As Epic attacks Apple and Google, it ignores the same problems on consoles
arstechnica.com
arstechnica.com
Firstly, they have done absolutely zero of the work needed to make the platform into the giant international success that it is.
And secondly - they are complaining about making insufficient profits from FortNite, which is an addictive video game which makes its money from selling in-game currency to children.
When we compare the value that Apple has added to the world by building the App Store ecosystem, to the value that these in-game purchases are adding to the world, and for which they are claiming they should be able to profit more from, it’s hard to make the case that Epic is somehow being deprived of some just reward for their contribution.
I don’t think it’s wrong for Epic to be able to do business the way they do.
But clearly there is no moral case to be made for the claim that Epic has better business practices than Apple or they they are some kind of victim here.
It took more than a decade for the iPhone to get to where it has - longer if you consider the iPod as the foundation of the success the iPhone continued.
Given the giant inflows of cash they are receiving there is no reason why Epic couldn’t start building their own platform.
Console makers have proven that this is a profitable business, and we are about to see a wave of think client devices that play streaming games. Apple is clearly vulnerable to disruption in the gaming space.
If Epic wants a platform, they can build one, and it will take a similar amount of work to what it took Apple.
They can't build a sales platform on the iPhone if Apple won't give them the opportunity on the iPhone.
Epic is a publishing company that has made billions, and rather than investing that in building anything new, they are just seeking to increase their cut.
Also, Apple's stance on iOS is radically different from their stance on MacOS where we do have an App Store managed by Apple but customers are free to install apps outside of it.
Epic is the one that's done the work to create and build something new. Why should Apple have to right to charge 30% because they own the hardware business?
Epic also charges people to use their software platform.
Unreal engine costs money for developers to license.
Why shouldn’t Apple be able to charge developers for their platform when Epic can?
Very few are making the argument that that Apple shouldn't be able to charge developers for the App Store platform - so long as there are other ways to install applications on iOS devices that don't require going through the App Store.
The situation with Epic is different because even though Epic charges for the use of its software platform on PC it does not have the _only_ software platform for game distribution that can run on the PC. Off the top of my head, there is Steam, Origin, Humble, GOG, Battle.net, and XBox Games for PC as well as developers being able to directly distribute their games without using any third party software platform.
Epic and other developers wouldn't have a problem with Apple charging for inclusion on the iOS App Store if there were other ways to install applications that didn't involve jailbreaking the device first - either a first-class-citizen sideloading capability for the end user or the ability for third-party app stores to run on iOS. Apple wouldn't be required include any other app store by default or even advertise that the feature is present if they didn't want to - they can leave all of the marketing and support up to whoever uses that facility.
But in any case this argument isn’t sound: if you make the case that people should be able to run their own Store then you are making the case that Apple shouldn’t be able to charge for the platform.
The platform is not just the storefront user interface. It requires investment at every level from the silicon upwards.
Google specifically stepped in and had OnePlus cancel a deal with Epic which would have allowed their sideloaded app to be included by default with their phones. They also prevent other companies from making such a deal with Epic.
Epic also tried to sideload the app at first but the OS specifically warns you that it can steal your information and heavily discourages users. That's fine in a general sense but it's not possible to get whitelisted nor is it possible for users to get automatic updates after going through it once. And when they do get an update, they have to go through the same bs again each and every time.
Epic is the reason that iOS is a gaming megahouse today.
Infinity Blade, i.e., the game that Apple itself used to demonstrate the iPhone's gaming abilities, was created using Unreal Engine. Epic provided a substantial amount of assistance to the developer to get the game made.
But clearly there is no moral case to be made for the claim that Epic has better business practices than Apple or they they are some kind of victim here.
Apple has done none of the work of creating the billions of $$$ in valuable apps. Why do they get to claim 30% of that? There's a term for that: rent-seeking. (Also, greed, if you want the moral term.)
Epic has been kicked out of Android as well, and as this Ars Technica article shows, they are more than happy to pay XBox tax.
Is that really accurate? Android supports sideloading, which I think is how they first brought Fortnite to Android. They might have been kicked out of the Google Play store, but that's not the same thing.
Apple is today putting more effort into developing their software platform than anyone in history.
If they stopped doing that - how long do you think it would take for Google, or frankly any number of other players, to eat their lunch?
They continue to be in the leadership position because they are continuing to innovate as fast as they can.
Not because they somehow ‘own’ the position.
And frankly the amount of effort that is going into developing the platform is immense.
Every part of the platform contributes to its success. Fitness tracking, the watch, the massive investment in APIs, Accessivility, dealing with supply chains, governments geopolitical risks, etc. etc.
All of these things are why the platform has the reach it has today. Each one contributes to more people choosing the device and a larger addressable market for developers.
I’m delighted to let them take 30% for all this, because I didn’t have to do any of it.
Neither did Epic.
It is literally the definition of rent-seeking: "when an entity seeks to gain added wealth without any reciprocal contribution of productivity." Apple isn't making the games, or even the engine. It's just extracting money from the developers that are making the games.
Apple is today putting more effort into developing their software platform than anyone in history.
True, because Apple won't let anyone else develop their software platform. By that token, Google is putting more effort into developing their software platform than anyone in history, and so is Microsoft, and so is Epic.
For comparison: Apple also puts a lot of effort into MacOS, and MS into Windows, but developers can sell games there without Apple taking 30% off the top.
If they stopped doing that - how long do you think it would take for Google, or frankly any number of other players, to eat their lunch?
This is irrelevant to the question of rent-seeking behavior.
They continue to be in the leadership position because they are continuing to innovate as fast as they can.
Apple is not the most common smartphone in the world, or even the Western world. It is simply the most profitable...because of the aforementioned rent-seeking.
Every part of the platform contributes to its success. Fitness tracking, the watch, the massive investment in APIs, Accessivility, dealing with supply chains, governments geopolitical risks, etc. etc.
All of which were first developed by third parties...Apple only began working on those products after third parties proved the market demand existed.
I’m delighted to let them take 30% for all this, because I didn’t have to do any of it. Wow. Just wow.
Neither did Epic.
Epic is the reason people even think of iPhone as a gaming platform today. Not Apple. Epic.
You say the things I mentioned are things that other people had already started working on.
That may be true, but even so. Unless you are saying that Apple stole their code, you have actually agreed that Apple did contribute these things.
Therefore by your definition this is not rent seeking.
Epic is not the reason the iPhone is a gaming platform.
Claiming this to be the case completely dismisses the work of thousands of other developers who popularized touch based gaming - many of them indies, all using the platform and tools Apple developed.
And as I point out elsewhere - Epic had technical help and enormous marketing help with infinity blade from Apple, and they weren’t even the developer.
They are just a middleman, not dissimilar to a record label. If anyone is rent-seeking it is Epic, who just want a bigger cut of the action.
Not only that by Apple marketed the hell out of Infinity blade, and provided development assistance of their own, and Epic received the benefits.
Furthermore, as you point out, Epic wasn’t actually the developer of Infinity Blade.
Why should they get to ‘rent seek’ on the work of other developers?
Charging 30% is outrageous.
The other problem is that Apple won't allow anyone to buy an app store for the iPhone.
Is the value too steep? Idk, how does supply and demand work? Why do people develop for the market if the cut is slow large.
That said, people would be still complaining if Apple's cut was only 10%. People complain about the 3-5% that payment processors charge retailers. People complain about the $.35 Arco gas stations charge for using a debit card. People complain about the dime grocery stores charge for paper bags in California.
How much do developers spend on Apple's iOS SDK? Zero. Would it be better if the 30% was shifted to a license fee for the SDK? Would the politburo accept those terms?
An App Store without competing stores and payment systems ultimately hurts the consumer, because Apple is not forced to compete on quality and price.
As someone who paid for and owns the hardware, I should not be in any way inconvenienced in my ability to choose what to install on it. Apple is only part of the equation of what makes the iPhone great. 3rd party apps are the other part, and today, is the more important part.
> An App Store without competing stores and payment systems ultimately hurts the consumer, because Apple is not forced to compete on quality and price.
Apple, as a payment processor, shouldn't have to compete on price on the App Store. The fees from the App Store/IAP subsidise other operations. If they were competing solely as a payment processor it'd be impossible to charge more than 3% frankly, so they'd have to hike up prices elsewhere to make up the loss. App Store payments accounted for 6% of their 2019 revenue. I think Apple is entitled to decide on the pricing structure to fund its operations. There's only a competition issue when it comes to Spotify v Apple Music, or Netflix v TV+, or other competing products.
That said, 30% is a little ridiculous, imo, and it should be lower. Still, Apple isn't unique in charging merchants a %, which is done by many orgs from the Steam Store to the payment networks themselves, and fixed charges are even more common in many B2B situations.
They are competing with Android on both.
It’s pretty obvious what would have happened if Apple had simply stopped competing for even a few years.
Having multiple stores will simply increase the costs for developers, and make the user experience worse.
A bunch of publishing companies will compete for a slice of the action using all the normal marketing practices.
What will they contribute to the development of the platform? Nothing.