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

[Krizoitz]

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.

If the EU actually follows through on their ludicrous plan to charge fees based on Apples global sales it won’t take long before the potential fees exceed their entire EU iPhone revenue.

Investors hate uncertainty and the EU is increasingly creating uncertainty with its ridiculous DMA. Apple (and others) anre already limiting features because it’s unclear what even is or isn’t allowed. If the EU keeps it up that uncertainty will reduce the profitability of the market even more, making pulling out less and less risky for Apple, Google, etc.

 

[eltoslightfoot]

I quit "stanning" for corporations long ago, but we don't get to dictate anything as consumers other than do we buy and use the product.

So I no longer use mac products, nor my iPad Pro. It's simply too much money when I look on the Windows side of things. If Android ever came out with a secure version with the equivalent of Advanced Data Protection for my user data, then it would be really tough. I would probably drop the Watch and iPhone as well.

I am tired of seeing tons of bargains, but only on the "other side of the fence". Does Apple deserve a cut for the App Store? Of course. Should they also then allow side-loading so that you don't have to pay it? Of course.

That's the bottom line, and yes, they don't have to listen to me. But I also don't have to support them either.

 

[bzgnyc2]

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.

Agree -- not asking Apple to subsidize a business line. However, let's not overstate the cost of developing APIs and servers. Everyone has an API. The web has APIs and they are published for all to use. Everyone has servers. Walmart has quite a bit of servers.

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.

No that's not what I am arguing. I argued that I bought the OS with the phone and the margins there are high enough that they don't need the App Store to subsidize it. If I didn't buy one additional thing through their App Store, they'd be fine.

On the other hand I argued elsewhere that I have no problem with them adding markup/commission/referral fee/etc to things sold through their App Store. There should just be competition for it.

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.

First of all let's keep markup and margin seperate. Second, let's not cherry pick fees. What Amazon rightfully calls a referral fee is typically in the 15% range. 40% is not the norm.

Then their fulfillment fees are amazingly cheap when you think about all that goes into it.

Perhaps this is more of an aside but it's amazing to me how much cost we've squeezed out of the delivery of physicial goods but on the flip side how much overhead we've added to the delivery of content.

In any case, you can use Amazon to deliver goods not bought on their website. So if you don't like their referral fee, sell on your own website. If you don't like their fulfillment fees, do your own fulfillment. And it's not like you have to develop products specific for Amazon that you can't sell anywhere else and you can't sell products developed elsewhere on Amazon.

By the way, 15-20% net margin isn't bad. Much higher than grocery stores and most retailers. I work in industries where 3-5% is common. 5-10% if you're doing well.

 

[Mother Nature]

Hardly the same as a landlord. 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.

When you buy the device and power it up for the first time, you are presented with a contract that dictates what you CAN do and what you CANNOT do, if you continue to use the device past the return window, it is understood that you read and agreed to the contract. You can scream all you want but it is what it is.

 

[eltoslightfoot]

When you buy the device and power it up for the first time, you are presented with a contract that dictates what you CAN do and what you CANNOT do, if you continue to use the device past the return window, it is understood that you read and agreed to the contract. You can scream all you want but it is what it is.

Apple has changed that contract many times based on user feedback. It does matter.


I, and I know this sounds a bit crazy, even think some of their employees lurk here for user feedback.

 

[BaldiMac]

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.

I'm not sure what you are trying to say here. Are you implying that it's a problem that android-based OSs are compatible with each other? Seems like a good thing to me.

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.

Again, not a duopoly. As far as your guess that regulators may "feel stuck" because eliminating anti-competitive agreements by Google may benefit Apple... that's pretty messed up. Refusing to stop anti-competitive actions by the market leader because it may benefit the only company that's not a party to the conspiracy would be government at its worst.

 

[TLuc]

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.

Interesting viewpoint, I find it misses the mark on grasping the nuances of the PC gaming scene.

I wouldn't call myself a hardcore gamer, yet I have all the bells and whistles installed on it: Epic Game Launcher, Steam, EA Launcher, Ubisoft Launcher.

The idea of a single app or store for all game downloads might seem appealing, but the real draw for me was the promotions, discounts, and even free games. These companies have handed out some top-notch AAA titles at no cost, which I think is a great deal. Now, with all these stores vying for attention, they're rolling out various promotions and even giving away games. If there were only one app or store for all PC games, we wouldn't see such incentives—after all, without alternatives, users wouldn't really have a choice.

The Windows gaming market is a prime example of how having multiple options and robust competition benefits consumers. Sure, you might miss the convenience of a single store, but the trade-off is saving money on games, which adds real value.

 

[tobybrut]

Because an outside company is controlling how I use my personal property.

Meijer doesn't tell me how to use my carrots. VW doesn't tell me what I can do with my car, where I have it serviced, what brands of parts I use, or where to get fuel. They don't even tell me what I can with my Mac; I can blow away macOS if I want and install Linux.

For some reason iOS/ipadOS devices are "special", even after they completely lose support from apple, such as my iPad 2.

This is how patent and copyright law works. Apple owns the software, just like music companies own the music on CD’s you might own or the music you stream or purchase digitally. For a CD, you may own the disk, itself, but you don’t own what‘s on it. Neither do you own any of the music or movies you buy digitally. Sony revoking a large number of digital movies should show you that. The same applies to every software application you might own. You are only licensing it, and you don’t own it. Apple owns the OS software and therefore they can put whatever they feel like that’s legal in their terms of use. Your only option is to not buy the product. It’s not just Apple. It’s every software company.

Yes, you can delete the OS and install Linux. Linux distributions have their own user agreements, and you don’t own that either.

Whether you like it or not, that’s how the world works legally. I’m not expressing an opinion on whether it’s right or wrong, but I’m just saying this is the way it is.

 

[Krizoitz]

However, let's not overstate the cost of developing APIs and servers. Everyone has an API. The web has APIs and they are published for all to use. Everyone has servers. Walmart has quite a bit of servers.

Spoken like someone who has no clue how much it costs to develop and maintain APIs and servers. Yeah WalMart, one of the most profitable companies in the world has servers. Servers they spend a lot of money on.

Do you know why software engineers get paid so well? It’s not because the job is cheap and easy and anyone can just do it. I don’t know what industry you work in but it’s CLEARLY not IT.

No that's not what I am arguing. I argued that I bought the OS with the phone and the margins there are high enough that they don't need the App Store to subsidize it. If I didn't buy one additional thing through their App Store, they'd be fine.

Yes, it’s exactly what you are arguing. When you buy an iPhone you are paying for…the iPhone. Not the AppStore. Not Xcode. Not the Developer program. Apple making money on selling iPhones in NO way means they shouldn’t be able to charge developers for using its developer tools and resource seperately.

 

[Krizoitz]

There should just be competition for it.

There IS competition. It’s called Android. Don’t like Apples rules? Don’t develop for iPhone. Make an Android App instead. Or a web app. Or a PC app. Or go all out and make a competing platform. Why should Apple, which again doesn’t even come close to owning HALF of the EU market, be forced to give away its resources to support its competitors?

Then their fulfillment fees are amazingly cheap when you think about all that goes into it.

And Apples fees are amazingly cheap compared to what came before and competitive with what exists now. Just because you (or the EU) don’t understand or know the IT industry doesn’t make that less true.

By the way, 15-20% net margin isn't bad. Much higher than grocery stores and most retailers. I work in industries where 3-5% is common. 5-10% if you're doing well.

And iPhone developers get a whopping 70% margin! If 5-10% in your industry is doing well, Apples 70% should be lauded.

 

[Krizoitz]

The Windows gaming market is a prime example of how having multiple options and robust competition benefits consumers. Sure, you might miss the convenience of a single store, but the trade-off is saving money on games, which adds real value.

And for some of us the convenience of a single store adds real value. Why do people refuse to get that? Why are we the ones who don’t get to make that choice for ourselves?

Apple should be allowed to continue to offer us that model. Many of us specifically chose iOS BECAUSE of the choices Apple made in its platform and distribution model.

If we didn’t/don’t like it, we’ve ALWAYS had the option to go with Android which offers side loading and alternate app stores.

Right now we have two different options. If the EU and its defenders have their way, we won’t. It’ll be one model, that everyone has to use no matter what.

 

[webkit]

There IS competition. It’s called Android. Don’t like Apples rules? Don’t develop for iPhone.

There ISN'T app sale/access competition in a significant (iOS) portion of the mobile app market when Apple’s App Store is the only option.

And for some of us the convenience of a single store adds real value. Why do people refuse to get that? Why are we the ones who don’t get to make that choice for ourselves?

Unless Apple shuts it down, the App Store won’t be going away and will continue to be the leading place where iPhone users get their apps. For that reason, the vast majority of apps available there now will continue to be available there going forward. Having alternative app stores, payment systems, etc. will likely have minimum impact on the convenience of using one store for those who choose to do so. Any app worth having will still want to have a presence in Apple's App Store. A more likely scenario would see iOS developers using other distribution options in addition to, not instead of, the App Store.

 

[TLuc]

And for some of us the convenience of a single store adds real value. Why do people refuse to get that? Why are we the ones who don’t get to make that choice for ourselves?

Saving money by paying less on something or even getting it for free is actual real value for anybody not just some users that are lazy.
Again, we are taking about gaming and Windows here, how is gaming doing on MacOS and apple's single app model in general for MacOS? Quite poorly I would say.
I remember a lot of people complained how most of the few AAA games that were launched for MacOS were at full price even if the games were in some cases more than 1 year old. That's the limitation of having one source to buy the game from. For example, I downloaded Death Stranding for free on Epic Game Launcher, you can't beat that.

Apple should be allowed to continue to offer us that model. Many of us specifically chose iOS BECAUSE of the choices Apple made in its platform and distribution model.

They can where the law allows it. Apple is not above the law and can't do whatever they want, nobody can.

If we didn’t/don’t like it, we’ve ALWAYS had the option to go with Android which offers side loading and alternate app stores.

Or we have the option to create laws. Way better solution actually, if Apple doesn't like it, they can leave.

Right now we have two different options. If the EU and its defenders have their way, we won’t. It’ll be one model, that everyone has to use no matter what.

We will have more option actually, only apple won't have the same authoritarian control and won't be able to arbitrarily push developers around with their army of fans behind them, defending them no matter what.

Right now, something fascinating is happening in China. Apple is trying to push around WeChat because they get around their 30% tax. Those at apple have lost their minds.

 

[Funny Apple Man]

Sorry Microsoft, but Tim needs that new yacht asap. Pay up lol

I'm defending the principle of the marketplace. Keep up.

Cool, and I will keep defending the principle of calling out corpos and billionaires for their bad behavior.

 

[tobybrut]

Again, we are taking about gaming and Windows here, how is gaming doing on MacOS and apple's single app model in general for MacOS? Quite poorly I would say.

The lack of AAA gaming on the Mac has nothing to do with the App Store since the App Store is relatively young compared to the Mac’s history and gaming has never been good. The reasons are numerous, from Apple’s lack of evangelizing gaming and the fact that it’s just a numbers game. Despite Apple doing reasonably well in Mac sales, the numbers are very small relative to the total number of PC’s out there. When Apple tops out at 10% of world wide sales and usually less, it’s easy for companies to make games for Windows while it’s unprofitable in many cases for games to come out for Mac because the sales just aren’t there.

You don’t see a lot of Linux games, do you, and there is no centralized App Store? They’re the most open system there is, but Linux makes up so small a percentage that it barely registers. Because of that, developers don’t make Linux games.

Apple could do what Microsoft has done if they ever get serious about gaming and just buy some game companies. That they haven’t while Microsoft swallows up gaming company after gaming company with their last major purchase being Activision/Blizzard is telling. They still aren’t serious about it. Until they are, Mac AAA gaming will continue to languish. You’d think it’d be a no brainer since serious gamers buy the most powerful and expensive machines, but Apple just doesn’t seem interested and parades out token games each year, pretending to be serious.

Where Apple does have a large market share in gaming is portable gaming where games are plentiful on iPhones, and that’s because it’s iPhone App Store is the most profitable for developers. It’s all about money and the number of customers they can attract on each platform.

 

[TLuc]

The lack of AAA gaming on the Mac has nothing to do with the App Store since the App Store is relatively young compared to the Mac’s history and gaming has never been good. The reasons are numerous, from Apple’s lack of evangelizing gaming and the fact that it’s just a numbers game. Despite Apple doing reasonably well in Mac sales, the numbers are very small relative to the total number of PC’s out there. When Apple tops out at 10% of world wide sales and usually less, it’s easy for companies to make games for Windows while it’s unprofitable in many cases for games to come out for Mac because the sales just aren’t there.

I was talking about them attracting AAA games on their platform. They are trying to do that, or at least that what it looks like.

You don’t see a lot of Linux games, do you, and there is no centralized App Store? They’re the most open system there is, but Linux makes up so small a percentage that it barely registers. Because of that, developers don’t make Linux games.

Linux is a different story, and now with what Steam is doing, for a AAA gamer, Linux is a considerably better option than MacOS, that's the power of an open system. Anyway, Linux has a way larger number of compatible AAA games than MacOS and Linux's market share on Steam is now higher than MacOS's, in a very short period, the market share increased almost 4 times, quite a spectacular evolution.

Apple could do what Microsoft has done if they ever get serious about gaming and just buy some game companies. That they haven’t while Microsoft swallows up gaming company after gaming company with their last major purchase being Activision/Blizzard is telling. They still aren’t serious about it. Until they are, Mac AAA gaming will continue to languish. You’d think it’d be a no brainer since serious gamers buy the most powerful and expensive machines, but Apple just doesn’t seem interested and parades out token games each year, pretending to be serious.
Where Apple does have a large market share in gaming is portable gaming where games are plentiful on iPhones, and that’s because it’s iPhone App Store is the most profitable for developers. It’s all about money and the number of customers they can attract on each platform.

These sound like excuses, Apple could have done this, and that and so on. Apple's closed single source model wouldn't really work with the AAA gaming market anyway and the only reason it works on iOS is because Apple can strongarm developers and make them do whatever they want. Their position with macos doesn't allow them to do something like this.

 

[tobybrut]

I was talking about them attracting AAA games on their platform. They are trying to do that, or at least that what it looks like.


Linux is a different story, and now with what Steam is doing, for a AAA gamer, Linux is a considerably better option than MacOS, that's the power of an open system. Anyway, Linux has a way larger number of compatible AAA games than MacOS and Linux's market share on Steam is now higher than MacOS's, in a very short period, the market share increased almost 4 times, quite a spectacular evolution.


These sound like excuses, Apple could have done this, and that and so on. Apple's closed single source model wouldn't really work with the AAA gaming market anyway and the only reason it works on iOS is because Apple can strongarm developers and make them do whatever they want. Their position with macos doesn't allow them to do something like this.

What excuses? How is “Apple isn’t serious about gaming” somehow considered an excuse, or is it a massive criticism? Here’s something more direct: Apple’s lack of action is a major fail when it comes to AAA gaming on Macs. They either suck at it or they don’t care about it. You choose.

The point is, the Mac App Store has no impact on whether gaming is successful or not. On the iPhone, the App Store is a major positive on iPhone gaming with developers flocking to the device over Android. On the Mac, nobody makes games because Apple never pushed it and Macs don’t sell well enough for developers to do it on their own. If your premise held any water, iPhone gaming would be a major fail and Mac gaming would be wildly successful because you can easily side load. Instead, it’s the iPhone App Store that has helped iPhone gaming to be massively successful instead because it makes more money for developers than Android does, despite Android outselling iOS 2-1 worldwide.

Bottom line, the reason AAA gaming fails on the Mac is because Apple doesn’t bother to do the work necessary to overcome the lack of Mac sales compared to Windows. It’s Apple lack of action (incompetency or indifference) that is at fault, not the presence of the Mac App Store.

 

[Krizoitz]

There ISN'T app sale/access competition in a significant (iOS) portion of the mobile app market when Apple’s App Store is the only option.

So buy an Android if that’s what you want. Again you already have that choice.

For that reason, the vast majority of apps available there now will continue to be available there going forward. Having alternative app stores, payment systems, etc. will likely have minimum impact on the convenience of using one store for those who choose to do so.

First you can’t gaurentee that. You know what does gaurentee it? The iPhone continuing to have only one AppStore, which is what many of us want. If you don’t fine, get a phone that does. An Android. They already exist. You have many of them to choose from. It’s ridiculous a minority platform is being treated as a monopoly and choices are being taken away from consumers in a thinly veiled act of pure European protectionism.

 

[Krizoitz]

Again, we are taking about gaming and Windows here, how is gaming doing on MacOS and apple's single app model in general for MacOS? Quite poorly I would say.

No we aren’t, we are talking about AppStores. Pay attention.

Regardless Apple is allowed to have gaming go poorly on their platforms if they want. There’s no law that says Apple has to prioritize gaming (nor should their be)

They can where the law allows it. Apple is not above the law and can't do whatever they want, nobody can.

I said SHOULD, so whatever the law is or isn’t doesn’t matter. We are discussing what SHOULD happen. Also, this may shock you, but laws can be wrong.

Or we have the option to create laws. Way better solution actually, if Apple doesn't like it, they can leave.

I hope they do. In fact I’d love it if Apple, Google, and the other so called “gatekeepers” all told the EU to pound sand and pulled out en masse. This whole law is about protectionism not helping consumers. If it was an actual fair law then Spotify would be the one regulated not Apple. Spotify has FAR more users of its service in the EU than Apple does but they aren’t being targeted. Why? Because Spotify is a European company. That’s it. That’s the only reason. It’s not now nor has it ever been about helping consumers.

We will have more option actually, only apple won't have the same authoritarian control and won't be able to arbitrarily push developers around with their army of fans behind them, defending them no matter what.

There is nothing authoritarian about what Apple is doing. No user is forced to buy their products. No developer is forced to make an app for them. It’s 100% voluntary. If users or developers don’t like the terms they are free to go elsewhere. That’s how it should be. As long as there is a viable alternative (and there is it’s called Android and in EU it’s the large majority). Stop using words you don’t know the meaning of.

 

[Abazigal]

Just wondering - does the Xbox allow other game streaming apps on their platform, and would Microsoft be fine with not charging them 30%?

 

[tobybrut]

There ISN'T app sale/access competition in a significant (iOS) portion of the mobile app market when Apple’s App Store is the only option.

To me, competition should exist between apps, not App Stores. There’s very little to be gained and a lot to lose by introducing multiple App Stores. We want app competition, of which we already have. It’s not App Stores that make me productive. It’s apps.

 

[webkit]

So buy an Android if that’s what you want. Again you already have that choice.

So, you are saying that the only reason anyone could possibly want an iPhone is because of its "walled garden"? It has no other benefits or value to customers? Build quality, integration with other Apple devices, Apple exclusive apps or features, etc. are all useless?

First you can’t gaurentee that. You know what does gaurentee it? The iPhone continuing to have only one AppStore, which is what many of us want.

No one can guarantee anything but given that the App Store would remain the leading "go to" source for iOS apps, few developers would choose to leave. Therefore, those who still want to use only one store would still be able to do so and those who want CHOICE would have that option.

If you don’t fine, get a phone that does. An Android. They already exist. You have many of them to choose from.

Again, are you saying that the iPhone's only benefit is the "walled garden"? It is otherwise identical to Android-based phones? All of the other iPhone "stuff" is meaningless?

 

[webkit]

To me, competition should exist between apps, not App Stores. There’s very little to be gained and a lot to lose by introducing multiple App Stores. We want app competition, of which we already have. It’s not App Stores that make me productive. It’s apps.

Competition should exist between apps AND app stores just as competition exists not just between snack food companies but also grocery stores, not just apparel manufacturers but also department stores, not just appliance manufacturers but also home improvement/appliance stores, etc.

 

[mrochester]

So, you are saying that the only reason anyone could possibly want an iPhone is because of its "walled garden"? It has no other benefits or value to customers? Build quality, integration with other Apple devices, Apple exclusive apps or features, etc. are all useless?




No one can guarantee anything but given that the App Store would remain the leading "go to" source for iOS apps, few developers would choose to leave. Therefore, those who still want to use only one store would still be able to do so and those who want CHOICE would have that option.




Again, are you saying that the iPhone's only benefit is the "walled garden"? It is otherwise identical to Android-based phones? All of the other iPhone "stuff" is meaningless?

Why would you want to use more than one store if every app you want is available in that store?

 

[grkm3]

Dude right....! My Landlord's rent seeking behavior has to stop too..! Who are they to charge me for using the apartment they built and maintain!

Plus, Microsoft's cloud segment had 111.6 billion in revenue for 2023, i think they will be fine...

Does your landlord make you pay for your utilities through his rent and add 30% fee on it?