Epic Games Setting Up Webshops for iOS Developers to Offer Users Out-of-App Purchases

[surferfb]

No, they aren’t giving the phones away for free, but I bet the cost of how much they sell the phones are determined by how much they are making off the store as well.

You could argue that currently Apple is using heavy in-app spenders to subsidize the cost of the iPhone for "normal" users who don't buy a lot of apps. If that's no longer feasible, then the price of everyone's iPhone goes up.

I suspect not enough developers/users will take advantage of this for that to matter, but it is a definite possibility. The idea that allowing this is just magically going to result in all positives and the only negatives are going to be born by Apple (and they already make enough money, so who cares!) is not going to survive contact with reality. The only question is whether people will make the connection (spoiler alert: they won't).

 

[whelmedjedi]

Pff. I’m tired of seeing this epic games cries all the time. Just get the hell out of apple ecosystem. We dont want you. We dont need you.

 

[bg1419]

Tim Sweeny is such a prick. Would it be legal for Apple to just refuse to do any business with them on the grounds of “we don’t like you?” Seems like that would be allowed in a free market.

 

[surferfb]

You're "using Apple IP" anytime you use the iPhone at all.

Should they be collecting a financial cut of anything we do on it?

In the web browser too?

Maybe we should get the phone for free if they are going to take a cut of everything going through it?

The line has to be drawn somewhere. I happen to think that the line Apple drew is reasonable, even if I'd personally prefer they relax (I'd like to be able to buy Kindle books via an app, for example, but iOS is Apple's property and I think they should get to set the rules around it barring a very good reason, which IMO hasn't been met).

To answer your question directly, as far as I am concerned, if Apple wanted to try to take a cut of everything going through the web browser via an iPhone they should absolutely be allowed to do that. It would be a massive blunder of epic proportions (pun intended) and I suspect it would result in several executives being fired and a massive loss of marketshare, but they're welcome to try if they want. I'm not a shareholder, won't bother me at all, and they're not a monopoly or critical infrastructure.

It's clear most people who post on MacRumors disagree vehemently with that, but it's my opinion. Luckily for the majority, it's clear that regulators and judges don't agree with me

 

[koelsh]

Walmart's intellectual property isn't used on any of the products that Nintendo, Sony, Microsoft, Apple sell. If Walmart's IP was required to make the Switch 2 function, then yes, Walmart would be within its rights to ask for payment for use of that IP.

I don't think your counter argument carries the weight you think it does. Especially for all of the apps already on the App Store that don't charge anything.

For that matter apps like Point of Sale systems that are free in the store yet require a license purchased elsewhere to get past the login screen. Or apps like Netflix, Hulu, Paramount, and Max that require subscription purchased elsewhere to get past the login screen. Or apps like Audible that require an account made elsewhere to get past the login screen and to purchase books. Or, or, or.

 

[turbineseaplane]

To answer your question directly, as far as I am concerned, if Apple wanted to try to take a cut of everything going through the web browser via an iPhone they should absolutely be allowed to do that. It would be a massive blunder of epic proportions (pun intended) and I suspect it would result in several executives being fired, but they're welcome to try if they want. I'm not a shareholder, won't bother me at all

That would really be something to watch

 

[d-klumpp]

This ruling is about giving developers more freedom, encouraging competition, and giving consumers more choice. Apple still benefits from hosting the app on the App Store, but it shouldn’t control how every dollar flows after that.

As a non-developer, developers naively assume that typical consumers will seek out them and their non-Apple payment schemes with uncertain security. Most of us have established an equilibrium with apps and download new apps infrequently. My Top-5 most-used, non-Apple apps haven't changed in years.

 

[turbineseaplane]

As a non-developer, developers naively assume that typical consumers will seek out them and their non-Apple payment schemes with uncertain security. Most of us have established an equilibrium with apps and download new apps infrequently. My Top-5 most-used, non-Apple apps haven't changed in years.

I just think it boils down to this really only being a "thing" for a few categories like games and various forms of en vogue content consumption.

Like you, it sounds like, I'm also not doing much of any of that on my iPhone so it's largely a topic that passes me by.

 

[turbineseaplane]

Personally, I really would like 3rd party app stores to be a thing worldwide, as there are some use cases that I think could be specialized in far better than Apple is doing.

"Games for kids" in particular.

A highly curated and more kid/safety/good (parent preferred) messaging version of Apple Arcade essentially.

I think there are a lot of niches like that out there.

 

[0rangeSwan]

So EPIC can charge them 30% 🤣

More like epic can steal their data.

 

[bcortens]

Exactly. Are the developers benefitting from the APIs, SWIFT, and other frameworks that Apple has created to make development accessible on iOS? As Apple makes the platform a place where developers can innovate and have success, why should Apple be cut out of providing the platform, as well as the tools.

How much does Apple benefit from having third party devs? Should Apple Pay out 15% of iPhone revenue to third party devs because without third party devs they would sell half the number of iPhones they do today?

Too many commentators don't understand that the iPhone is not just valuable on its own but that the network effects of having third party devs make the iPhone more desirable. It is a symbiotic relationship in which both benefit but Apple (and its fans) seem to think that it is a one way relationship where Apple is being ripped off. Apple doesn't create the APIs because they are benevolent and devs should be grateful, they build them because having great APIs attracts the best devs which attract the best customers which sell more iPhones.


I dare Apple to cut off all third party app support for iOS and see how long they remain competitive with Android in the sales department.

 

[turbineseaplane]

Great post @bcortens

And just to tag onto that, the power dynamic between Apple (having a wildly outsized amount of power and leverage) and Devs (having relatively little) is specifically why we have jurisdictions intervening to try to make things fairer.

 

[0rangeSwan]

While I applaud what this means for other developers there's no chance I'm giving payment details to Epic.

Exactly and any developer that pulls this crap can go **** themselves with a cactus.

 

[bcortens]

That’s right. You take away the 3d party apps away from IOS and iPhone and it won’t do well. But if Apple also can’t make a business out of giving things away for free. So if the revenue dies from selling 3d party apps because they they are not allowed to collect revenue from it, Apple will eventually die unless they come up with something else they can make money from. A company cannot give things out for free and survive. Period.

Apple sells iPhones, they sell lots and lots of iPhones. They don't give this stuff away for free, they build the APIs for themselves and 3rd party devs because doing so helps them sell more iPhones.

 

[surferfb]

I don't think your counter argument carries the weight you think it does. Especially for all of the apps already on the App Store that don't charge anything.

For that matter apps like Point of Sale systems that are free in the store yet require a license purchased elsewhere to get past the login screen. Or apps like Netflix, Hulu, Paramount, and Max that require subscription purchased elsewhere to get past the login screen. Or apps like Audible that require an account made elsewhere to get past the login screen and to purchase books. Or, or, or.

Again, this is a philosophical thing for me. Apple owns and maintains iOS. They own and maintain the APIs that allow the apps to function. Barring a very good reason (health, safety, an actual monopoly, those sorts of things) I don't think the government should be telling companies how they are allowed/not allowed to monetize their IP. (Which is coincidently, why I'm against Apple's anti steering provisions - developers should be allowed to monetize their IP however they see fit! But since they're using Apple's IP to do so, Apple should be able to collect a commission for facilitating the sale).

If Apple wants to allow all apps with blue icons pay nothing and all apps with red icons pay 75% they should be allowed to do so. Pretty much, it's Apple's product, they should be allowed to charge however they want for it. It doesn't mean I am glad Apple charges what they do, or that I think it's a good idea, or don't understand the arguments against them doing so (In fact, in a lot of cases actually agree with those arguments). But ultimately, for me, it should be Apple's decision to make. If developers don't like it, don't develop for the platform, make awesome apps for Android, point out the rules and why they won't build for Apple devices when people ask for an iOS version and get people to switch.

 

[bcortens]

Again, this is a philosophical thing for me. Apple owns and maintains iOS. They own and maintain the APIs that allow the apps to function. Barring a very good reason (health, safety, an actual monopoly, those sorts of things) I don't think the government should be telling companies how they are allowed/not allowed to monetize their IP. (Which is coincidently, why I'm against Apple's anti steering provisions - developers should be allowed to monetize their IP however they see fit! But since they're using Apple's IP to do so, Apple should be able to collect a commission for facilitating the sale).

They don't do these things out of the goodness of their hearts. This IP is built to help sell more iPhones, by attracting third party devs which help make the iPhone more desirable.

Further, IMO in a better world the IP that is on the phone when you buy it would be considered yours (for personal use).

If Apple wants to allow all apps with blue icons pay nothing and all apps with red icons pay 75% they should be allowed to do so. It doesn't mean I support Apple doing so, or that I think it's a good idea, or don't understand (or in some cases actually agree with) the arguments against them doing so.

This would be fine if we still lived in 2008, but it is not that time anymore. Phones aren't just niche luxury items. Today devs who want to sell a service are almost required to be on iOS. This means they no longer have the market power to say no. If you can't say no and still have a viable business then you have no real choice.

Given all this, Apple is going to have to get used to being treated as more of a utility than they want. Especially so long as they hold a monopoly on App distribution (in most of the world). They are going to have to get used to offering fair and equal terms to all apps, they won't be able to offer some app categories zero fees and others 30% fees. They are going to have to treat all apps more equally.

 

[koelsh]

Again, this is a philosophical thing for me. Apple owns and maintains iOS. They own and maintain the APIs that allow the apps to function. Barring a very good reason (health, safety, an actual monopoly, those sorts of things) I don't think the government should be telling companies how they are allowed/not allowed to monetize their IP. (Which is coincidently, why I'm against Apple's anti steering provisions - developers should be allowed to monetize their IP however they see fit! But since they're using Apple's IP to do so, Apple should be able to collect a commission for facilitating the sale).

If Apple wants to allow all apps with blue icons pay nothing and all apps with red icons pay 75% they should be allowed to do so. It doesn't mean I support Apple doing so, or that I think it's a good idea, or don't understand (or in some cases actually agree with) the arguments against them doing so.

I agree with you until something becomes a public utility.

When power stations and light bulb companies started they could charge for use of their IP as they pleased. Today they cannot. Somewhere along the line that had to change. I feel that "installing and monetizing apps on phones" has grown to the point of transitioning to a "public utility".

 

[ProbablyDylan]

Except they aren't. EPIC isn't making a platform. They're just trying to screw apple.

Who cares if they are or aren't? The result is the same: anyone else can build their own payment platform if they so please, or just use Apple's if they decide that offering is superior.

Your example is iOS vs Android, not App Store vs. Epic store.

I didn't give an example. Thanks for clarifying though, and I agree.

Epic is getting paid and Apple did the work. That's BS.

By this logic, why should Epic give Apple a cut of something Epic sold on Epic's store? When Epic does the hosting, payment processing, etc. That's all Epic doing the work.

 

[DelayedGratificationGene]

Well if the Developers do not pay then solution is Apple will have to raise the cost of the iPhone so as to get reimbursed for hosting the Developer Platform. Simple as that. Your increased cost can be tied directly back to lowlife Sweeney who manipulates kids to clean out their wallets.

 

[I7guy]

They don't do these things out of the goodness of their hearts. This IP is built to help sell more iPhones, by attracting third party devs which help make the iPhone more desirable.

Further, IMO in a better world the IP that is on the phone when you buy it would be considered yours (for personal use).

This would be fine if we still lived in 2008, but it is not that time anymore. Phones aren't just niche luxury items. Today devs who want to sell a service are almost required to be on iOS. This means they no longer have the market power to say no. If you can't say no and still have a viable business then you have no real choice.

Given all this, Apple is going to have to get used to being treated as more of a utility than they want. Especially so long as they hold a monopoly on App distribution (in most of the world). They are going to have to get used to offering fair and equal terms to all apps, they won't be able to offer some app categories zero fees and others 30% fees. They are going to have to treat all apps more equally.

The bolded is a circular argument. If Apple went away tomorrow the world at large may miss them, but people would still go about their normal routines. BlackBerry went away, as a stalwart of the smartphone, and yet here are today.

Nobody knows where this singling to shake out, but government interference in these matters generally imo makes things worse for everybody.

 

[frou]

Make hay while the sun shines. Even if Apple get permanently slapped down now, they've already accumulated a humongous amount of hay.

 

[bcortens]

The bolded is a circular argument. If Apple went away tomorrow the world at large may miss them, but people would still go about their normal routines. BlackBerry went away, as a stalwart of the smartphone, and yet here are today.

Nobody knows where this singling to shake out, but government interference in these matters generally imo makes things worse for everybody.

Not really, it's more of a chicken and egg problem. If Apple disappeared sure devs would be fine, because consumers would migrate to other platforms. How do you get consumers to migrate without a critical mass of apps leaving iOS? You can't, your stuck in a prisoner's dilemma where even if it would be better for all devs negotiating position if they all left iOS at once, the devs that stayed would reap the rewards of the attention of being the ones that stayed. There is too much to be gained in the short term by defecting and staying than the longer term gains if everyone left at once.

Further: the world today is different than the world of 2013 (when blackberry disappeared), far more of life is online today than in 2013. When Blackberry existed there were more options for smartphone OSs (even windows phone lasted till 2015).

 

[roland.g]

How much does Apple benefit from having third party devs? Should Apple Pay out 15% of iPhone revenue to third party devs because without third party devs they would sell half the number of iPhones they do today?

Too many commentators don't understand that the iPhone is not just valuable on its own but that the network effects of having third party devs make the iPhone more desirable. It is a symbiotic relationship in which both benefit but Apple (and its fans) seem to think that it is a one way relationship where Apple is being ripped off. Apple doesn't create the APIs because they are benevolent and devs should be grateful, they build them because having great APIs attracts the best devs which attract the best customers which sell more iPhones.


I dare Apple to cut off all third party app support for iOS and see how long they remain competitive with Android in the sales department.

Very chicken and the egg. Hmm. Now I'm hungry.

While you make a great case that Apple benefits from the devs, the entirety of the mobile app dev community exploded because of the iPhone. Not because of Android. I believe Apple should get some revenue for what it does to produce the tools, vet the apps, host the platform, and do all the things that make this possible but that Apple probably could find a better middle ground in the economics of it.

 

[surferfb]

They don't do these things out of the goodness of their hearts. This IP is built to help sell more iPhones, by attracting third party devs which help make the iPhone more desirable.

Don't disagree at all, but that IP also costs billions of dollars to create and maintain, and IMO Apple should be allowed to ask those who are making a living off of that IP to pay for its use.

Further, IMO in a better world the IP that is on the phone when you buy it would be considered yours (for personal use).

Exactly how is building and selling an app "personal use?"

This would be fine if we still lived in 2008, but it is not that time anymore. Phones aren't just niche luxury items. Today devs who want to sell a service are almost required to be on iOS. This means they no longer have the market power to say no. If you can't say no and still have a viable business then you have no real choice.

If your business isn't viable without addressing iOS then I'd say the 15% that almost all developers pay seems like a really good deal. If your bookstore isn't viable without the foot traffic that being in the fancy mall brings, then you need to pay the mall owner for the space in that mall. You don't get the government to come in and force the mall owner to give you a store for free and not pay for the rent and utilities.

Given all this, Apple is going to have to get used to being treated as more of a utility than they want. Especially so long as they hold a monopoly on App distribution (in most of the world). They are going to have to get used to offering fair and equal terms to all apps, they won't be able to offer some app categories zero fees and others 30% fees. They are going to have to treat all apps more equally.

Agree they're going to have to get used to it. Doesn't mean I think its right, and I suspect prices will increase for everyone to account for it.

 

[bcortens]

Don't disagree at all, but that IP also costs billions of dollars to create and maintain, and IMO Apple should be allowed to ask those who are making a living off of that IP to pay for its use.

Then the devs should be able to ask apple to pay them for every iPhone sale that is on top of what they would have sold if the iPhone didn't have third party apps (how many iPhones have zero apps installed could be the baseline).

Exactly how is building and selling an app "personal use?"

The dev shouldn't need to pay apple for access to IP that is already on the phone that I (the consumer paid for).

If your business isn't viable without addressing iOS then I'd say the 15% that almost all developers pay seems like a really good deal. If your bookstore isn't viable without the foot traffic that being in the fancy mall brings, then you need to pay the mall owner for the space in that mall. You don't get the government to come in and force the mall owner to give you a store for free and not pay for the rent and utilities.

I don't mind if all devs have to pay to be in the store, that isn't my issue (though because Apple competes with some of those apps it might be anti-competitive at apple's scale) my issue is with the idea that some apps should be exempt from paying for the store because they fall into certain categories (physical goods sales, reader apps, etc...)

I also think that the fee for the App Store should be required to be disentangled from apple's attempts to monetize each transaction on iOS. If Apple needs to charge a per GB or per download rate (for monetized apps) that would be far fairer than asking for a percentage of each transaction.