The War Against Apple (By App Developers)
Today is an interesting day. The popular multiplayer game, Fortnite, has been blocked from the Apple’s iOS App Store and later, Android’s Google Play Store, after it’s developer, Epic Games, pushed out an update allowing its users to purchase it’s in-game currency, V-Bucks, at a discounted price by purchasing it directly through Epic Games, rather than Apple and Google’s “In-App Purchases” and shortly after, filing a lawsuit against both companies. But why would Fortnite want to bypass the App Store’s payment option? Isn’t going through the App Store safer and securer than directly purchasing?
Why do companies try to evade stores’ In-App Purchases?
Both Google and Apple have similar Terms of Service when it comes to buying and selling anything in apps, such as in-game currencies, paying an Uber driver, or getting a subscription to that service you love. In App Purchases are generally safer than third-party services because you never know what measures the third-party is putting into place to protect your data — if any. In App Purchases (IAP) is guaranteed to be more secure than third-parties because you can trust that a company like Google or Apple would know how to keep your data safe. Additionally, they add safer features to keep “accidental purchases” from being made, such as fingerprint-recognition to verify that you are really you, and not someone borrowing your phone to take money off your bank account that you have linked to your account.
In order for developers to monetize themselves using IAP, they must agree to the “Apple Tax” (or “Google Tax”), and they are not allowed to accept payments through themselves (Keep this in mind for later). The Apple Tax claims 30% of all purchases made in an app to go to the stores to keep themselves. In response, developers have 2 options — Mark it up or Suck it up.
If developers “suck it up”, then they lose 30% of any purchase made in their app. If developers “mark it up”, they mark up the price for the consumer, and if they have other ways to pay, it makes the price on mobile seem more expensive than on PC. The popular livestreaming app, Twitch, has 2 prices: $5.99/month for mobile users and $4.99/month for anyone who purchases through themselves. The company marked up subscription costs in order to lower their losses.
“Epic Games defied the App Store Monopoly”
In 2020, Fortnite went against their developer agreements (basically rules that developers must follow) and added a feature in their app that allows its users to purchase through 2 ways: through Apple or through Epic Games.
As you can see from the image, there are 2 ways and 2 prices to pay: The first one being through Apple’s App Store, which will cost you $9.99. The second being Epic direct payment, which is discounted down to a total of $7.99. The App Store’s price is inflated for Epic Games to balance the cost of Apple’s tax. The second price is the regular price that PC and console players pay when purchasing V-Bucks directly through Epic Games.
Due to this being a breach of the Developer Agreement, both Apple and Google banned the Fortnite app from their store and removed it.
Within hours, Epic Games premiered a video for all PC, Mobile, and Console players to see called “Nineteen Eighty-Fortnite”, a mockup of Apple’s 1984 Macintosh announcement video, saying the following:
Epic Games has defied the App Store Monopoly.
In retaliation, Apple is blocking Fortnite from a million devices.
Join the fight to stop 2020 from becoming “1984".
Epic Games accused Apple of being a monopoly, and has filed a lawsuit against the tech giant. You can read the lawsuit(s) below:
People had mixed opinions when they saw this. Some sided with Epic, claiming the developer agreement is too strict and makes it impossible to profit on mobile devices. Others sided with Apple and Google, stating that they read and agreed to the agreement and should have abided by it rather than going against it. Furthermore, Android devices are able to download apps from any source, including directly from Epic Games website rather than the Google Play Store. Apple, on the other hand, does not allow this.
This isn’t the first time…
Apple has taken some criticism before. A couple years ago, Spotify, a music streaming platform, posted and claimed that Apple put up restrictions against them that made it difficult for them to compete with Apple’s own competitor to Spotify called Apple Music, a music streaming platform with similar pricing as Spotify. Spotify claimed that — along with the 30% Apple Tax — The App Store made it impossible for them to sell promotions and offers, such as their “$0.99 for 3 months of Premium” offer and was unfair to Spotify by not taxing Uber and other service apps.
They also claimed that Apple put pressure on them to enter the IAP program. Spotify didn’t want to sell subscriptions in IAP because they knew they had to markup the price, however in June 2014, they gave in. They sold Spotify Premium on iOS for $12.99 per month (originally selling at $9.99 per month) and fans were not happy.
Spotify also claimed that Apple didn’t allow them to integrate their app with Siri, HomePod (basically a physical Siri), and Apple Watch.
In March 14, 2019, Apple responded:
“When we reached out to Spotify about Siri and AirPlay 2 support on several occasions, they’ve told us they’re working on it, and we stand ready to help them where we can.”
“Spotify is deeply integrated into platforms like CarPlay, and they have access to the same app development tools and resources that any other developer has.”
“We found Spotify’s claims about Apple Watch especially surprising. When Spotify submitted their Apple Watch app in September 2018, we reviewed and approved it with the same process and speed with which we would any other app. In fact, the Spotify Watch app is currently the №1 app in the Watch Music category.”
“Spotify wants all the benefits of a free app without being free.
A full 84 percent of the apps in the App Store pay nothing to Apple when you download or use the app. That’s not discrimination, as Spotify claims; it’s by design”
“Apps that sell physical goods — including ride-hailing and food delivery services, to name a few — aren’t charged by Apple.”
“As Spotify points out, that revenue share is 30 percent for the first year of an annual subscription — but they left out that it drops to 15 percent in the years after.”
“Even now, only a tiny fraction of their subscriptions fall under Apple’s revenue-sharing model. Spotify is asking for that number to be zero.”
“Apple connects Spotify to our users. We provide the platform by which users download and update their app. We share critical software development tools to support Spotify’s app building. And we built a secure payment system — no small undertaking — which allows users to have faith in in-app transactions. Spotify is asking to keep all those benefits while also retaining 100 percent of the revenue.
Spotify wouldn’t be the business they are today without the App Store ecosystem, but now they’re leveraging their scale to avoid contributing to maintaining that ecosystem for the next generation of app entrepreneurs. We think that’s wrong.”
You can find the full response here: https://www.apple.com/newsroom/2019/03/addressing-spotifys-claims/
Facebook Gaming, aggravated, that the App Store forced them to remove their “Games” section
The Facebook Gaming app brings streamers, mini-games and content creators to your phone and connects you to communities big and small across the world. In 2020, they published their Android app, later publishing their iOS app — but with a change…
In August 2020, Facebook claimed that Apple forced them to remove the “Games” section of their app, claiming that the “Games” section was the primary purpose of their app — it’s not, as 95% of usage on their Android app came from watching streams, not from playing games.
4.7 HTML5 Games, Bots, etc.
The company made headlines for their statement, and Apple is yet to respond to the complaints.
These are only a handful of complaints, and this excludes xCloud — Microsoft’s game streaming service, rumored to had been declined for being able to sell games through Microsoft rather than Apple, and more. Will Apple respond and change their App Store system, or will Apple defend themselves and keep their rules the same? Only time will tell… or that lawsuit from Epic.