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Apple will reduce App Store cut to 15 percent

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Re: Apple will reduce App Store cut to 15 percent

#21

Post by flohofwoe »

abc-xyz wrote: post #17
flohofwoe wrote: post #8

Earlier quoted context omitted.

More like an admission of defeat ;) After all 15% is still higher than the highest EGS tax which is 12%. Good news nonetheless.

Why would you think it's an admission of defeat when Epic Games won't qualify for the 15%? To those that haven't read the article: > The new App Store Small Business Program, as it’s called, will allow any developer who earns less than $1 million in annual sales per year from all of their apps to qualify for a reduced App Store cut of 15 percent, half of Apple’s standard 30 percent fee, on all paid app revenue and in…

That's a bit too far into the tinfoil-hat territory. Apple had to do something to counter the mostly bad publicity for them around the whole App Store topic. But they can't simply reduce the store tax for everyone, because this would cut their App Store revenue in half overnight. The vast majority of apps on the app store most likely make a lot less than 1 million/year, while the vast majority of profits is made through a "handful" (well ok, probably a few more then that) massively big apps, so this announcement probably won't make a big dent in Apple's App Store revenue (but will make a lot of indie devs happy).

Re: Apple will reduce App Store cut to 15 percent

#22

Post by garblegarble »

kefabean wrote: post #14
amelius wrote: post #3

Earlier quoted context omitted.

Reminds me of: https://en.wikipedia.org/wiki/Progressive_tax

Is it planned to be progressive or is the 30% cut taken on the full amount if developer revenue exceeds the $1M threshold by 1 dollar?

From Apple's site:

1. Existing developers who made up to $1 million in 2020 for all of their apps, as well as developers new to the App Store, can qualify for the program and the reduced commission.

2. If a participating developer surpasses the $1 million threshold, the standard commission rate will apply for the remainder of the year.

3. If a developer’s business falls below the $1 million threshold in a future calendar year, they can requalify for the 15 percent commission the year after.

The $1 million threshold is defined as post-commission

Re: Apple will reduce App Store cut to 15 percent

#23

Post by dagw »

kefabean wrote: post #14
amelius wrote: post #3

Earlier quoted context omitted.

Reminds me of: https://en.wikipedia.org/wiki/Progressive_tax

Is it planned to be progressive or is the 30% cut taken on the full amount if developer revenue exceeds the $1M threshold by 1 dollar?

The final details aren't published yet, but by based on what Apple has published you only qualify if you made less then $1m during 2020. If you exceed $1m at any point during the current year all sales for the remainder of that year are charged 30%. The following year all your sales from day 1 will be 30% for that entire year. If you fall below $1m for that year then you can reapply to qualify for the %15 fee for the next year.

Re: Apple will reduce App Store cut to 15 percent

#24

Post by andrewjl »

Dylan16807 wrote: post #7

So the small apps, where Apple has to spend more hours of work for every dollar of revenue, get a discount. And the big apps, where all they have to do is transmit more copies off their servers, don't get a discount. I have no idea what Apple's plan is between this and the Epic fight, but it's fun to watch!

Revenue across the App Store has a power law distribution. This discount has minimal financial impact on services revenue and results in a massive boost of goodwill for the platform.

Re: Apple will reduce App Store cut to 15 percent

#25

Post by apetrovic »

flohofwoe wrote: post #8
octocop wrote: post #5

This is finger to Epic games

More like an admission of defeat ;) After all 15% is still higher than the highest EGS tax which is 12%. Good news nonetheless.

I think that the real prize Epic is after is introduction of independent app stores. 30% tax is just a convenient vehicle they're using for that (not mentioning that they pay that tax on consoles without a word).

Re: Apple will reduce App Store cut to 15 percent

#27

Post by villgax »

Dylan16807 wrote: post #7

So the small apps, where Apple has to spend more hours of work for every dollar of revenue, get a discount. And the big apps, where all they have to do is transmit more copies off their servers, don't get a discount. I have no idea what Apple's plan is between this and the Epic fight, but it's fun to watch!

I guess the volume of smaller apps is way more than bigger ones, maybe bigger ones are able to take advantage of easy to CDNs than storing lots of unique apps globally?

Re: Apple will reduce App Store cut to 15 percent

#28

Post by Dylan16807 »

dbbk wrote: post #19
Dylan16807 wrote: post #7

So the small apps, where Apple has to spend more hours of work for every dollar of revenue, get a discount. And the big apps, where all they have to do is transmit more copies off their servers, don't get a discount. I have no idea what Apple's plan is between this and the Epic fight, but it's fun to watch!

The Epic fight is just Epic making PR for themselves, it's not a real case.

It doesn't have to be a real court case to be a real fight.

And they're also making PR against Apple's cut which is a very good thing.

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