The point here is Microsoft and Sony have exactly the same closed ecosystem. Apple ( and sony etc ) can do exactly what they want as they created the hardware and platform.
As an old School developer - you’d be beaming if you made 30% profit! Let alone 70% that apple gives ( now 85%!! for smaller devs ) the costs of cd/dvd copying / marketing and retail cuts..
Analogy Alert: Apple opens a mall make it really successful and developers open up shops in said mall and make a load of money - paying apple for utility costs and rent in the mall. Epic comes along and demands to be allowed to open a market in the mall for free.
This is like someone demanding to make Tesla’s screen open source.
Forget Epic... off they pop and sell their $10 skins to kids and lets see them develop a phone and the infrastructure.
I really like this post, it makes a lot of sense. But I think we need to tweak the analogy to better fit the current scenario.
Apple opens a mall, and they make it really successful. Developers opens shops in the mall, and make a lot of money. But as part of being in the mall, they have to give the mall owner a slice of the profits in exchange for free rent. All good.
However, in the real world, there are other malls that consumers frequent on a regular basis. Think about it, how often do you visit Amazon
and Target/Walmart? If McDonald's and Panera are located in
two different strip malls/plazas across the street, would you only visit one and not the other? Or would you eat at both restaurants because you like their food, regardless of location? Most consumers don't tie themselves to one particular store or location - they move around. Point being, there are other venues retailers (aka developers) can go if they don't like the mall's terms and they can be confident that they will still get consumers.
This is not so on iOS. There is only one App Store on iOS, as far I can tell. If I want to buy apps from a different store on iOS, where can I go?
Now, some may say but wait! There are other devices, such as Android, Xbox, Playstation, Switch etc. that developers/consumers can use if they don't like Apple's terms. This is precisely Apple's argument. They view the
hardware as the primary market. Epic's argument is the
software, not the hardware, is the primary market. That is, within iOS itself, where can you go to buy apps?
One justification for Epic's claim is the high switching cost of hardware - how often do you buy a different smartphone when you go out to eat (aka switch locations)? I don't know about you, but I only buy a smartphone maybe once every two years. Definitely not as often as I eat out, and certainly not every day (although buying a new smartphone on a daily basis would be sweeeeet).
A counter argument would be that the other vendors charge the same rates as Apple, so Apple is being competitive, even within their own ecosystem. But as the lawyers pointed out, who set the rate for the industry (I'll give you a hint, their name rhymes with Snapple)? The counter claim doesn't hold water if the person arguing it created the situation to begin with (aka, I start a trend of shouting "Fire!" in a movie theatre. Everyone else does it. Just because everyone else does it, doesn't make it ok. And because I started it,
really doesn't make it ok).
So you see, it really all depends on what you view as the market. As an economist, you will find very knowledgable and talented people within my field who are deeply divergent on this issue (indeed, both Apple and Epic have their own expert witnesses, saying very different things). Because at the end of the day, it's a judgement call. And that's why both parties are going to court. To get a judgement from YGR. It's up to her, and the appeals courts, and maybe even the US Supreme Court, to see how it all plays out. Neither side is right or wrong, it's just the way the world works out.
I suspect we'll see new legislation arise in the EU/US as governments seek to define the playing ground, making it less ambiguous and easier to judges to make their calls.
It will be fun to see how this all plays out.
