suddenly cheaper for smaller developers only?

It may seem like a smart move by Apple but I can see it backfire spectacularly with regulators.

Apple legal arguments has been that they provide value to developers and customers. They have taken risks and used resources to create an app environment with a store, developer tools and support and a huge set of paying customers.

Apple's argument is that they should be able to profit from this value they provide.

 

[hans1972]

Earn less than $1,000,000.00? Pay 15 percent commission.

Earn $1,000,000.00 or $1,000,000.01? Pay 30 percent commission.


Tim Cook was lying to Congress when he told Representative Henry Johnson, "We treat every developer the same."

This is clearly not the case when developers are paying different commission rates.

Yes, but this is being implemented in 2021, not when Cook testified for Congress in 2020.

Now Cook and say we treat smaller developers nicer.

 

[mytdave]

Oh nice, how very Socialist of you. The indoctrination of the past several decades has apparently not been lost on Apple. App store fees are a percentage. Therefore the percentage should be the same for everyone. As a percentage, developers making more than $1M are still "paying" more in commission than those making less than $1M. What Apple's done here is create a new class structure.

LOL, in a few years when they realize the stupidity of this move, they'll lower the App store fee to 15% for everyone, and then you'll hear the unwashed masses bitch about Apple "giving a tax cut to the wealthy".

 

[MEJHarrison]

Yes, you are in the minority. $99/yr isn't bad for all the tools Apple offers.

Agreed on both points.

But I would say you should just develop for Android so you can have the tools for free.

Completely disagree. Android? When did I ever say I wanted Android? Why are you throwing that in there? I want to stay current with Apple stuff, going Android doesn't do a lot to further that cause. That comment completely misses the point.

Some companies just don't want their resources wasted on tinkerers that may not ever create an app . It's understandable.

Then they should go back to the old days of not giving away Xcode for free. At least I had a reason to pay the $99 back then. Now you get it for free, but with tons of strings attached.

Anyway, this is way off topic.

 

[timborama]

Good or bad, this will have little impact on Apples bottom line or th amount they pay out. 0.01% of the apps account for 99.9% of app revenues.

 

[Ethosik]

I think COVID had some impact in this decision. Small Businesses are more likely to fail during these times. I know several that have closed shop already sadly

 

[ValueArb]

Good or bad, this will have little impact on Apples bottom line or th amount they pay out. 0.01% of the apps account for 99.9% of app revenues.

Wall Street estimates are it will cost Apple around $500M a year in foregone profits. Small devs are around 5-10% of revenues, which is $2.5B to $5B a year in total revenues, so 15% is somewhere in the mid $300M up to $700M range. It's not huge for Apple but definitely impacts their earnings per share.

So us developers should not just thank Time Cook, but Apple shareholders as well.

 

[HiVolt]

It's a good start, but IAP are still 30% for the smaller devs. So Apple still rakes there.

 

[ValueArb]

Agreed on both points.



Completely disagree. Android? When did I ever say I wanted Android? Why are you throwing that in there? I want to stay current with Apple stuff, going Android doesn't do a lot to further that cause. That comment completely misses the point.



Then they should go back to the old days of not giving away Xcode for free. At least I had a reason to pay the $99 back then. Now you get it for free, but with tons of strings attached.

Anyway, this is way off topic.

When I first started out as a Mac developer, developer membership was around $1,000 a year. If you didn't join the program you could buy developer tools like Turbo Pascal for $99 but your support options for Mac development questions were non-existent.

We sold as much software direct as possible using direct mail, because we only received at most 50% of sales from mail order and stores. Actually we probably made closer to 30% given we had to pay Ingram MicroD for promotional help, Egghead for end caps, and other marketing promotions. Selling direct meant paying thousands of dollars for lists, or building lists slowly from anyone who mailed us asking to get on it, and spending tens of thousands to send out expensive mailers that were financial disasters if they didn't get at least a 3-5% response rate.

And it cost a minimum $20,000 to ship a new product or update, between box design/printing, disk/cd/label duplication, manual writing, layout & printing, etc. And no one would ever know about our apps unless we bought ads in MacWorld and other magazines for up to $20,000 per page. To sell in Europe and Asia we had to give 50-70% to international distributors and spend up to $20,000 per language to localize the apps, boxes and manuals.

Now I can write an app in my pajamas, upload it to the App Store, and have it available worldwide within a day or two. Then with a couple clicks it's advertised to hundreds of millions potential customers, who spend more than $50B a year on the App Store (nearly double the sales of Google Play, which has nearly 6 times more visitors). Thats why I never complained about Apple's 30%, they make money and I make money, it's all good.

At 15% it's the greatest deal on the planet.

 

[Kierkegaarden]

Curious now what the justification will be to keep the 30% for larger companies? I thought the argument was that it was necessary to cover the costs of hosting/distributing/curating the app store content. How is that suddenly cheaper for smaller developers only?

It may seem like a smart move by Apple but I can see it backfire spectacularly with regulators.

Why does the state and federal government tax progressively? We know the reason. That’s essentially what this is.

 

[GeoSciGuy]

This commission cut comes right at the same time Apple is releasing their new M1 Macs.

Apple is incentivizing new developers to enter the App Store market who were previously on the fence. Now, those developers will have to purchase a Mac in order to develop apps for the iPhone and iPad.

With the new M1 chips designed in house, Apple no longer has to give intel a cut, right at the time when a bunch of new developers are buying Macs.

Pretty smart move. Incentivize developing apps which incentivizes Mac sales.

 

[Maconplasma]

Agreed on both points.



Completely disagree. Android? When did I ever say I wanted Android? Why are you throwing that in there? I want to stay current with Apple stuff, going Android doesn't do a lot to further that cause. That comment completely misses the point.

Actually I'm not missing the point. Actually you are. I mentioned Android because you wanted free tools. That's why I asked if Google offered free tools. You can tinker and play around and perhaps create an app for future coding on iOS. I think you took as me saying, "If you don't like Apple's way then leave and go to Android". But the truth is you're not seeing the benefit that Apple is offering for a meezly $99/year. Sometimes you have to look at things from a business standpoint, not a consumer standpoint. If you were running a company I doubt highly that you would want to create free tools for tinkers to play around with when they are bored with absolutely no chance that the tinkerer will even create an app for all parties to make money. On that respect I don't blame Apple.

 

[GermanSuplex]

Epic, please quit your whining. Without platforms like the App Store, would you have been as massive as you are in the first place?

 

[teak421]

Thanks to Epic that the developers will be able to keep more...they are the creatives, not Apple.

 

[teak421]

Anyone one else feel like Apple did this just to rub it in Epic's face?

This wouldn't have happened if Epic didn't sue them. The small developer wins here..!