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Comment by jmisavage | Hacker News Reader

Are they abusing market power though? 30% seems to be the standard rate for online stores. Google and Apple do it. Steam is 30%. And it’s been report that Sony, Microsoft, and Nintendo also take a 30% cut. Physical store such as GameStop, Best Buy, and Walmart take 30% too.

Epic only takes 12% which is great, but they’re also locking up games in exclusive deals which I think is way worse.

Edit: I pulled these numbers from IGN’s article. Although I’ve seen another report that matches the 30% in most places. https://www.ign.com/articles/2019/10/07/report-steams-30-cut...

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They’re also making a late push in a tight market without real differentiation (the exclusives like you said) so from a market standpoint it’s one of the last options. There’s legitimately no other reason to have that store installed other than having been forced to, so giving people a monetary break is kinda the least you could do.

To me the difference is when it comes to IAP/subscriptions.

Steam / Play Store both allow the distributor of an app to let the user subscribe without going through their payment processing. Apple does not. That means Apple is taking a cut of services they are not helping to deliver.

Nintendo takes anywhere from 40-60% for the Switch.

It’s a _lot_ for what’s basically just payment processing (that’s all it is for in app sales).

Looks like price collusion by the major players as well, which is also illegal.

That's not true, it's also discovery, trust and an ecosystem to run your apps in.

Calling the app store just payment processing is a ridiculous simplification.

Epic's store charges 12%, but has neither the hardware platform, or software platform - and relatively little market share.

They arguably should be charging ~5% since it's actually closer to just payment processing and delivery.

Apple takes 30% for in-app sales. People already have the app, there is no discovery or trust benefit. The App Store is awful for discovery anyway. You think we need the App Store to discover the Facebook app, Amazon app, Epic app? These apps spread by network effects, not discovery in the store.

Users pay for the hardware platform.

I find games for the first time with the Epic Store. Market share isn’t really super relevant, they are the newest entry in the market.

I think Apple is probably on the wrong side of anti-trust law on this, but there is certainly a trust benefit (and UX benefit) to a unified payment platform.

The history of mobile/online payments is littered with instances of users being confused/defrauded.

> Users pay for the hardware platform.

This isn't really relevant. Not only is an iPhone worthless without software, but subsidization of hardware by services is very common.

Isn’t Visa/MasterCard the unified payment platform?

Obviously the iPhone is worthless without software, except it comes with a 1k price tag. Part of that is for the OS. The hardware certainly doesn’t cost that much (comparable offerings from hardware-only manufacturers cost less). This is not a case where the hardware cost is subsidized. Numbers from various sources suggest the iPhone sells for triple the cost of manufacturing.

manufacturing cost != R&D cost

Apple's net sales for Q3 were ~$60B and R&D was ~$5B. No matter how you look at it, the cost of an iPhone far exceeds Apple's cost to produce it.

https://www.apple.com/newsroom/pdfs/FY20-Q3_Consolidated_Fin...

You’re still neglecting ongoing operational costs, which are neither hardware nor R&D.

But it still doesn’t matter, Apple is profitable, everyone knows that already. It is legal to be profitable, and it is legal to have parts of your business subsidize other parts.

What might not be legal is using a dominant market position to force out competitors.

Except they’re being new and without market share is exactly why they’re cheaper. Epic isn’t running an altruistic enterprise here.

It was telling that after circumventing Apple’s 30%, they didn’t offer their goods 30% cheaper - or even 18% cheaper (reflective of the 12% they think is “fair” in their own store), they made it 10% cheaper for the user, and kept 8% more for themselves than other developers on their own Epic platform would get.

Absolutely the App Store does a lot of discovery - just ask anyone what being a featured app does.

I find plenty of apps by searching.

Anyone whiteknighting for epic here is going to be disappointed in 5 years when they’re either successful with their store and raking other devs over the coals or they’ve shut their store down completely.

It's for the access to Apple's consumers. I refuse to buy any app/subscription outside App Store because I have had a terrible experience with companies like Blinkist.

If you read Apple's filing, they actually claim it's impossible to separate distribution from payment processing. I mean, it's as if Apple have never heard of Stripe or PayPal.

Some of that filing is so lousy & so easily proven false, it's starting to look like Apple could lose this one hard.

That's a pretty big oversimplification of their argument and antitrust law usually isn't so cut and dried.

What they're saying is that in the market for product A, if sales of product A are usually bundled with product B, then the courts view product A and B as one product sold together. The fact that product B might be sold separately in other markets doesn't change the facts and circumstances as they pertain to product A's market.

The precedent they cite in Rick-Mik Enters., Inc. v. Equilon Enters. LLC demonstrates an example of this, where credit card processing services are typically bundled with sales of gas station franchises, and therefore in the market of "gas station franchise sales", "credit card processing services" were not considered a separate product even though you can obviously purchase "credit card processing services" separately in other markets.

While I don't know if this particular argument will hold up in court, it's not "so lousy & so easily proven false" either.

It's not just payment processing. It's a distribution channel similar to a physical store.

A physical store allows you to immediately deliver a physical good to a local buyer, which you could not do without a local store.

Every person distributing an app can access any potential buyer of digital goods directly via their own servers, which basically every app creator has already.

30% is only the standard because Apple set it so high. All of the others just copied them - "Apple charges 30% so we will look reasonable doing the same". It's basically the figure you can get away with if developers have to publish in your store.

When developers don't have to publish in your store, you have to lower your cut:

https://blogs.windows.com/windowsdeveloper/2018/05/07/a-new-...

That is why Microsoft and Apple are so keen on pushing the Mac/Windows stores, and on making running unsigned code a huge pain in the arse. They want that sweet sweet 30% cut on desktop too.

The Mac App Store is 3%. Probably a lot closer to the real cost, when Apple has to be competitive (for now, I see it going MAS-only soon) with the ability to sell your own apps.

Huh? No, the Mac App Store also takes 30% of each sale.

Even if true (which it is not), the mac app store sales are negligible compared to the mobile platform in terms of volume.

> 30% is only the standard because Apple set it so high.

Both Steam and the Xbox Games Store predate the App Store by several years so your suggestion is literally impossible.

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