back to article Revenues from in-app purchases swelled 32% to almost $30bn for Q3 2020 – and Apple snaffled most of it

Consumer spending within mobile apps surged in the third quarter of 2020, according to a new report from app analytics house Sensor Tower. App revenues hit $29.3bn in the period, up 32 per cent year-on-year. Roughly two-thirds of all in-app economic activity came from Apple's App Store, with the remaining third belonging to …

  1. goldcd

    Jeesus

    So 30 billion and apple took 2/3rds.

    Then took 1/3 of the 20 billion... I mean I'm sure it's a ton of work managing an app-store, but.. that's a lot of 'free' money.

    1. DS999 Silver badge

      Re: Jeesus

      If you look at their financials, their costs for operating the app store are about 1/3 of their revenue. So 20% of the 30% they collect is profit, the rest is expense.

      To people who say that's too high, what do you think they should be limited to? What margins do you think Playstation or Xbox games should be limited to (they collect money on every game sold via licensing fees) or stuff sold at Walmart or Amazon should be limited to?

      1. David 164

        Re: Jeesus

        If we take retail as a example, Tesco has a profit margin of around 6%. Many smaller retailers operate at a lower revenue margin than that.

        1. DS999 Silver badge

          Re: Jeesus

          Profit margin is not the same as retail markup. Apple/Google collects 30% of the revenue from the App/Play Store but doesn't profit by 30%. If Tesco is like most brick and mortar retailers they are marking up retail prices at least 50%, so the wholesaler gets maybe 40% instead of 70% app authors do (obviously a lot goes to stuff like rent, checkout counter employees, loss from theft etc.)

          Back when software was shrink wrapped in stores the actual author might collect only 10%, with the retailer grabbing 70% and the distributor (the one who ran off the CDs, shipped them to stores etc.) would get the remaining 20%.

          I was that application author once long ago, I would have LOVED to get even 30% let alone 70% of the retail sales of my application! Individual app authors have no idea how good they have it today. Those working for a big company like Epic probably won't share in the windfall if they are successful in making Apple take a smaller share, it will go in the owner's (China's Tencent owns a big chunk of it) pockets instead.

        2. iron Silver badge

          Re: Jeesus

          HAHAHA. Supermarkets are not representative of other retail stores who often have mark-up of 100% or more. Back in the 90s I worked in a local record store and my flatmate worked in Virgin Records, we had mark-up in the 50 - 150% range but Virgin not only paid less than us for the same goods and charged more but if a delivery of say 100x Oasis CDs came in there would be 200 in the box but the invoice said 100 and they were charged for 100!

  2. Ashto5

    10%

    Companies should only be allowed to make 10% profit.

    Any more is exploiting markets.

    1. Anonymous Coward
      Anonymous Coward

      Re: 10%

      @Ashto5

      Bollocks. As long as it is not your own company eh?

      I would not get out of bed to have a shit for only 10% profit.

      Cheers… Ishy

      1. I ain't Spartacus Gold badge
        Happy

        Re: 10%

        I would not get out of bed to have a shit for only 10% profit.

        idiottaxpayerhere,

        I'm intrigued. What is your shit made of? Obviously if you're pooing diamonds then the pain is going to be quite high, and you would clearly deserve very high profit margins. But if your poo is only made of Nutella - then I feel that 10% profit is more than you deserve. I'm presuming that's how they make Nutella? Feed hazlenuts to people and harvest their poo?

        Although I feel you should reconsider your financial decisions. Cleaning materials are expensive - so not leaving the bed in order to shit has costs. And 10% profit is not to be sneezed at. Especially while passing sharp objects like diamonds...

    2. gnasher729 Silver badge

      Re: 10%

      Companies should not allow more than 10 percent profits. Surely this applies to Epic, which made 70% profit on in-app purchases and 100% on purchases in their website.

      1. DS999 Silver badge

        Re: 10%

        Since "in game items/money" or whatever it is you are buying from Epic costs them $0 to "make" they should give it away for free, right? Charging even a single penny for it is 100% profit for them, and Ashto5 thinks they should be limited to 10%.

    3. Nonymous Crowd Nerd

      Re: 10%

      Well, yes. But 10% of what and who gets it?

      In fact the digital sales taxes that the European governments are looking to introduce on the FAANG companies - and a few more - are rather like this. Countries are deciding that companies are to be included based on global turnover (revenue). The system is grossly simplistic, but the bottom line is that for these exceptionally global organisations with plenty of monopolistic power, we absolutely have to do something. And the international taxation arrangements that these companies have effectively bypassed are riven with complexity.

      Anybody looking to knock any of these suggestions needs to remember

      1. We have to do something.

      2. It must be simple.

      3. It must be possible for countries to impose the new regime unilaterally, otherwise the likes of Ireland and

      Luxembourg will veto everything to protect their own ill-gotten gains.

  3. Anonymous Coward
    Anonymous Coward

    In App purchases

    I always avoid those Apps.

    Pay once, use for life.

    1. DS999 Silver badge

      Re: In App purchases

      Companies have found they can get people to pay more in the long run by giving the apps away for free and charging again and again for stuff, stopping ads, adding features so the app actually does something useful beyond minimal functionality, etc.

      Imagine if back in the day Microsoft Office was free, but you had to pay for spreadsheet calculations so when you ran out you'd have to buy more from Microsoft. You had to pay per slide for PowerPoint, so after every 100 slides you created you had to buy the ability to create more, and so on. That's kind of how a lot of the app world is these days, especially games. Is it any wonder Apple & Google want a cut of "in app purchases"?

  4. cb7

    Wait, so what happens if you sign up to YouTube Premium on your PC and then sign in with the same ID on your iPad?

  5. IGotOut Silver badge

    Apple vs Google.

    I own both Andriod and Apple devices, yet have never bought anything via Google Play (have given F-droid devs money).

    I don't know if it's me, but I just don't want to give my card details to Google, I don't trust them not to track and flog the info.

    If I had to buy a must-have off Goggle, I'd buy a gift card from a supermarket.

  6. alpine

    Confirmation that Apple customers are thickos.

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