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Comment by davidmurdoch | Hacker News Reader

Sometimes I think the 30% was supposed to be 3% originally, and no one noticed the decimal was in the wrong place when they shipped it, and then people paid it anyway, so they kept it.

30% is just so unreasonable that it would be totally understandable if someone would believe this.

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In 2008, the app store was launching, and physical software was still sold at Targets, Walmarts and other large retailers. A 30% margin was roughly what retailers would make off of physical software sales. By setting the App Store to be the same, Apple was signaling to retailers that they were not trying to undercut their margin, and keep a healthy relationship with them.

It was 2008; "big box" software was largely seen as obsolete to the vast majority of developers. Marketing was done online, and the benefit of investing in retail had stopped outweighing the consequences. Online updates quickly became the norm, and service features supplanted point-of-sale business model (much like Apple's double-dip into microtransaction profits).

Apple chose 30% because they knew they weren't a retailer. You can hunt for a cheaper Diablo II copy online or at Wal-Mart, but not on iPhone.

I think console games were the exception to this. It took until recently with the PS5 to get a diskless console model.

Apple see the iPhone as a game console, not that anyone else thinks of it in that way.

> It was 2008; "big box" software was largely seen as obsolete to the vast majority of developers.

Well, I'm just reporting it as I understood their decision in the moment. I was working on The Sims at that time, and I assure you, retailers still mattered to us bigly.

And what you quoted is my opinion as a consumer. Blizzard got it working in 1996, Valve figured it out in 2003 - the industry was moving on.

EA was an outlier, and by the time they capitulated and started Origin it was so bad that people regret signing up for the service. GoG didn't have this issue, Valve didn't have that issue, EA did.

No one was buying boxed software in 2008. The second we had broadband, call it 2002-ish, everyone was downloading everything. For many of us that began in the 90s before we had broadband. Overnight downloads over 56K phone modems was already overtaking boxed purchases. More people downloaded Netscape in 1995 than bought it boxed.

Not disagreeing with your general point, but Netscape is probably a bad example here. People who wanted Netscape would have been much more likely to know how to download and wanted to download it. Compared to, say, video editing software, which would have much less correlation with web users back in 1995 when not everyone was a web user.

And it was a great deal compared to the 90% cut you had to give phone carriers to highlight your java apps

The carriers were taking about 70% in tariffs and fees even without you bribing them to get better positioning. That’s why all the mobile app people rushed to Apple in the early days. They could actually turn a profit on the App Store.

If probably be retired now if I wasn’t already so burnt out on how SMS tariffs worked at the time. Utterly opaque and on a delay. They basically wrote you a check for however much they felt like each month.

Essentially the reseller arm of carriers at that time was just a money funnel from VCs to the telcos. They were eating their own young and I was full up on the bullshit.

Steam, the Kindle Store and iTunes all had similar sales cuts since before the app store launched in 2008.

It’s egregious now but at the time it wasn’t crazy because software developers often made way less than that when going through traditional publishing routes. Plus everyone was just happy to be making money off the new platform.

Nah, they probably used pre-existing marketplaces like steam as an example of what "they could get away with"

"sometimes I make up false stories to make me feel better about my favorite company :D"

I don't even own any apple products.

still making up stories though

Yes, and? Making up a story was literally the point of my comment.

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