Epic Celebrates "the End of the Apple Tax" After Court Win in Ios Payments Case

This is factually incorrect, and not only incorrect, but so wildly far from being correct that one wonders if this statement was made in bad faith. They only have around 300 million sqft out of an estimated 12 billion sqft, around 2.5%. That is not an overwhelming percentage, nor is it "99.9999% of all retail square footage in the world", which was not a hyperbolic statement. Competitors in retail can obtain their own shelf space. You cannot obtain your own shelf space for mobile software. The network effects of hardware+OS centralization are too strong, so there are and never will be any viable competitors to iOS and Android.

> Apple's "shelf space" is not free. There are constant R&D expenses involved in introducing new sensors and screens that make the underlying apps better.

The R&D expenses do not change regardless of whether there are 1 million or 10 million apps available for iOS. Allowing people to distribute their own software comes at no cost to Apple.

> They take on the support load of on-boarding users, managing the relationship, and dealing with any problems.

Apple absolutely does not do any of this as it pertains to individual apps.

> Epic wants to sidestep all of the costs of building a platform, and offload support costs onto Apple

Nobody is asking for Apple's support; really, what the world needs is less of Apple's involvement in the hardware the people own, not more. Epic is clearly willing to spend money on building platforms, since it has a documented $600 million in losses in its effort to build a competitor to Steam. This, however, is not a case where it is possible to build a platform.

But yes, that's built into the product's price. Devs are paying for a license to work with IOS and need to own hardware only Apple sells to work on IOS. So I think those costs are covered.

We'll see what the "reasonable" price is. If nothing else, we know 27% was too much even for appeals.

Not if the only way to get to the store was through that road. In that case, there are public access laws and it is literally illegal for people who "own" a road to charge people money, if there is an easement.

Thats probably a simplification, but they are called "easement by necessity." rights. So even in your example of the roadway, thats also wrong. They get zero dollars.

> Do you really need a nanny state

This is a false dichotomy. The reason you're doing this is because you know the current situation sucks major donkey dick and nobody, including you, likes it. So to defend it you have to appeal to something even more sucky. It's the death rattle of a poorly constructed argument.

You don't need a nanny state, quite the opposite! You need a freer market.

When Walmart sells the evil fridge, which I can only assume has been hexed by a swamp witch, what they are actually doing is subverting the free market. They're cheating.

Instead of competing by selling the best groceries or the best fridge, they're competing by artificially limiting their competition. They see the market, say "fuck that market, your market is only our stuff", and force your hand. They've created a soft monopoly.

The misconception about free markets is that, if you just let them be, then they're good. Ha. Every free market player is actively devising every single plan imaginable to make the market less free.

If Walmart could run behind you and lock the doors so that you have to buy their groceries, lest you starve to death, they would. Luckily, the "nanny state" stepped in, and we have a freer market because of it.

You don't have to. Kroger and Wal-Mart are completely commoditized options providing the same service. There is fundamentally no difference from buying at one store vs the other; you can do both. If someone goes into Kroger demanding to buy Wal-Mart products at Wal-Mart prices, they're in luck; Wal-Mart exists. There is no lock-in to either store or the options they provide. You're describing a boogeyman that doesn't exist because the greater grocery market is functional and competitive.

The same opportunity does not exist for customers of the App Store. Apps themselves are entirely commoditized; it's only the App Store that is a deliberate monopoly. That has been consistent since the launch of the iPhone and packaging of iOS applications as infinitely reproducible .IPA files.

> So the market is clearly saying "this works and we like it".

That's how most monopolies work, yes. Unfortunately, "the market" won't be asked to testify to whether or not they like or enjoy a monopoly, but whether it causes anti-competitive damages. They understand that a dishonest could

> You're just mad about Apple/Google doing it because some algorithm decided it was an important issue for you.

I cannot parse what you're even trying to accuse me of in this sentence. This is the Y Combinator forum. We care about monopolies like AdSense and the App Store because they harm the economy, not because Instagram Reels showed me a Louis Rossman short.

I'm not sure about the timeline, but in general the reduction to 15% for small developers was due to market signals as much as it was anything else. Both Apple and Google need small developers to continue to create new apps and if the 30% is onerous to small developers (which I think it probably is) they'll lower it to attract more products and services.

> But yes, overall most people will stick with Apple regardless. I still see it as a win that companies who want to put the work in to go around apple can. That simply seems reasonable in my eyes

When you think about it, there's maybe half a dozen companies that truly could put in similar work to Apple or Google in creating and maintaining these stores and platforms at the scale and with the features and security that they have built. Most people are going to stick with Apple and Google, except when one of those large competitors like Meta decides to bypass those stores and create its own and continue to nudge folks to their store for various features or downloads or whatever. It introduces friction for no obvious benefit to customers.

You can argue that 3rd party app stores will be more permissive in what they allow, but most of the things that people complain about "scary surveillance" or other onerous regulations for example have to also be followed by any legitimate App Store. So all you've really done is create worse versions of the Apple or Google App Store that siphon away applications. It reduces the profit margins of Apple or Google but it doesn't benefit customers.

Do you object to other sorts of royalty-based compensation, like for Unity engine or Unreal engine?

Pick 3 imaginary games for sale priced at $1, $10 and $100. Any one of those games could be a million download a month success, and any one of them could be a complete dud.

What flat rate would you suggest to: * Pay the developer for their work (ongoing per sale) * Review each game and ensure it meets store guidelines (once per update) * Host said game regardless of how popular it is (ongoing) * Process transactions for the game (ongoing)

The alternative would be pricing based on revenue tiers (similar to what Unreal Engine does now), which aren't known in advance and don't take global variance into account (USD$200 in Eastern Europe might be a month's salary).

Percentage is just simpler. It also means that they'd be taking a loss on every free app or in the case of Free-to-Download In-App purchase apps - until users start transacting.

If something gets super popular, it presumable costs Epic more. But does 100 sales cost 100x more than 1 sale? That seems unlikely.

The scaling also helps so that some (probably most) games aren't losing money to be hosted kn a store. That would be catastrophic as at some point games would need to remove themselves to name financial sense.

Doing it this way makes no economic sense for either the seller or the buyer but it's coincidentally the absolute best way for a middleman to maximize the tax they can extract from a two-sided marketplace they control. In competitive markets, blanket taxing on total gross revenue generally only occurs when there's a single fundamental cost structure tied to that revenue, or the amounts being collected are so small it's de minimis. App stores are highly profitable, multi-billion dollar businesses.

Perhaps the most perverse thing about this is that electronic transactions for purely digital goods which occur entirely on real-time connected digital platforms make it trivial to price each service for maximum efficiency. It's easy for the price a 2GB game with frequent updates pays for electronic delivery to reflect the cost they impose on the infrastructure while a 100k one-time purchase app can pay vastly smaller amount. And that's exactly the way the competitive marketplaces evolve - from moving shipping containers around the planet to residential propane delivery.