Epic skirts Apple's 30% commission fee by implementing 'direct' payments

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Comments

  • Reply 41 of 59
    tyler82 said:
    Looks like developers found a loop hole to get out of paying "taxes."

    Uh-oh, Apple apologists are stuck in a quandary on this one!

    Not really.  Epic surely must have agreed to the developer terms to get on the App Store.  Now they are in violation of those terms.  That's simple enough to understand.  Apple didn't violate the agreement, so I'm not sure Epic's lawsuit would carry much weight.  If Apple is wrong then they should be fined or punished in some way.  I don't think Epic is being cheated by Apple but that needs to be determined by the courts.

    I'm biased towards Apple because it's their App Store and they make the rules and not the developers.  Maybe the 30% cut is higher than it should be but one would have to know exactly what Apple's expenses are to maintain the App Store.
    watto_cobra
  • Reply 42 of 59
    SpamSandwichSpamSandwich Posts: 33,407member
    It_is_me said:
    It_is_me said:
    "Thousands of apps on the App Store approved by Apple accept direct payments, including commonly used apps like Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonald's, Uber, Lyft, and StubHub. We think all developers should be free to support direct payments in all apps."

    While it may be true that the companies mentioned above don't have to pay the 30 percent transaction fee, there's an important distinction to be made. Companies like DoorDash, McDonald's, Uber, and Best Buy provide users with physical goods.

    Epic, on the other hand, sells digital goods.
    I pay my Xfinity internet bill through their app on my iPhone. I don't see anything different between that and what Epic is doing. Xfinity is not providing me with any physical goods. I'm sure Xfinity doesn't pay Apply the 30% commission I pay through their iPhone app. 
    How do you know?
    It's common sense and simple math. Xfinity doesn't have the profit margin to pay Apple 30% of every internet/phone/cable/homes security service bill that is paid through their iPhone app. If Apple required that, Xfinity simply wouldn't allow the feature.  
    Again... how do you know? Answer: You don’t.
    watto_cobra
  • Reply 43 of 59
    MacProMacPro Posts: 19,778member
    If Epic can push $1 billion in commissions to Apple, then they should get a minor break on the fees... 29.5%.
    I'd definitely give them a corporate discount.
    SpamSandwichwatto_cobra
  • Reply 44 of 59
    Well then. Apple quickly removing access to apps is certainly a factor when deciding on a new phone to purchase. Services like Xcloud, sideloading, .FLAC support, Firefox addons, actual homescreen customization, NFC access, that Microsoft app that lets you "remote in" to your phone... Sure, I wouldn't get five years of updates, but I would enjoy the freedom of using my phone much more for three years than I would for five years. USB C... That's a connector I miss dearly.
  • Reply 45 of 59
    It_is_me said:
    It_is_me said:
    "Thousands of apps on the App Store approved by Apple accept direct payments, including commonly used apps like Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonald's, Uber, Lyft, and StubHub. We think all developers should be free to support direct payments in all apps."

    While it may be true that the companies mentioned above don't have to pay the 30 percent transaction fee, there's an important distinction to be made. Companies like DoorDash, McDonald's, Uber, and Best Buy provide users with physical goods.

    Epic, on the other hand, sells digital goods.
    I pay my Xfinity internet bill through their app on my iPhone. I don't see anything different between that and what Epic is doing. Xfinity is not providing me with any physical goods. I'm sure Xfinity doesn't pay Apply the 30% commission I pay through their iPhone app. 
    How do you know?
    It's common sense and simple math. Xfinity doesn't have the profit margin to pay Apple 30% of every internet/phone/cable/homes security service bill that is paid through their iPhone app. If Apple required that, Xfinity simply wouldn't allow the feature.  
    Again... how do you know? Answer: You don’t.
    I know because Xfinity does not have the profit margin to pay Apple the 30%. Read any of there public financial disclosures. They don't have anywhere close to a 30% profit margin. 
  • Reply 46 of 59
    cropr said:
    mjtomlin said:
    "Thousands of apps on the App Store approved by Apple accept direct payments, including commonly used apps like Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonald's, Uber, Lyft, and StubHub. We think all developers should be free to support direct payments in all apps."

    Is that what you think? Haha. These types of developers are nothing more than parasites.

    Look, I get it and think Apple needs to do something about how the App Store is run, but these developers who want what amounts to a free ride are just being greedy and stupid. It is App Store revenue that allows Apple to give away free OS upgrades, which in turn allows Apple to push the platform (and developers) forward.

    Maybe Apple should create tiered fees for their Developer Program?
    $99/year to develop apps sold through the App Store - Apple gets their 30% cut. Basically the same as it is now.
    $999,999/year to develop apps sold via outside payment system - Apple gets nothing extra.

    Some of these larger developers could easily cover a million a year. And smaller developers can still start with a hundred dollar fee and if/when their app takes off, switch to the higher tier.


    I am an app developer, and you have absolutely no clue whatsoever about the business of apps.  You are blinded completely by the few big ones like Supercell (Clash of Clans, ...).  If Apple would $1M for to develop, there would no App store, Only major companies like Google, Facebook, ... would be willing to invest.   Statistics show that 99% of the apps are loss making.  The big profits are made by a few very profitable app companies.

    Just 3 examples of the real app business world:
    1. Of the 11 apps that I put on the App Store, 7 are loss making, 2 are about break even and 1 is making a nice profit.  This last app is profitable because it is multi-platform and because I can avoid the 30% Apple tax by charging the customer directly. 
    2. If I would only make a iOS version of my apps, all my apps would be loss making.   Developing an app simultaneously for iOS, Android and Web costs roughly 40% more than making it for iOS only, but the revenues are more than double. So the "fact" that Apple is offering me the market I was dreaming of, is a fake fact
    3. One of my colleague app business owners had spent 40.000 Euro in developing a new app, when Apple announced a change in its app developing guidelines.  His app could no longer pass the approval and he went broke 3 months later.   This is the business reality that you fail to understand.
    Like in any other business, an app business owner want to cut costs wherever possible.   This has nothing to do with greediness or stupidity but with normal business practice.

    I don't mind to pay a  commission to any business partner as long as that partner provides the right value for the commission.  Like all developers have discovered, the 30% cut Apple is imposing, does not provide the value it promises.    A survey among my paying customers revealed that none of them discovered the apps via the App Store, they did it via the direct marketing campaign I launch and paid.     Which basically means that Apple has just become a secure payment processor.  The market price of a secure payment processor is 2.7% and not 30%.   No wonder app developers try to avoid the Apple tax,
    .

    Nobody gives a damn about your repeated claims of being a developer while spewing all sorts of bullshit other developers know is false.
    Sounds about right to me. If my apps were anything more than a hobby, I would be hating life right about now.
  • Reply 47 of 59
    ITGUYINSD said:
    MacPro said:
    Epic: 'We have our cake and we eat it too.'
    Pretty much. Why are they on the store in the first place? Access to the huge base of customers it provides.
    They're on the store in the first place because they have no other option to distribute their app, thanks to Apple "guidelines".  Apple has boxed app developers into one place to distribute their apps.  Because of that, I think it is perfectly fair for an app to give users a choice as to the method of payment.  Of course, greedy Apple will think otherwise.
    I don't follow your logic. There are multiple options to distribute an app: native code for one of the many available platforms, or web code that does a reasonably good job of write once run anywhere. But if you want your app to be native for a given platform, you make design decisions that are based on an evaluation of the strengths and weaknesses of that platform. You engineer the best possible solution given the applicable constraints.

    But you can't just look at the app from an engineering perspective if you want to make a profit, you have to analyse from the business perspective as well.

    Why is it that an application with security holes up the wazoo will be excoriated in public and the crowd joins in, but an application with obvious business weaknesses cannot be criticised in public without drawing the ire of the crowd?


    There seems to be an enduring opinion that anything somebody tries to make money from should be inviolate from criticism and business and societal realities, and the rest of us should bend over backwards to make it work for the speculator. Ugh.


    You think you're going to automatically make money from having your app on Apple's iOS App Store? There's plenty of evidence to show that you're mistaken. But with hard work and experimentation you can probably find something that will be profitable. You might be lucky and your first, second, third... even tenth attempt will work - good for you! If you reach a point where you want to give up because you haven't found success yet, good for you! If you figure out a way to be profitable with another platform with the exact same idea that fails on Apple's store, good for you!

    If Epic had taken an honest look at the situation with the iOS store and told their customers: "We know you want it bad, but we just can't see a way to make it work for us" then they'd get sympathy from me. If Epic had said "We've tried on Apple's store, but it just doesn't work for us with the rules as currently written" and then pulled their app, again, I'd be sympathetic. But what I see is that Epic are unwilling to be honest (especially with their customers) and have tried to break the rules to make the situation work for them and portray Apple as unreasonable for having those rules... the pragmatist in me recognises the benefit they will get from this approach, but... ugh.

    It reminds me of Al Capone's famous quote: "You can get further with a kind word and a gun than you can with a kind word alone." Epic now have some leverage against Apple, but it doesn't change the moral situation for them. A company of their size can be reasonably expected to have a more accurate forecast of what Apple's rules mean for their business, they knew the rules going in and I just can't accept that they have done the right thing here.
    Detnator
  • Reply 48 of 59
    looplessloopless Posts: 338member


    Just 3 examples of the real app business world:
    1. Of the 11 apps that I put on the App Store, 7 are loss making, 2 are about break even and 1 is making a nice profit.  This last app is profitable because it is multi-platform and because I can avoid the 30% Apple tax by charging the customer directly. 
    2. If I would only make a iOS version of my apps, all my apps would be loss making.   Developing an app simultaneously for iOS, Android and Web costs roughly 40% more than making it for iOS only, but the revenues are more than double. So the "fact" that Apple is offering me the market I was dreaming of, is a fake fact
    3. One of my colleague app business owners had spent 40.000 Euro in developing a new app, when Apple announced a change in its app developing guidelines.  His app could no longer pass the approval and he went broke 3 months later.   This is the business reality that you fail to understand.
    Like in any other business, an app business owner want to cut costs wherever possible.   This has nothing to do with greediness or stupidity but with normal business practice.

    I don't mind to pay a  commission to any business partner as long as that partner provides the right value for the commission.  Like all developers have discovered, the 30% cut Apple is imposing, does not provide the value it promises.    A survey among my paying customers revealed that none of them discovered the apps via the App Store, they did it via the direct marketing campaign I launch and paid.     Which basically means that Apple has just become a secure payment processor.  The market price of a secure payment processor is 2.7% and not 30%.   No wonder app developers try to avoid the Apple tax,
    .
    What a load of rubbish. Every sale of an app is "revenue" with no cost. The cost is the upfront development. You apps are obviously rubbish and no-one wants to buy them. Don't blame Apple for their "tax" that hosts your apps on the app store, promotes them via search, takes payments and takes care of all the other financials - including depositing revenue in your bank account along with extensive reporting on sales trends across all regions. Plus all the complex issues on sales on international app stores.
    watto_cobraDetnator
  • Reply 49 of 59
    AngmohAngmoh Posts: 25member
    Get any distributor and they take 30%-40% at least and probably even more. If you think 30% is high, I have many other examples. I give training through a training provider to make my training official and eligible for government subsidy. They take 40% for running the web site and registering attendance and they take care of government subsidies. Out of $20k income for a single training course, they take $8k and and I get $12k. Problem is that without them I have less than half the attendance, am not eligible for subsidy therefore can not charge as much per person, have to collect payment myself and have other trouble. I earn at best $7k. So should I go alone, save the 40% agent fee and earn $7k, or get ripped off by the agent and earn $12k?

    EPIC believes that they have the power to absorb the extra cost, avoid loss in number of sales and still be better off. Being a big player they might me right, but 99% of all companies will have less money coming in doing this and are better off paying Apple 30%.
    watto_cobra
  • Reply 50 of 59
    PShimiPShimi Posts: 38member
    loopless said:


    Just 3 examples of the real app business world:
    1. Of the 11 apps that I put on the App Store, 7 are loss making, 2 are about break even and 1 is making a nice profit.  This last app is profitable because it is multi-platform and because I can avoid the 30% Apple tax by charging the customer directly. 
    2. If I would only make a iOS version of my apps, all my apps would be loss making.   Developing an app simultaneously for iOS, Android and Web costs roughly 40% more than making it for iOS only, but the revenues are more than double. So the "fact" that Apple is offering me the market I was dreaming of, is a fake fact
    3. One of my colleague app business owners had spent 40.000 Euro in developing a new app, when Apple announced a change in its app developing guidelines.  His app could no longer pass the approval and he went broke 3 months later.   This is the business reality that you fail to understand.
    Like in any other business, an app business owner want to cut costs wherever possible.   This has nothing to do with greediness or stupidity but with normal business practice.

    I don't mind to pay a  commission to any business partner as long as that partner provides the right value for the commission.  Like all developers have discovered, the 30% cut Apple is imposing, does not provide the value it promises.    A survey among my paying customers revealed that none of them discovered the apps via the App Store, they did it via the direct marketing campaign I launch and paid.     Which basically means that Apple has just become a secure payment processor.  The market price of a secure payment processor is 2.7% and not 30%.   No wonder app developers try to avoid the Apple tax,
    .
    What a load of rubbish. Every sale of an app is "revenue" with no cost. The cost is the upfront development. You apps are obviously rubbish and no-one wants to buy them. Don't blame Apple for their "tax" that hosts your apps on the app store, promotes them via search, takes payments and takes care of all the other financials - including depositing revenue in your bank account along with extensive reporting on sales trends across all regions. Plus all the complex issues on sales on international app stores.

    The developer is making valid points. Their argument is well thought out, and reasonable.
    They did not attack you, and abuse you.
    Instead of talking about each point and saying why it is wrong, you smear them with comments like "the apps are obviously rubbish" how incredibly unkind and disingenuous. You have absolutely no clue what their apps are. How can you possibly say that?

    You can sell an application (not for iOS) on a website, process payments yourself, and handle all the apparently 'complex issues' with international sales quite easily. Let's face it, an app is only on international app stores if it has been translated to local languages. And if a dev is doing that, they sure as hell can handle having a website that does that too.

    As a developer I have written a card processing system that a client uses every day. I can tell you that it is near child's play to set up. There is nothing complicated or difficult about it. But, sure, if a dev doesn't want to do that, they'll typically use a Paypal account to handle that - and it works well too. The fee is not 30% for doing that.

    You have completely rubbished the devs points that:

    1. The App Store is not effective in marketing their product. They market their product via other sites, but Apple then gets a cut - for what?
    2. Customers find the product outside of the App Store, but have to purchase it on the App Store - the app must be served by Apple servers because Apple said so. They are forcing the 'we provide the infrastructure' meme on to developers.
    3. Plenty of developers have their own infrastructure; yet they have to use Apple's.

    Of course I understand the security implications of not doing things this way. But here's the thing - there is no reason why apps could not be hosted on a developer's services, and served by those services. Hashed keys used by iOS to validate that an app is what it says it is, is more than enough security. We don't need Apple's servers to serve the apps. If developers that want to reduce the fees they pay to Apple could have this option, and in fact for MacOS apps that have EXACTLY THIS OPTION - apps sold for Mac OS outside of the app store already work this way using notarization, Apple could charge a lower fee, or what ever the fee is for notarization (currently I believe it is free).

    Pascalxxmuthuk_vanalingam
  • Reply 51 of 59
    The prospect of multiple developers opening their own app stores on iOS is not appealing to me - I do think, however, that what Epic did here in offering an alternative payment method within their app is not completely unreasonable. After all, they gave users the choice whether they want their payment to processed via Apple or via Epic. As long as users are given the choice to make their payment through Apple instead of handing their data over to another company, I think there could be some compromise to be found between Apple and developers. I'm not saying that Epic should not have to pay Apple at least *some* money but there could be another way than to take 30% of all in-app purchases.
    muthuk_vanalingam
  • Reply 52 of 59
    @PShimi That's a valid point.

    I wonder whether there was a time when you were not able to download Mac apps outside of the App store and if so, why this changed. Do you know about this?

    In any case, what you suggest seems like a good solution to me for iOS, especially if users have the option to block downloads of apps from outside the App store for security reasons.
    muthuk_vanalingamPShimi
  • Reply 53 of 59
    It_is_me said:
    "Thousands of apps on the App Store approved by Apple accept direct payments, including commonly used apps like Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonald's, Uber, Lyft, and StubHub. We think all developers should be free to support direct payments in all apps."

    While it may be true that the companies mentioned above don't have to pay the 30 percent transaction fee, there's an important distinction to be made. Companies like DoorDash, McDonald's, Uber, and Best Buy provide users with physical goods.

    Epic, on the other hand, sells digital goods.
    I pay my Xfinity internet bill through their app on my iPhone. I don't see anything different between that and what Epic is doing. Xfinity is not providing me with any physical goods. I'm sure Xfinity doesn't pay Apply the 30% commission I pay through their iPhone app. 
    The difference is Xfinity is supplying you with a physical product. Internet, Phone, TV for your house is the physical product. Best Buy, McDonalds, Amazon ... all supply physical goods. 

    Epic supplies you with a digital goods for your avatar. Those digital goods are what is being commissioned to both apple and google, because Google has the exact same policy as Apple does. 
    watto_cobra
  • Reply 54 of 59
    PShimiPShimi Posts: 38member
    Pascalxx said:
    @PShimi That's a valid point.

    I wonder whether there was a time when you were not able to download Mac apps outside of the App store and if so, why this changed. Do you know about this?

    In any case, what you suggest seems like a good solution to me for iOS, especially if users have the option to block downloads of apps from outside the App store for security reasons.
    Thanks @Pascalxx
    I don't remember there ever being a time when you could not download apps outside the Mac App store, except of course when software wasn't really on the net much and publishers were still clinging to boxed software back in the 90s. There were some rumblings at some point that that could happen (everything would be on the Mac App store only), but I think the Mac platform will for the moment remain relatively open. Users are still able to install any app they like pretty much like.

    There's also the macports open source project you can get open-source software from, and it appears it will also work on Big Sur.
  • Reply 55 of 59
    jimh2jimh2 Posts: 640member
    Epic and Spotify forget that Apple has no requirement to have their products in the App Store. You cannot make a company carry your products. 
    watto_cobraPascalxx
  • Reply 56 of 59
    nicholfdnicholfd Posts: 824member
    One thing to keep in mind is that 86% of apps on the AppStore pay nothing, and 30% is not exorbitant. Before iPhone the average app on BB costed $40! Apple brought that down to a dollar! 
    Anyways, I actually came here to say that Apple blew it in the gaming market back when they used to promise game developers features and not deliver. It got so bad that the developers of Halo made a deal with the devil and joined Xbox. Halo was the killer app that made Xbox successful. Now Apple is trying to make a change and it’s gonna be a hell of a ride for them. 
    Actually Microsoft bought the Halo franchise (developers, etc.). That is why it's Xbox exclusive.
    watto_cobra
  • Reply 57 of 59
    crowleycrowley Posts: 10,453member
    nicholfd said:
    One thing to keep in mind is that 86% of apps on the AppStore pay nothing, and 30% is not exorbitant. Before iPhone the average app on BB costed $40! Apple brought that down to a dollar! 
    Anyways, I actually came here to say that Apple blew it in the gaming market back when they used to promise game developers features and not deliver. It got so bad that the developers of Halo made a deal with the devil and joined Xbox. Halo was the killer app that made Xbox successful. Now Apple is trying to make a change and it’s gonna be a hell of a ride for them. 
    Actually Microsoft bought the Halo franchise (developers, etc.). That is why it's Xbox exclusive.
    For Microsoft to buy Bungie had to sell. They joined Microsoft (and the Xbox).
  • Reply 58 of 59
    It_is_me said:
    "Thousands of apps on the App Store approved by Apple accept direct payments, including commonly used apps like Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonald's, Uber, Lyft, and StubHub. We think all developers should be free to support direct payments in all apps."

    While it may be true that the companies mentioned above don't have to pay the 30 percent transaction fee, there's an important distinction to be made. Companies like DoorDash, McDonald's, Uber, and Best Buy provide users with physical goods.

    Epic, on the other hand, sells digital goods.
    I pay my Xfinity internet bill through their app on my iPhone. I don't see anything different between that and what Epic is doing. Xfinity is not providing me with any physical goods. I'm sure Xfinity doesn't pay Apply the 30% commission I pay through their iPhone app. 
    The difference is Xfinity is supplying you with a physical product. Internet, Phone, TV for your house is the physical product. Best Buy, McDonalds, Amazon ... all supply physical goods. 

    Epic supplies you with a digital goods for your avatar. Those digital goods are what is being commissioned to both apple and google, because Google has the exact same policy as Apple does. 
    How is internet a physical good? It's a digital good.
  • Reply 59 of 59
    cropr said:

    I don't mind to pay a  commission to any business partner as long as that partner provides the right value for the commission.  Like all developers have discovered, the 30% cut Apple is imposing, does not provide the value it promises.    A survey among my paying customers revealed that none of them discovered the apps via the App Store, they did it via the direct marketing campaign I launch and paid.     Which basically means that Apple has just become a secure payment processor.  The market price of a secure payment processor is 2.7% and not 30%.   No wonder app developers try to avoid the Apple tax,
    .
    Except this is consistent with every single App store that has security and quality restrictions to ensure that developers are not loading crap to our phones.
    Steam Store = 30%
    Google Play = 30%
    Galaxy Store = 30%

    Introducing side-loading or uncontrolled content onto my phone is the fastest possible path to a compromised device.

    What I think or horrific is the practice of in-game micro-payments and in-game currency and pay-to-play bullshit.   
    Set a price, give me the content I paid for and don't ask me for money again.  
    watto_cobraDetnator
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