This is wrong:
in Physical sales the developer gets 100% of the price they ask from the retailer. The Retailer than provides markup in order to include their own profit margins.
That's not the model of application stores. in this case, Apple doesn't pay anyone for just having their app available in the store itself. in fact, Apple charges Developers for that already.
if we wanted to make some weird analogy to physical stores, it would be more like:
Widget Producer pays Walmart for "right" to have a shelf in the store with a "receipt". the buyer takes that receit to the checkout. then the Walmart tells the widget buyer to send you the widget. And then takes another 30% from that transaction
it's a silly analogy because comparing what an App store does and their models to physical retail presence doesn't work. the entire model of who pays who and when is completely different.
in retail: the storefront does not take a set cut of every sale of every widget. They purchase those widgets and attempt to sell it to you at their own markup. if that widget doesn't sell, it's not the manufacturer who loses, it's Walmart.
in the App store model, Apple NEVER loses and always gains through numerous different means because they have a captive audience who can not go elsewhere. that by definition is a monopolistic business model.
Wrong? Silly?
It was a super simple example about perspective.
Epic can’t claim stupid. Epic knew that there is 30% fee and that they’re not entitled to the full amount. So if they set their margin at $7, then the end price will be $10. If they wanted $10, then the end price would have to be 14 and change.
Is it a high rate? Depends on IF you are successful, IF you sell through the app store or not and how much you sell. Maybe it could be restructered or tiered or hybrid, … but you don’t go violating agreements and claim not fair, when they willingly and knowingly entered into an agreement to develop and publish.
If they thought the 30% was too high - even if it was just the same as all other app stores - … EPIC could have just taken a hike, and skipped iOS, skipped Android, Microsoft, … oh wait.
Yeah, it costs money to do business, it costs money to get onto platforms and reach an audience.
Brands fight hard to get their products in front of consumers, whether as a value brand, mid tier or exclusive brand. Who cares if a retailer does not have a fixed markup for every single item they sell? Apple kept chose to keep it simple. Free tools, free platform, support etc … Selling? 30%.
Epic knowingly said yes to develop for iOS and this fee structure.
And, it does have merit to look to traditional sales. Retail is very competetive. Brands have to hit price points so that their products will sell, or the merchandise will not move, most retailers will not agree to offer it for sale, if they don’t see it as a saleable item. So you need to hit a certain wholesale cost. Then + fees and profit sets the retail price. That $5 toy just became a $15-20 toy. The brand gets their $5, and the retailer gets their $10-15 gross per toy, before credit cards fees and all operational costs.
Lots more can be said. In essence it is simple. Epic knowingly agreed to the store rules and then knowingly violated the agreements it entered into.
