Epic Games Pays Apple $6 Million as Ordered by Court

[Nuno Lopes]

I did not argue that App Store is simply a different mechanism to charge royalties, it’s quite different

Well that seams to be what people are arguing as a counter measure to the ruling. Charging 30% in royalties for sales done through in app links

I’ve heard that Apple in court inclusively said the the value was as payment for IP no so much service.

Not saying you argued that … but that seams to be the argument around here.

PS: In the market royalties of this kind are usually applied to every one. There might be volume discounts, say if your revenue (unit sales) are over a certain value. But its relatively normal.

Now to your point of small pay less with this model. Do you consider a business with a million dollar revenue is not small? Meanwhile offering it for free to companies like Facebook? Hummm … interesting.

This Good Samaritan point of view of third part devs disgusts me. Is so dumb that disgusts me.

Now … I agree with you. How much money Apple makes it’s irrelevant.

 

[hot-gril]

Do you have the same logic for the supermarkets adding their own standard markup for the carton of milk you buy? Or landlords charging similar rent in surrounding areas? The whole world is a cartel for you? I wonder what laws and governments are doing it about it.

If it were the exact same markup every time, yes, I'd be suspicious of collusion. If there were a written rule somewhere, I'd know there's collusion. That's not how it usually is, though.

 

[Velli]

Don't forget the whole reason that this happened is 30% cut is an obscenely large percentage. Apple were greedy and didn't scale down the percentage when the numbers started getting big.

I fundamentally disagree that they should. For IAP’s, I also disagree that the percentage is obscenely large (and I believe so did the court). For subscriptions, definitely.

I have seen this argument before, but I see very few companies lowering prices as the company gets bigger. I see a lot of the opposite though, either because you started low to penetrate the market, or because the company became bloated. I don’t think there is an inherent rule that a company should set its price based on company size.

 

[Da_Hood]

I fundamentally disagree that they should. For IAP’s, I also disagree that the percentage is obscenely large (and I believe so did the court). For subscriptions, definitely.

I have seen this argument before, but I see very few companies lowering prices as the company gets bigger. I see a lot of the opposite though, either because you started low to penetrate the market, or because the company became bloated. I don’t think there is an inherent rule that a company should set its price based on company size.

It is obscenely large when compared to bricks and mortar vendor margins for Apple‘s own products
Again the 30% is leftover from iTunes Store. Apple was able to extort the labels due to there inertia in regards to digital, and no one cared because the labels had been shaking down artists for ever.
Broad band penetration forced the movie studios to follow suit. But they quickly found a way to relegate Apple to the sidelines (Ultraviolet etc.). Is it Apples choice to only offer in-house on AppleTV+?

 

[Wildkraut]

"Though Apple removed Fortnite from the App Store shortly after Epic violated the in-app purchase rules, Epic Games was still able to collect payment from customers that had already installed the app and were actively using it. During the time period that the app was available prior to a Fortnite update that made it unusable, Fortnite made $12,167,719."

Fortnite made $12 million in less than 3 months on the App Store with just the people who loaded the questionable upgrade? And that's after the game was already dying down. How much did they potentially lose while being off the App Store?

7% revenue

 

[ruka.snow]

It is obscenely large when compared to bricks and mortar vendor margins for Apple‘s own products
Again the 30% is leftover from iTunes Store. Apple was able to extort the labels due to there inertia in regards to digital, and no one cared because the labels had been shaking down artists for ever.
Broad band penetration forced the movie studios to follow suit. But they quickly found a way to relegate Apple to the sidelines (Ultraviolet etc.). Is it Apples choice to only offer in-house on AppleTV+?

Publishers charged over 60% pre Steam and pre AppStore. 30% was and still is a bargain, never before has so much of the profit actually came to me instead of my ex publisher and the store. To see more than 20% of the profits of a game was game changing when Steam came out and then the AppStore gave us the same deal on mobile. I don’t know what industry you are in, but clearly you have never been a developer.

 

[Velli]

It is obscenely large when compared to bricks and mortar vendor margins for Apple‘s own products
Again the 30% is leftover from iTunes Store. Apple was able to extort the labels due to there inertia in regards to digital, and no one cared because the labels had been shaking down artists for ever.
Broad band penetration forced the movie studios to follow suit. But they quickly found a way to relegate Apple to the sidelines (Ultraviolet etc.). Is it Apples choice to only offer in-house on AppleTV+?

So, it’s obscenely large when you compare with a completely different business model in a completely different segment with a completely different unit price. Got it.

 

[Grade]

After spending nearly 100 euros in in-app purchased in Angry Birds 2, when the game was just released. When I saw the build I genuily think my heart skip a beat. Since I vow to never again and I avoid apps that are free and have in-app purchases, except for streaming services or cloud base apps like Bear or Evernote.

As for Epic, never played their games and since I read this news about this, I never will.

Stay safe.

 

[djgamble]

FWIW the reporting elsewhere is along the lines that it wasn't as 1-sides as MR would have you believe, Apple is going to have to change its policy to allow links to 3rd party purchases and Apple's stock's gone down more than 3 per cent (hint: that's more than $6 million)

Apple can no longer force developers to use in-app purchasing, judge rules in Epic Games case

The trial took place in Oakland, California, in May, and included both company CEOs testifying in open court.

www.cnbc.com

Apple can no longer force developers to use in-app purchasing, judge rules in Epic Games case​

> Judge Yvonne Gonzalez Rogers handed down the decision in the closely watched trial, and issued an injunctionthat said Apple will no longer be allowed to prohibit developers from providing links or other communications that direct users away from Apple in-app purchasing. Apple typically takes a 15% to 30% cut of gross sales.

> The injunction addresses a longstanding developer complaint and raises the possibility that developers could direct their users to their website to subscribe to or purchase digital content, hurting Apple’s App Store sales, which grossed an estimated $64 billion in 2020.

> Apple stock dropped more than 3% in trading Friday.

> The decision concludes the first part of the battle between the two companies over Apple’s App Store policies and whether they stifle competition. Apple won on nine of 10 counts but was found to engage in anticompetitive conduct under California law, and will be forced to change its App Store policies and loosen its grip over in-app purchases. The injunction will come into effect in December.

> “The Court concludes that Apple’s anti-steering provisions hide critical information from consumers and illegally stifle consumer choice,” Rogers wrote. “When coupled with Apple’s incipient antitrust violations, these anti-steering provisions are anticompetitive and a nationwide remedy to eliminate those provisions is warranted.”

> However, Rogers said Apple was not a monopolist and “success is not illegal.”

...

 

[Da_Hood]

After spending nearly 100 euros in in-app purchased in Angry Birds 2, when the game was just released. When I saw the build I genuily think my heart skip a beat. Since I vow to never again and I avoid apps that are free and have in-app purchases, except for streaming services or cloud base apps like Bear or Evernote.

As for Epic, never played their games and since I read this news about this, I never will.

Stay safe.

A friend on PlayStation used to drop over AUD120 every season on Fortnite just to wear the level 100 skin on day one of the season. He would have unlocked eventually, but he didnt’t care. He was on welfare too, so it was real money to him. I think close to 500 a year subscription to play free game LOL

 

[jakeenzo]

So not only did Epic have to pay Apple their share, they also lost money in legal fees. Well done Epic, you played yourself 😂

 

[Da_Hood]

So, it’s obscenely large when you compare with a completely different business model in a completely different segment with a completely different unit price. Got it.

You sure, it don’t seem like you got it.

 

[Captain Trips]

Apple should just turn round and donate that 6 mil to charity.

Even better, donate the award money from Epic to small developers.

Charity is an awesome idea, though.

 

[Da_Hood]

I don’t know what industry you are in, but clearly you have never been a developer.

Aerospace, F35 laughs at your 60%

 

[grandM]

😂

 

[darkpaw]

I haven't read all the comments (busy), but I can see a few ways of this playing out:

1. Things carry on as they are. The smaller developers who can't afford the external infrastructure to enable in-app purchases (IAP) outside of the App Store will continue to sell as they do on the App Store.

2. Apple allow IAP externally to the App Store. A game that used to be free to download, with functionality enabled via IAP, will continue to be free on the App Store and functionality will be unlocked via an externally-purchased IAP. Apple gets nothing but the developer fee (which covers an unlimited number of games and apps for that developer). The developer gets all the money (minus whatever their payment processing fee is). Apple's income falls, so they are forced to either: a) raise the annual developer fee to cover the costs of hosting & reviewing apps, and the bandwidth for downloads; or b) they charge per download.

3. Someone will create an external store that allows you to buy IAP for apps and games. That person/company sells the IAPs and charges a percentage on each sale. Developers will be fine with that - even though this is exactly what Apple is doing - and none will realise the hypocrisy of their actions.

 

[Jamie0003]

Like Apple's rules or not, Epic had a contract in place with Apple, and they purposefully broke that contract to force Apple into court. They added an in-game payment system *first* and then waited till they got kicked for blatantly violating their contract.

Apple's never taken 100% of the profits of any company's revenue on the App Store.

Now, Apple's rates might be bad, and not allowing companies to use out-of-app purchasing systems might be bad. But Epic joined the App Store in full agreement to Apple's terms, they made millions and millions (probably hundreds of millions) of dollars in Apple's store. Then when they decided they didn't want to pay the fees for millions and millions more, they broke their contract.

I'm not sure how you get to "...we'll put Fortnite back in the App Store as soon as we can take 100% of the profits" out of that?

There are over 1 BILLION active iPhones in the world. That means that Apple's 30 percent fee gets Epic access to 1 BILLION customers.

They're perfectly welcome to go build their own OS, their own devices, their own App Store, and their own payment system. Instead they agreed to use Apple's, on Apple's terms. And they made a huge amount of money as a result of that decision.

Did you read the original post? They won’t be putting fortnite back on the AppStore until they can use their own payment system and bypass apples 30% fee. They didn’t get the result they wanted, and so refuse to put it back, Apple had every right to ban them yet they continue to behave like children, alienating themselves as well as their players.

 

[Da_Hood]

Publishers charged over 60% pre Steam and pre AppStore. 30% was and still is a bargain, never before has so much of the profit actually came to me instead of my ex publisher and the store. To see more than 20% of the profits of a game was game changing when Steam came out and then the AppStore gave us the same deal on mobile. I don’t know what industry you are in, but clearly you have never been a developer.

Not arguing against 30% per app. But 30% on IAP or subscription is douchie.

 

[Nuno Lopes]

Stuff this. When Apple, Google and MS charges them 50% or more because they have nowhere else to go reach their customers on mobile devices GL. Simply because $gating$ installing and updating apps became the norm on people’s devices. Wait until this reach the PC and macOS to the consumer. And than they will have to price their products above anything that either Google or Apple (?Microsoft?)can provide … and GL.

The same devs that defend Apple micromanaging payments down to streaming, remote lessons …. than go to GitHub to get their frameworks et al. Dumb, really dumb. But I guess most people here aren’t really devs : enterpreuneurs but shareholders and gadget lovers.

The tone of the market is changing. See you dev guys in 10 years … you better buy stock because B2C devs business will be going nowhere but free aka to Apple and co.

PS: Whose to say that Apple will not put constraints on Safari using all and any of the same arguments. Safari runs on iOS, it’s their tech.

PS: I used to use Good Notes and Notability … now just use Notes. Used to use Things … now just use Reminders.

PS: Photo apps … wait until Apple develops presets and all that jazz.

PS: Shazam was assimilated

PS: Tiles … gone …

PS: The survivors, Netflix, Spotify why multi platform … get the picture?

 

[cardfan]

Use the same argument with your landlord. Tell your landlord you shouldn’t pay a dime for rent because you spend most of your day at work. Tell him he benefits from having you around and his cost of maintaining the apartment is an irrelevant argument. Make sure he understands your point by clearly stating you believe in paying for something only if it’s convenient for you. Let us know how that conversation goes.

That makes no sense. Lol

 

[macrumorsuser66]

I sense most of you are angry because you don't get to play your game on an Apple device? What percentage of you think 30 percent is fair? 30 percent sounds excessive and greedy, particularly if you are a small time developer. I sell things, part time, on eBay. Thankfully eBay doesn't (yet) charge 30 percent to use its platform.

 

[Velli]

You sure, it don’t seem like you got it.

Oh, I get what your point is, I just think it’s BS.

 

[Nuno Lopes]

I sell things, part time, on eBay. Thankfully eBay doesn't (yet) charge 30 percent to use its platform.

They would if they had your customers locked in through their devices hand cuffed to their service. They would than talk about security and privacy against competitors … (well one competitor or so). Whose to say that Apple cannot tax the transaction anyway … it only does so at the moment for digital goods … but entirely at their discretion.

This discussion is too focused on Apple. The actual threat is the network moving from Net Neutral to non Net Neutral by gating devices end-points.

 

[Velli]

I sense most of you are angry because you don't get to play your game on an Apple device? What percentage of you think 30 percent is fair? 30 percent sounds excessive and greedy, particularly if you are a small time developer. I sell things, part time, on eBay. Thankfully eBay doesn't (yet) charge 30 percent to use its platform.

1: If you are actually a small time developer, and not DHH pretending to be one, you only pay 15%.

2: Personally, I find a big difference in 30% on subscriptions, 30% on cost of an app, and 30% for IAP. To me it sounds like most are angry at 30% because it sounds like a big number. Comparing with a different business model does not help.

 

[cardfan]

Do you realise that one outcome of killing the app store business model coukd very well be to set a license fee based on company revenue? This is how licensing works in many other businesses. The fact that you will never pay fees for your app should make you HAPPY about the current business model. You are getting a free ride.

Like I said it doesn’t bother me. I can see why it bothers epic and others though.

Btw I’ve never considered this an App Store. It’s an app portal. An app installer app. It’s the only way to install 3rd party apps.

If we didn’t have to use it, we wouldn’t. And hopefully one day apple will be forced to offer other installing methods.