Microsoft Says Apple's 30% Fee Makes Xbox Cloud Gaming iOS App 'Impossible'

[bzgnyc2]

Why?

It’s their own ecosystem, they should be able to do what they want. Even if that means pissing people off or losing business.

You realize the more Apple gives up on service revenue, the more we’ll end up paying in hardware to circumvent that.

That's not how free markets work. When a vendor can raise prices to make up for a loss somewhere else that's almost the definition of a monopoly (it implies they have the power to arbitrarily set prices without regards to competition). In the context of a free market, if a product is priced optimally then raising the price of that product would result in a loss of gross margin and therefore profits.

While Apple sells premium products, I believe they are priced at the top of what the market will bear for their value. I can't imagine them raising RAM prices further without losing customers...

 

[BaldiMac]

Agree it is at best cart before horse and otherwise not prerequisite for intervention. Being a monopoly isn't technically illegal in the US but restraint of trade regardless of monopoly status is illegal. However, as a practical matter it has been assumed that restrainst of trade is ineffective outside of monopoly situations.

Relevant text from the Sherman Antitrust Act, "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal." and "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce..."

Note that the first part doesn't depend on the existance of a monopoly but rather outlaws any contractual attempts to restrain trade (a concept which has common law origins predating the forming of the US).

Also note the second part includes attempts to monopolize or conspire to monopolize any part of trade or commerce. Thus 5 competitors with 20% market share each are not individually a monopoly but it would be illegal for them to conspire to set prices (aka "pricing fixing").

The latter is not the Apple situation. As a platform for hosting mobile applications, iOS is a duopoly with Android. Duopolies can arise naturally and behave like monopolies (e.g. through tacit collusion). In general the most effective remedy for duopolies is a 3rd and maybe 4th viable competitor.

It's unclear how that will arise in the mobile OS market in the foreseeable future. At this point my ideal is a shift to webapps for most things. Then I can see why Apple has no interest in making those a first class experience on the iPhone, etc. Reminds me of how MS tried to coopt the web back in the IE days.

Finally note one area where the Epic case found against Apple was it's prohibition against developers communicating alternatives to the app store. It's unclear to me why other legal or technically enforced limits on what apps can do on the platform are not illegal but I am not a lawyer and it is not practical for me to study all the app store rules in the context of all the relevant law and precedence...

I agree with most of that with a couple notes. First, iOS is not a duopoly with Android, because Android isn’t a single entity. However, you can reasonably argue that the App Store and Google Play Store have been a duopoly.

My other point is that Google has conspired with its horizontal competitors across the vast majority of the market to push Google Play Services. And yet, competition regulators have been strangely resistant to addressing this issue. Especially considering Google has a search monopoly tied to it.

 

[MacCheetah3]

A better analogy would be if you worked from home and made your living in the apartment. Would it be OK for the apartment to take 30% of your income because they built and maintain the apartment?

Many(/most?) rental and HOA agreements take the approach of prohibiting that use.

They are gatekeeping devices that the customers have fully paid for. We should be able to decide where we want to install software from. You don't want it, fine, I don't really care how you use your device, and you shouldn't care about what I want to do with mine either.

They are allowed to and you agreed to it, even if using the transfer from previous device method.

https://www.apple.com/legal/sla/docs/iOS17_iPadOS17.pdf

I own the hardware. Where can I change or opt-opt of said platform on the hardware I own?

As noted earlier, it’s opt-in. You agree to the terms or return the device …Or just keep it around as a weight …Or develop your own software (i.e., ROM, firmware, OS, apps). This is far from a new concept and requirement. Yes, I know, most don’t read the contracts, leases, terms, conditions, guidelines, legal liabilities, whatnot and simply accept them (though don’t?). And for awhile — although some still do — software companies followed suit in requiring users to scroll to the bottom of terms documents before the Agree button would become available. Nonetheless, the problem is on you. By the way, I do read the vast majority of terms, contracts, leases, etc in full.

Big Tech Monopolists...

Said one multi billion dollar company to the other! LOL.

Such a joke. It’s two greedy ass companies being greedy.

Yes! I don’t know why anyone avidly defends any of them (e.g., Epic, Apple, MS, Google). I promise none of this is consumer-oriented despite what companies or even the ulterior motive EU claim. It’s just the unreasonably wealthy whining in hopes they’ll get their way.

Remember when Epic said they will pass savings onto consumers? :: Borderlands 2 General Discussions

Remember when Epic said their 12-88 revenue split (vs 20-80 on Steam) with publishers will pass savings onto consumers? That has happened for the first and last time with Metro Exodus, and even then, it was for US customers only. Guess it was a "LOL JK you got PRANKED" because Borderlands 3 is...

steamcommunity.com

So why does Apple allow Spotify, Netflix and Kindle in the App Store without offering IAP?

Apple Letting 'Reader' Apps Offer Links for Account Sign Ups Outside of the App Store to Close Japan Investigation

Apple today announced that the Japan Fair Trade Commission (JFTC) has agreed to close its App Store investigation in exchange for changes to how...

www.macrumors.com

…Which is mentioned:

Every Apple App Store fee, explained: How much, for what, and when | AppleInsider

The App Store has an enormous reach, enabling developers to access billions of users. But, there is confusion on how much Apple charges — and on what.

appleinsider.com

App Store fees only apply to digital goods and services, so this excludes physical goods, such as ordering on the Amazon app, food from DoorDash deliveries, and tangible services like Uber rides.

[…] Apple has made a series of concessions over the years, either of its own volition or due to legal compulsion.

Exceptions and counter-exceptions​

Paid boosts to social media posts incur the in-app purchase fee, but apps for the sole purpose of buying and managing advertising campaigns do not.

Additionally, "reader" apps — those used to consume previously purchased content such as news, books, music, and video — are also exempt from App Store fees on that content.
The weird case here is for game streaming apps, such as Google's Stadia and Microsoft's Xbox Cloud Gaming. Technically, they are allowed on the App Store without the subscription incurring a fee, but there are some difficult hoops through which you'd need to jump.

The main one is Apple's stipulation that "Each streaming game must be submitted to the App Store as an individual app so that it has an App Store product page, appears in charts and search, has user ratings and review..."

That's a lot of work, even if you have the rights to do so for every game.

There’s also (now) a process to request an exception on a per app basis:

Support - Apple Developer

developer.apple.com

I think Apple is in the wrong on this as it is exactly like netflix streaming. I do think it is more of a move to get native iOS apps in the store, purchases like this enhance the ecosystem, rather than streaming where the games are essentially portable.

I also think it's the opposite for Microsoft, they don't want to have a 30% more expensive streaming app (which they will probably get minimal sales anyway) as Apple may become a serious competitor in the future, right now in the portable space with the rise of Steam Deck and other systems windows powered PC gaming might have serious competition from apple in several years time.

I agree for the most part, if we’re talking about a game streaming service. But, to be honest, I’ve read reviews and tried Xbox Cloud gaming and it’s not useable for most games — yes, my Internet connection is fine when using my Xbox and for other gaming. Also, this seems to be the general opinion/conclusion about all streaming game services — I mean, there’s a reason they haven’t caught on.

As for Microsoft offering (some of) their Xbox GamePass library… Sure, however, I agree with Apple, each game should be submitted as their own app and not part of an app as a marketplace.

But Microsoft does not mandate using their App Store on Windows.

But they should. I briefly transitioned to PC gaming — I’ve mostly leaned on consoles with some early Mac gaming — and OMFG. Allowing every company to strong-arm is an absolutely horrible experience. On Xbox, for example, every game of the platform is available in the sole integrated marketplace. On Windows, I had to install Epic’s game store/game launcher thing, EA’s app, etc because they were allowed to be exclusive. Again, one of the worst experiences ever!

I’m halfway through the discussion at this point and I’ll leave it at that for now.

 

[SpotOnT]

I can’t wait for the EU to go after Microsoft for their xbox monopoly.

 

[SpotOnT]

As I’ve said to others this isn’t the same. Microsoft aren’t selling an app, a subscription or a game and bemoaning the 30% fee. They’re trying to put a free app on iOS, a client for their streaming service, an app with no in app purchases on iOS, something for their existing subscribers to use, and Apple won’t let them. Apple’s rules say they have to include the ability to subscribe to the service within the App, and Apple can take a 30% cut of that fee. That’s the issue, not that they take a 30% cut, but that they’re being forced to sell the subscriptions that Apple will take 30% from in the first place.

If that is the actual situation, then I agree it’s a problem.

I know some movie/tv streaming services require you to change account settings or make subscriptions on their website and not in the app.

I don’t see why a game streaming service shouldn’t be able to do the same thing.

 

[FaustsHausUK]

Ask Microsoft its cut of the Xbox store. 🤭

 

[Krizoitz]

MS isn't asking for any list or customer contact info. They are just making it public why Xbox game pass isn't in Apple's store.

Thats not the comment I was replying to, pay attention or stay out of the conversation

 

[Krizoitz]

Apple can choose to not sell in the EU then they don't have to follow the regulations in the EU.

And I hope they do, then the EU regulators will have to deal with tens of millions of angry customers who were super satisfied with their Apple products to begin with and now can’t get them because Spotify whined about Apple too much.

 

[Krizoitz]

Supermarkets operate brick and mortar stores with associated costs.

And Apple operates a software and hardware business with associated costs. You think developing and maintaining iOS is free? You think creating Xcode and the associated APIs cost nothing? You think maintaining the AppStore and other infrastructure doesn’t require paying employees?

Gimme a break.

 

[Krizoitz]

You sell your house, and you pay your listing agent a ~6% commission. The listing agent splits that 50/50 with the buyer’s agent. And for some reason, Apple can’t survive off of anything less than a 30% commission on each and every transaction on your iDevice.

No one is forced to make or offer an iOS app. If Microsoft et all think 30% is too high then they don’t make the app. It’s that simple. And Microsoft charges its own customers 30% to sell games for XBox so it’s rich of them to complain.

And if you as a user don’t like Apples model, it’s easy, go buy an Android phone where you can side load to your hearts content.

Why should Apple be forced to change when its customers are happy and there is a more than viable alternative?

Answer: Because this isn’t about users or fairness, it’s straight up protectionism for European companies like Spotify, which is why Spotify hasn’t been designated as a “gatekeeper” despite having a MUCH larger user base in Europe for its service than Apple has.

 

[phoynak]

Apple has costs to absorb to maintain the App Store. Even if at 30% they make a profit after the costs are accounted for good for Apple. Free market economy. If you don’t like Apple there are alternatives.

 

[macfacts]

And Netflix, Spotify and Kindle aren’t paying for this because?

You forgot Uber and food delivery apps and gambling/lottery apps.

 

[macfacts]

If Microsoft et all think 30% is too high then they don’t make the app.

And this is what MS has done they didn't make a iOS app, they are just explaining to the EU and iOS users why this app doesn't exist.

 

[macfacts]

And Apple operates a software and hardware business with associated costs. You think developing and maintaining iOS is free? You think creating Xcode and the associated APIs cost nothing? You think maintaining the AppStore and other infrastructure doesn’t require paying employees?

Gimme a break.

You think apple is giving iPhones away for free?

 

[eltoslightfoot]

Apple has become so greedy. Its beginning to turn me off.

Already there. Down to just the watch and the phone.

 

[bzgnyc2]

And Apple operates a software and hardware business with associated costs. You think developing and maintaining iOS is free? You think creating Xcode and the associated APIs cost nothing? You think maintaining the AppStore and other infrastructure doesn’t require paying employees?

Gimme a break.

Haha come on man that's not even close to what I implied. Then the phone doesn't sell at 0 margin. Apple gets more margin on their phones than almost any computer manufacture. I expect that to pay for the OS, etc. The App store model wasn't required for the Mac to be profitable. Similarly MS clearly doesn't get a cut of most software sales for Windows either and no one said that's not profitable. And Apple's gross margin per iPhone is greater than what MS gets per PC sale.

It's funny Apple exempts physicial goods sales from their commission because of course Amazon but there's no real justification for that that doesn't apply to digital goods. Then I am curious what's the total overhead of selling through Amazon versus Apple's 30% commission. I wouldn't be surprised if in this day and age, I could have Amazon warehouse and deliver physicial goods for me with lower markups than these marketplaces get on digital sales.

 

[bzgnyc2]

I agree with most of that with a couple notes. First, iOS is not a duopoly with Android, because Android isn’t a single entity. However, you can reasonably argue that the App Store and Google Play Store have been a duopoly.

I think Android is one of the two destinations for mobile apps which underly the viability of any mobile platform. Banks make and offer their apps for iOS and Android only. Uber is available for iOS and Android only. Some might make their apps available outside the Google Play Store but practically speaking companies are only making apps fo those two platforms.

My other point is that Google has conspired with its horizontal competitors across the vast majority of the market to push Google Play Services. And yet, competition regulators have been strangely resistant to addressing this issue. Especially considering Google has a search monopoly tied to it.

They may not be applying the laws equally there and I don't support that. If I had to guess the regulators feel stuck -- if they crack down on Android that only strengthens Apple. That's the problem with duopolies. They're impossible to partially regulate. We really need a strong 3rd option.

 

[Timo_Existencia]

If I had to guess the regulators feel stuck -- if they crack down on Android that only strengthens Apple.

So, you don't regulate the clear, overwhelming market leader because you don't want to give any advantage the company their easily beating in marketshare?

That makes zero sense.

 

[MacCheetah3]

And I hope they do, then the EU regulators will have to deal with tens of millions of angry customers who were super satisfied with their Apple products to begin with and now can’t get them because Spotify whined about Apple too much.

As nice (and a fun jab) as that would have been, I think, most of us understand that wouldn’t have been a fiscally sensible choice — though I have no doubt Apple execs strongly considered it.

Answer: Because this isn’t about users or fairness, it’s straight up protectionism for European companies like Spotify

This is absolutely one of the veiled motives. And while, in general, you can’t blame them for having a bias to help domestic businesses, IMO, it’s disgusting they try to hide that fact… And disappointing many can’t see it. And, yes, it’s not as if the US government is any better in such matters.

And Apple operates a software and hardware business with associated costs. You think developing and maintaining iOS is free? You think creating Xcode and the associated APIs cost nothing? You think maintaining the AppStore and other infrastructure doesn’t require paying employees?

Gimme a break.

… As well as brand image/reputation (i.e., marketing). iDevices are popular, that’s value in itself. (Maybe that’s what you were implying with “other infrastructure."

 

[MacCheetah3]

It's funny Apple exempts physicial goods sales from their commission because of course Amazon but there's no real justification for that that doesn't apply to digital goods. Then I am curious what's the total overhead of selling through Amazon versus Apple's 30% commission. I wouldn't be surprised if in this day and age, I could have Amazon warehouse and deliver physicial goods for me with lower markups than these marketplaces get on digital sales.

And this is one of those business decisions. Should you undercut the competition to (potentially) gain market share or do as they do (e.g., raise prices alongside them)?

 

[Downhilltenago]

What does Samsung/android charge? Apple makes enough money that this isn’t warranted.

 

[bsolar]

But they should. I briefly transitioned to PC gaming — I’ve mostly leaned on consoles with some early Mac gaming — and OMFG. Allowing every company to strong-arm is an absolutely horrible experience. On Xbox, for example, every game of the platform is available in the sole integrated marketplace. On Windows, I had to install Epic’s game store/game launcher thing, EA’s app, etc because they were allowed to be exclusive. Again, one of the worst experiences ever!

The problem you have is not the multiple competing game stores: it's the existence of exclusives and barriers to switch, e.g. the inability to transfer purchases between competing stores.

You should argue against exclusives, not in favor of establishing a monopoly marketplace. Such marketplace would be a bad idea in the long term regardless of how much convenience in the short term it would bring.

 

[Krizoitz]

And this is what MS has done they didn't make a iOS app, they are just explaining to the EU and iOS users why this app doesn't exist.

No, they are trying to get the EU to force Apple to lower the price. Don’t pretend they are “just explaining”. They are hypocrites who are already doing the EXACT SAME THING.

 

[Krizoitz]

You think apple is giving iPhones away for free?

What does that have to do with anything? Buying an iPhone doesn’t give you access to the developer program, completely different things.

If a buy a cake from Walmart it doesn’t mean I should get everything else they sell for free.

 

[Krizoitz]

Then the phone doesn't sell at 0 margin. Apple gets more margin on their phones than almost any computer manufacture. I expect that to pay for the OS, etc.

Doesn’t matter what you expect, Apple should have the right to decide whether or not to charge developers directly for the cost of developing and maintaining the APIs, servers, etc. Being profitable selling iPhones doesn’t mean they shouldn’t be able to make money elsewhere.

Do you think if WalMart makes a profit on its grocery sales it should have to give away everything else in the store for free? Because that’s what you are arguing.

I wouldn't be surprised if in this day and age, I could have Amazon warehouse and deliver physicial goods for me with lower markups than these marketplaces get on digital sales.

You’d be dead wrong. Amazon charges between 8-40% (depending on category) just for SELLING on their site. That doesn’t include the storage and shipping costs. The average Fulfillment by Amazon (FBA) seller makes a net profit between 15-20% of their gross sales. Retail markup is way higher than Apples 30% fees.