Apple and Google Face Growing Revolt Over App Store ‘Tax’

Amazon does it all of the time. You pay for content by going on Amazon.com and you view the content via an app.

"App Store fees got you down? Meanwhile at Epic, they lowered their take on the Unreal Marketplace from 30% to 12% and retroactively paid back years of fees.

"Epic said this is due to the success of Fortnite. If only Apple and Google had successful products to rely on for income."

— https://twitter.com/agilethumbs/status/1029804861477412865

Three thoughts.

There is a certain irony at play here, given both Apple and Google's own fights with tax authorities in many jurisdictions (eg the double Irish and the EU, Australian complaints about tax avoidance, agreements about their use of shell companies in the Cayman Islands or other tax havens, etc.).

I have always wondered what the real cost is to both Google and Apple in running their App Stores? The 30% figure has been a constant - with a few exceptions like the in-app subscriptions after 1 year on iOS down to 15% - for 10 years now but what are the actual revenue vs cost figures involved in running these [billing] stores? What would be a fairer cut... 10%? 15%? 17.8% in large economies and 22.6% in smaller countries (as semi-random numbers), etc.

Currency fluctuations are also important. Apple more so than Google, also seem to make quite some revenue from pegging their prices against the USD and only updating these once or twice a year - and generally only at very favourable forex conversions in Apple's favour. An unintended side effect here is that many non-USA consumers are subsidising USA consumers purchases of both Apple and Google products (because the USD is the benchmark price). Given the reliance on China as the hardware manufacturer, maybe the Yuan would be 'fairer' in many instances? (It won't happen of course due to how Cupertino and Mountain View centric both companies, and by extension, how pro-USA many of their pricing decisions are).

The problem is it's clearly a monopoly (or duopoly). How did they settle on 30%? Why did Apple and Google come to the same 30% number - is that a coincidence? They could easily provide the same service for less than 1/3 of the cost, but the percent never budges because it doesn't have to. There's zero competitive pressure. In fact they could move it up to 60% if they want to with nothing stopping them. Some people have managed to build a business on these app stores but in my opinion they should only be leveraged as part of an existing independent business, otherwise you're building a business on quicksand.

Epic's is a useful reference point. The retrospective angle was particularly surprising, but also shows how successful Fortnite has been in terms of revenue.