The usual doom and gloom FUD
'Our revenue-sharing model is designed to stop money laundering'
And think of the children! Our policies are protecting the orphans in South Africa [somehow]! And our App Store shelters errant whales, too!
Three weeks have passed since the high-stakes California bench trial between Epic Games and Apple commenced. On Monday, it was the turn of Phil Schiller, Apple Fellow and former senior VP of Worldwide Marketing, to take the stand. Schiller, who joined Apple in 1997 upon the return of Steve Jobs, re-emphasised Apple's argument …
Actually happened to me: I never use cards and only pay cash, but ran out of cash and had to use the card once.
And what happened? 2 days later spotted two Apple iTunes purchases on my card. Ironic, since don't own a single thing Apple and would rather be boiled alive than ever purchase one.
When I reported the infraction to the card company I made sure to tell them the location, as it was the only place I actually used my [debit] card that year for a purchase. They should about as much interest in that information as watching paint dry.
And that's why fraud continues...
Well, I moved country so I ended up having to choose to "migrate" App Store location with as yet fully unknown side effects, or rely on iTunes cards bought by a local for me to put some money on the account.
Yes, I am unable to help Apple's management to their next couple of yachts because they limit credit cards to the country that your App Store is set to.
Needless to say, my interest in buying much and certainly any impulse buying was pretty much halted by that. From my financial perspective maybe a good idea (although I have a fairly good control over my spending habits :) ), from their perspective a lots opportunity, and evidence that they still haven't quite grasped the way things work in Europe. We have open borders for a reason and I have been actively toying with the idea of asking the EU if this is not an unreasonable restriction. I just don't have time for the entertainment that would kick oft yet, maybe later.
Schiller's statement is interesting in several ways:
"I proposed other commission levels even lower [than 15 per cent] and our finance and anti-fraud team was pretty adamant that if we get much below 15 per cent, the rate of money laundering attempts will increase dramatically,"
In the first instance, having been told that it was unwise to go below 15%, Apple then decided to opt for 30%, or double the minimum recommended by their financial experts. Despite the fact that the App Store was originally positioned as being a not-for-profit system.
Seems like the sort of "monopolistic" decision Epic's lawyers should be jumping all over...
Equally, if in the highly unlikely event that I ever find myself with a wodge of undeclared cash which is large enough to need a quick wash, at least I now know what the going rate is likely to be at the cleaners!
30% is pretty much the standard commission for app & software stores. Same for Android, Steam, console stores, even physical media sellers like Amazon, & Best Buy. Even Humble is 25%.
Epic Store is the only one significantly below that at 12%. (Yeah, MS matched Epic, but so far only for the Windows Store ghost town; the Xbox store remains at 30%.)
Obviously there are differences in details: Google is more flexible about external payment methods, Steam gives a break at higher sales volumes, etc. Apple is generally a hardass, but even they recently gave a break to 15% for smaller developers.
Point is, a lot of the coverage of this suit has portrayed Apple's 30% take as a shocking outlier when it really isn't.
(amended to add: That said - Apple's "we're just fighting money-laundering" argument is patently rediculous)
Let us be generous and assume that this is true (although one would expect subsequent testimony from the people who allegedly declared that 30% is the necessary level)...
... none of this justifies the prohibition against using other purchasing channels.
(The rest of it is self-serving bullshit -- "we host a very expensive party, so you have to pay for it", "we're building nice digs that some of you will be able to use, so you all have to pay for it", etc -- which might play to a jury, but there is no jury here...)
none of this justifies the prohibition against using other purchasing channels
Technically, Apple doesn't prohibit developers from using other payment channels; they prohibit soliciting payment (aka "call to action") via outside channels from within an app.
The Android developer TOS also requires subscriptions, app purchases, and IAPs to use Google Play billing, but apparently Google is not as zealous about enforcement.
Good point: a good example is that the Kindle or Audible apps can use content that's bought through the web site(s), but the apps can't direct customers to the appropriate Amazon web page to buy, only the in-app Apple store mechanism.
As to Google, I'm holding no candle for them; if Apple does wrong and Google does the same thing, that doesn't make the Apple action right!
For the Google case, though, I suspect a lawyer could advance a case that while they _require_ Play, there is no explicit prohibition against other methods _as well_. The issue is that the language is fairly non-specific with things like "must use" which is different from "may not use anything except"! In support of this, Google prohibits the use of Play for certain types of transactions, so one could argue that other methods are explicitly contemplated. (Not a lawyer, myself, but I do believe that if an app offered the choice of Play or web based payments, it would be compliant with the text as written!)
> "Schiller also pointed to the expense of running WWDC, its annual developer jamboree, which he said costs $50m annually to run."
Taxing everyone who uses the app store 30% in order to subsidise an event that Apple intentionally loses money on? Surely then, the simple answer is have the WWDC tickets cost the appropriate amount in order to cover their costs. As they say, let the market decide if it's worth attending the event.
50m for one event, which is actually less than 40 million because the people that attend it pay a grand and a half apiece. Then take the fact that most of WWDC is marketing for apple hardware, so lets be super generous and say 75% of the content is of direct benefit to developers, the 99$ developer fee pays for that. On top of that they still pay Apple 30% of several billions of dollars in actual app store revenue. So back of the napkin, their math is off by 60 Billion or so.
I hate the way these people assume they can just throw some numbers up in the air and assume we will all just stop thinking and agree with them because numbers.
as for the money laundering tack, others already pointed out the 30% > 15% gaffe.
Cut the take down to 7-10% and spend 1 of the $$Billions$$ on Fraud detection. Or you know, actually give the developers something for their money like the book publishing world, were the publisher takes a huge cut because they also develop, promote, advertise, produce, warehouse, and ship the damn books, as well as accounting, and back office functions. They still take a pirates cut, but at least you can point a finger at the pile of stuff the actually do. Apple has made discovery in the app store terrible, offers a few procedurally generated categories, and has a tiny handful of staff that build glorified recommendation listicles. If one of the successfully apps is giving Apple tens of millions in revenue, do they get a dedicated marketing and promotion team?
I remember attending Microsoft events without any need 1) to pay an annual fee to write my applications 2) paying 30% of my revenues to Microsoft for each sales of my applications. And I didn't even use Microsoft tools to write those applications.
Apple does invest money to develop and sustain its products sales? Money for those events must come from those products sales, not from someone else's.
No, Microsoft uses a different model called "the first shot is free". They encourage you to develop on a platform you will not be able to walk away from once you've sunk enough into development - that's why they moved to a subscription model now.
After a couple of decades watching and working with Microsoft in various spheres I would definitely not hold them up as an exemplary company.
"Microsoft uses a different model called "the first shot is free". They encourage you to develop on a platform you will not be able to walk away from once you've sunk enough into development"
What? Isn't that basically everybody? Unless you develop your program in a platform-independent way, then you might find that you have high sunk costs if you want to abandon a platform but keep the program. Windows is no more like that than Mac OS or Android; it's not a Microsoft decision or plot.
The solution to that is to develop in a platform-independent way. Most of the time, you can do that as long as you planned to do so at the beginning. There are only a few platforms which make it harder, and Windows isn't one of them. You can quite easily use cross-platform utilities for your program which will run perfectly well on Windows. It's often harder to use those on IOS. I think your complaint is not only almost meaningless, but also applies better to Apple than it does to Microsoft. Not that it's a problem with Apple either.
The magic phrase you're looking for is "lock in".
That affects development because what you can develop for a platform that supports open standards is far more universally applicable than for a closed shop - and (going back to the original topic) allows you to swap one component for another that may be safer if the supplier cannot be asked to add some proper security to the framework.
It's to prevent money laundering. Definitely. They said not to go lower but I suggested it. This proves I'm a good guy. And that we didn't need to take that high commission to equal costs I mean no, not that, actually we lose money on it and we need that income. But also it's to prevent low-quality apps because developers would make and sell them to the money laundering people and have a nice time at WWDC having paid us only a couple grand because that's what we charged them. And also there are chips in our phones, very good chips, that we built and that needed money which we got from all the people we sold phones to because most of the expensive stuff is hardware-dependent. But people used it, so this means developers should pay us for their user's hardware, and all this has to do with the App Store payment percentage, trust me.
"Look. Either you stop spewing bullshit all over my courtroom or I'll instruct the bailiff to start clubbing you like a cheap pinata. The Truth, the whole Truth, and nothing but the Truth. Let's try again now, shall we?"
*The fucker opens his mouth to speak*
"Bailiff! It's PINATA TIME!"
Bailiff squealing like Gir as he draws his baton & rushes forward: "FINE-LEE!"
Witness stand: AAAaaaiiiieeeee!
Me: "Now THIS is entertainment! Where's my popcorn?"
Funny story there. A friend of mine once tried to get me to try some LSD. I refused & said my imagination was "too fucked up already all on it's own, it doesn't need any help." My friend scoffed & said I was full of shit. I made them lean back on their couch & pointed up at their ceiling.
"See the texture? How it's all lumpy & bumpy & nobby? Those aren't defects those are ripples. It's actually water. There are fish in your ceiling swimming under the painted surface. They'll occaisionally poke their heads out & look at the people below. They memorize what we look like when we're awake so they can then fuck with us in our sleep. That's what they're doing right now. Waiting. For you to go to sleep. So they can leap up out of the ceiling & fall down on your head. You wake up, think ''it's all just a dream'', then wonder how in the hell your head got wet. It's the fish, Man. It's the FISH! LOOK OUT! HERE COMES ONE NOW!"
I secretly licked my finger then touched him in the forehead with it as I said "Blorp" like a drop of water hitting home.
He screamed like a little girl stomping on a slug in bare feet.
"See? And I came up with that on the spur of the moment, off the top of my head, *while stone cold sober*. Do you _REALLY_ want me to take acid & get worse?"
My friend never tried to get me to take drugs ever again. He said I was too fucked up as it was.
What am I on? I'm Creatively Vindictive. If my imagination got any more potent, I'd make Steven King's nightmares look like orgasms in comparison.
*Hands you a pint & taps rims*
Drink up. My Kool Aid is full of dried frog pills. =-D
And then spout some R&D expenses that look like real money.
And then mention a public event sponsored by and in the only interest of Apple, which has fuck all to do with the 30% extortion rate of the Apple Store (and I don't care if Apple is not the only one, it's extortion, period).
Since you're full of
bullshitnumbers, how's about you give us the cost of actually running the Apple Store - which has no need of R&D - vs the returns you get from it ?
Yeah, fat chance, I know.
I have said and I maintain : 5% is more than enough.
The core problem is the duo of high fees and prohibited alternatives, so they literally prevent competition. If the WWDC and all that jazz is _worth_ paying 30% for, then let their developers decide and vote with their feet.
The more I think about the "money laundering" point, the more it seems probable that this is a pure hypothetical designed to justify a particular rate: the notion is that launderers will tolerate 10-15% (or whatever) loss in order to get clean money... so villain A buys 1,000 in-app "things" for $10 each, and villain B collects $10K less the fees, so $8K-$9K. But we're being asked to believe that _all_ villains won't do this if the fee is 30%, which seems a stretch.
Turning around, if the villains won't accept giving up a 30%, why should the non-villain developers...?
Casinos and betting shops are one of the major money laundering methods, and the loss there is considerably higher than 30%.
On some high streets half the people playing the slots are laundering. It's easy money and you're basically never going to get caught, after all.
Giving them the benefit of the doubt and assuming this wasn't made up a month ago, I wonder what money they're assuming people will launder? The only thing I can think of is that someone buys a gift card with stolen cash, then uses it on their account to buy a bunch of in-app items and collects the proceeds. That's not going to happen. What they do with the gift cards after stealing or scamming people out of the money for them is sell them to other people who assume they're legitimate. That way, there's no spike on specific accounts or purchases and they still get their money.
villain A buys 1,000 in-app "things" for $10 each, and villain B collects $10K less the fees, so $8K-$9K.
A bit of data analysis by Apple should root out villain A and villain B, due to villain A being a high spender on villain B's app. So no need for high commissions - the analytics should make it a no go area, at least for the big fish
It's a detriment to the developer, because Metal only exists on Apple devices.
So anything they do on the Metal they cannot use on anything else, raising yet more walls around the garden.
This is why there are projects such as MoltenVK and a host of shader translation tools, to allow GPU work to be ported onto Metal.
He might have had a valid point if Apple had instead put their effort behind a cross-platform API, but instead it's yet another brick in the wall.
"... which he claimed would prevent the App Store becoming swamped with spam or low-quality apps..."
As an ex-mobile game developer, it is clearly evident that this has failed spectacularly. Mobile "games" - which are the clear front-runner in the various types of apps available for mobile - tend to be low-quality shovelware, asset-flips and clones that rely on either milking their players for in-app purchases in order to make any reasonable progress, or bombarding them with adverts as often as humanly possible.
With the kind of revenue they're making, Apple could easily curate beyond the "paid"/"free with in-app purchases" split they currently employ. A huge step in the right direction would be for them to move away from the "one-size-fits-all" $99/year and 30% cut figures and instead create a scale that accounts for whether or not a game must be paid for in the first instance, whether it offers in-app purchases and what those purchases do, whether or not it displays ads and what triggers the display...
Restoring some sanity (and morals) to mobile gaming would go a long way towards re-establishing Apple's credibility.
Apple Arcade is a subscription service, which raises the question of how the app developers are paid.
I'm guessing that there must be some regulation in place to prevent the number of games included growing faster than the audience, so that Apple can cover the costs of paying the developers. It's a step in the right direction, but they can do a lot more.