Apple taking advantage of App Store

Apple who owns and runs the Apple Store that is within all of its products accumulates at least $15 Billion in sales. Recently, many people have been taking notice of the way Apple is pushing its consumers to use in game purchases, so why is it that this trillion dollar company is doing so and facing backlash? It is simply because Apple is taking 30% of paid apps and in game purchases. If it wasn’t noticeable this is an extremely excessive number and there are many companies who rely on their app in game purchases as their main source of income. The issue is that there is no other way to go about getting apps out to the public without going through the App Store. the App Store has a complete monopoly through Apple products. There is nothing these companies can do but to give up 30% for every purchase.

We have been watching Epic Games try and take a stand against Apple, and it is pretty interesting seeing all of this play out. For those who don’t know, Epic Games is the creator of the popular game Fortnite. Fortnite is a free game that relies on their in game purchases for revenue, for every single purchase someone makes Apple takes 30% of each. Fortnite stood up for themselves and offered a new direct payment in their game so they would avoid the Apple charge. Apple found this out and immediately took Fortnite off of the App Store. Epic Games and their fans took offense and started to boycott Apple. Last I have checked, Epic Games was filing a lawsuit to Apple because “it positions its anti-trust argument by saying that Apple has a monopoly over IOS distribution. The antitrust arguments for every big tech company tends to hinge on some question of market definition”. There are of course alternatives to get around this like switching to Samsung but Apple accounts for a majority of all mobile app revenue in the U.S.. For the sake of Apple keeping a close relationship with app companies, let’s hope they attempt to reduce the cut they take.

source: https://www.theverge.com/2020/8/14/21368504/fortnite-apple-google-app-store-brief-incomplete-timeline

18 thoughts on “Apple taking advantage of App Store

  1. I am very interested in how this is going to turn out because I think Apple knows that they can get away with a lot of things and people will get mad but then forget about it soon after. For example apple switching from usb connections to the other type. This makes everyone either only have one type of chord or buy an apple adapter. And everyone knows that prices that apple puts out for the accessories or always super high. For example a multiport adapter is $70.
    https://www.apple.com/shop/mac/mac-accessories/power-cables?fh=4595%2B4891

  2. Apple is known for keeping their customers stuck to their services. I think it makes sense that they only let iPhone users download from Apple store, but it is really unfair to take that much percentage from the app creators. However, this is also an issue with Android phones that even though are easier to get access to other services than Google App, is still “stuck” at a certain level to use the App Store by Google. This is an issue that will just become more relevant with time, as the number of developers and users increase. In the beginning of the smart phone usage this wouldn’t be such a big deal but now that there are billions of users, it is clear that it needs to change somehow. This also applies to other things in the technology world, and we will see with time how things will change from now.

    SOurce: https://www.nytimes.com/2020/08/14/technology/apple-app-store-epic-games-fortnite.html

  3. I think this issue has more to do with Apple having complete control over the entire market on IOS without competition. On computers, there are many gaming stores like Steam, Origin, Epic Games Store, Battle.net, Microsoft Store (Xbox), and more that offer plenty of competition on gaming computers. However, on an iPhone, developers can only release their products on the App Store. Many softwares on computers have different pros and cons like better software, smaller revenue cuts, and other features that will benefit developers. A lot of softwares take a 30% cut of revenue on sales, but the difference is there is competition and a choice for developers. They can choose if they want to release their game on a software that takes a low cut of revenue, or release their game on a software that takes a larger cut but also will get the developers more sales. Apple doesn’t allow competition on their platform which is not good. Apple has held back companies like Spotify from innovating their software on iPhones and Spotify does not allow purchases from the App Store to avoid Apple’s 30% cut.

  4. It is understandable for Apple to take a percentage of the portion from games and applications that are published on their AppStore. But this 30 percent number is extremely excessive and there needs to be something done about it or they will continue to do this as it makes them a large sum of money each year. I did not agree with how Epic had handled things with breaching contracts to get a point across with many other methods effectively getting the point across without doing something technically Illegal. I am intrigued by how this will be handled in court with Epic being so apt to create a lawsuit and have this meticulous plan for how they are going to settle things. This lawsuit could come out in Epic’s favour and completely change how the industry of Apps is taken with how much is taken out of every purchase to go to Apple.

  5. This was really interesting to read about. I never knew that Apple took 30% of the gaming revenue. I think that this is a normal procedure when someone is making a purchase though a distributor. When I was reading this, I thought of a different example, a musician with a record label. When the artist releases music through their label, the label usually takes 15-20% of the money. That is similar to the game makers selling their game through Apple to get to consumers. However, I think 30% is a lot of money to be taking away from the creators. I also understand where EpicGames is coming from in their lawsuit. Apple does have a monopoly on this industry and show lower their fees.

  6. Apple was sued by a lot of companies due to its subscription rules. Recently, Apple has also received antitrust complaints in the European Union. Big major Media also advocate investigating the Apple App Store. In May of this year, Apple launched a new website in response to criticism of its App Store model. They said that safety and quality are the main purposes. So far, regulators have kept one eye closed, but recent news shows that the situation may change as the Federal Trade Commission begins to investigate monopolies in the technology industry more frequently. Unless we all speak out for change, nothing will change except that our wallets will become more and more deflated.

  7. As somewhat of a mobile gamer myself, Im actually surprised I wasn’t aware of the scale of profits the app store took from game and app developers. On one side, I can see how they may take the profits of paid apps, as no company can just offer free distribution. Its one in the same with physical products being sold in brick and mortar, as the stores inherently take some of the profit from these products. As well, apart from development, applications dont have any production cost, as its just a piece of software. There is no machinery or distribution costs necessary to sell a piece of software other than in this fashion, so naturally it makes sense that a piece of this profit may be cut off for the benefit of apple.

    I am however not a fan of the in-app purchase profit cut. While I understand the reasoning behind it, the low profit margins from selling apps in the first place makes it hard for developers to make money. Many apps are also free, so these purchases are their only compensation for the development of the app. Id be interested to see how these “monopoly” lawsuits play out. I understand that technically yes, it is a monopoly, but at the same time, users have alternative choices, i.e. android and such.

  8. I think this situation is very normal. I once used the android system before. The price between the android system and ios system is also different.

    I still remember two years before I was buying a game apple which cost me about 10 dollars to install it through the app. However, my friend had a Huawei. The game install on his phone is only 8 dollars. So, I did the research on it that Apple will take a service fee from every install.

    Also, people are doing research on the price between apple’s app store and an android user’s app store. The result is ” recent reports indicate that on average iOS apps make 80% more money than their Android counterparts”. So, the price of the app in the ios system is way expensive than the price in another smartphone which I think it is very ridiculous. Including this year, Apple is saying they are not giving the charger because they focus on recycling and sustainability which I think is very ridiculous as well. Because the user of the iPhone12 or higher will have to pay more to buy the charger which let me feels like they are trying to earn every penny from their customer.

    https://fueled.com/blog/app-store-vs-google-play/

  9. I think criticism of Apple for its 30% cut is fair, but from a business perspective, it is easy to understand. The Apple App Store is an IOS only app manager that vets the apps for malware, ransomware, or other security risks. If Apple is putting its resources into verifying apps and developers on the App Store, why shouldn’t they receive a portion of in-app purchases? In-app purchases provide more money for the app developers and Apple because there is a constant reason for spending money on one game, instead of paying a one-time fee to get the game in the first place. By pushing for this, Apple is trying to put people in a more lucrative market. 30% of the purchases simply sounds like an Apple tax. Everything at Apple has a higher than preferred markup, and that is mainly because of the brand name that everything associated with it carries. I am not a fan of the monopoly argument because the App Store is solely for Apple devices, so they have a right to make sure their devices are not being hacked. You could relate this to the Microsoft Store on Xbox or other Microsoft devices or the PlayStation Store on the PlayStation. It makes sense to have exclusive stores because that suits the mental models.

  10. I remember hearing about this for the first time and thinking this was crazy. The more I look into Apple and its products I feel as if they are trying every possible way in order to make a dollar. This is a crazy percentage that is taken out of the money that the company made, especially since Apple is so popular all over the world, many companies have to go through them in order to bring awareness to their product. There a previous post that talks about the new iPhone having the charger come separately which makes it look like they are being greedy.

  11. Reading about this was very interesting. I never knew that Apple took profit off of the Applications being bought. In ways, I think that Apple has a right to take some cut of the sales because they are the providing the platform to sell the app. However, I do not think that the company should be taking 30%. Apple pulls in enough revenue already, I think cutting the amount they take should be cut down to maybe 5%. The main reason why I think that Apple takes 30% of the sales is because of supply and demand. Apple’s App Store is where most people by the applications for their phone, so companies want to have their application for sale on here. Therefor, Apple knows that they can take a cut because the demand is so high on the App Store.
    When looking more into this topic of Fortnite and the App Store, I learned that Fornite wants Apple to completely take away the 30% cut. I also learned that Fortnite wants to generate its own App Store within the Apple App Store. I think that if Fortnite is going to create their own App Store on Apple’s platform, Apple should make some profit off of the revenue.
    Source :https://www.nytimes.com/2020/10/09/technology/apple-fortnite-app-store.html#:~:text=Fortnite's%20parent%20company%2C%20Epic%20Games,Store%20and%20will%20stay%20banned.

  12. Although I had heard of this Epic Games and Apple feud a month or so ago, I did not realize how large of an impact it had on both companies and how passionate they both are on this issue. After looking at both side’s perspectives, I am still not able to make a decision with there being good reasoning from both Apple and Epic Games sides. Epic Games CEO said on Twitter, “What’s most disturbing about Apple’s position is that they seem to truly believe they ‘own’ all commerce involving phones they make, characterizing direct payment as theft, smuggling, and even shoplifting. It’s a crazy, misguided view.” With this comes the argument that just because Apple sold a phone does not give it the right to tax and control the person who bought the phone. Epic has created a #FreeFortnite campaign against Google and Apple but more recently US District Judge Yvonne Gonzales Rogers did not grant an injunction that could allow Fortnite to be unblocked on App Store.

    More recently, it seems that Epic Games is not the only video game company that Apple is having issues with. Facebook Games launched recently as a cloud service offering titles such as Asphalt 9 that boot up directly from the social network for Android users is not on iOS devices. Vice president of Play Jason Rubin tweeted yesterday saying that Apple had shot down multiple requests of approval of its iOS cloud concepts. While Apple has not responded, it seems like everything will be sorted out by the end of the upcoming trial during late 2021.

    Source: https://gadgets.ndtv.com/games/news/apple-epic-games-lawsuit-fortnite-app-store-ban-facebook-games-ios-access-2316557

  13. I never knew this until now. It is interesting to see the certain steps that Apple takes which allows them to be such a wealthy company. There are so many applications out there that implement in app purchases, and so Apple is profiting greatly off of them. Though, I do think this is a little unfair, as it already cost the company money to keep the app on the app store. So taking a portion their in-app purchases money seems a little excessive. However, you also have to account for Apple providing a platform for these company’s/developers to get their games out there to the public. The Apple app store is definitely more popular than Android’s app store, so Apple knows that many of these company would likely lose out on even more money by pulling out their apps from their store.

    I think they should negotiate and maybe cut the profit from in-app purchases they take in half, from 30% to 15%. This seems a little more fair, since some of these companies need as much of their profit as they can get to continue to grow. Obviously, this is a tough issue since Apple will be losing out on a lot of money too if they cut their takings in half. However, I think it is more deserved for the company that developed the app, since they were the ones who made it so they should be able to keep most, if not all of the profit they get from in-app purchases.

    Source: https://www.nytimes.com/2020/08/14/technology/apple-app-store-epic-games-fortnite.html

  14. I did not realize that Apple profits off in-app purchases, which have nothing to do with Apple. It is a smart business move to charge app company’s 30% of in-app purchases. I believe Apple does this because they have the population demand and the largest distribution store for apps. If an app company, Epic Games for example, wants their app to be available to the most possible customers and sell their app for free, Apple has competitive advantage in distribution of apps to customers. Epic Games changed the gaming industry solely by the fact that the game is free, but profited greatly off in-app purchases. While Apple has removed Fortnite for their stand against Apples 30% policy, i believe it doesn’t hurt Epic Games as much as it would hurt other app companies. Epic Games profits most from gaming consoles. Whereas, for example, if Rovio Entertainment, the app company that created Angry Birds, was removed from the app store, i guarantee you that Angry Birds never would have been able to become popular enough to get a movie based on the game.

    https://www.nytimes.com/2020/10/09/technology/apple-fortnite-app-store.html

  15. This is really interesting to me, I did not know Apple was taking such a big percentage of the money off the apps. This is extremely unfair to companies making the apps because they don’t really have a choice unless they just want to put the app on Samsung, but Apple is obviously much bigger and the app being on their store would give it more exposure. I agree with EpicGames doing this and filing a lawsuit against Apple because they are acting like a monopoly and taking way too much money. EpicGames has the ability to do this compared to other companies because Fortnite blew up and was bringing them huge amounts of money of consoles, so they were in the position to take this stand because they already had tons of money. They are doing the right thing not only for themselves, but for all the smaller app companies that can’t do this because they need the money, even if it is only 70% of what it should be.

  16. I can understand Apple taking a small percentage of app purchases made through the app store, but 30% is extremely excessive. Furthermore, it is unfair to the apps who rely on this as their main source of income, as you stated above. I believe Fortnite does have a right to file a lawsuit, because after all, it is a game that they created. Apple should not be reaping the in-game benefits because they did not create the app. This article by CNN explains all of the details involved in this lawsuit Epic Games is filing against Apple.
    https://www.cnn.com/2020/09/28/tech/apple-fortnite-epic-hearing/index.html

    Personally, I think that Epic Games has a case and could potentially win this lawsuit, but Apple should offer taking a lower percentage of income to protect their reputation. This could lead to Epic Games supporters switching to Samsung devices if they are that passionate about the games Epic Games owns.

  17. I understand why Apple takes a cut of the money that apps, after all they are providing a place for people to download their apps, but 30% is insane. They do have a monopoly on this because there is no other way to download apps without the app store. It was good of epic games to stand up because they should not lose almost a third of the profit they make. Fortnite brings in a lot of money so this is giving Apple a good chunk of money for not doing anything. However Apple is saying that Epic broke their contract by doing this. It will be interesting to see how this turns out.
    https://www.theverge.com/2020/10/24/21531873/epic-apple-fortnite-app-store-lawsuit

  18. Taking a 30% cut of sales is insane for a company that already ears as much as apple does. I see the reasoning behind why they take a cut, because they are the ones providing the service to host their app on the app store, but denying any other company from making a way to host their apps is insane. If apple does not allow any other ways to download apps other than their app store, I think they should minimize or even entirely remove the cut that they take out of in game purchases. Another aspect that adds to the insanity of this is the fact that you need to pay an annual fee to even host apps on their app store. So you not only lose revenue generated by your game, you also need to pay apple just so people can download your app on apple products.

    Sources:
    https://developer.apple.com/forums/thread/76587#:~:text=Replies,anything%20for%20a%20free%20app.&text=An%20Individual%20Developer%20Account%2C%20required,separate%20'hosting'%20fees%20otherwise.

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