Becoming an app millionaire in the Apple cosmos will be a little easier in the future. The tech company from California wants to demand less commission for purchases in the app store from smaller developers and studios soon. So far, the company has been collecting 30 percent for sales made in the app store. In the future, the contribution for studios that earn less than one million dollars a year is to be halved to 15 percent.
As a reason for the step, Apple cites the difficult economic situation for “small businesses”, i.e. smaller companies, in the Corona crisis. The program should remain permanent regardless of the pandemic. In fact, Apple’s move should also be about the dispute with the game developer Epic Games, which hit the barricades a few months ago against the app commissions.
In order to benefit from the reduced commission, developers must actively apply to Apple for the discount. Apple then checks the revenue generated through the developer’s ID. If they are less than a million dollars in the previous year (after deducting the Apple commission), the discount is granted. If the developer exceeds the million mark in the following year, the 30 percent share of the additional income is due. In the following year, the normal commission would be due again until the income falls below the threshold again.
Apple listens to the little developers
Such details could lead to some thought acrobatics in small but growing studios. If you run the risk of slipping just over the border soon, you could be forced to bring out new apps under a different name or to get creative in some other way. The Swiss developer Oliver Reichenstein is also thinking about it a few times. First and foremost, the head of the Zurich studio “iA” is happy about the announcement: “I’m surprised,” says Reichenstein on the phone, “but I think it’s great that Apple is showing that they are listening to the little developers.” The 30 percent commission would have mostly swallowed his profit pretty much. The halving of the commission finally gives him more leeway.
According to Reichenstein, the loss of sales for Apple is likely to be marginal. “In PR we are always pushed forward, it’s also a good story that we little ones can make money like that and don’t have to work for bad companies,” said Reichenstein. Most of the revenue in the App Store comes from big games, followed by Microsoft, Adobe and other giants.
For Apple, the campaign is cheap PR, but at the same time a noticeable improvement for the small developers. Win-win as it is in the book, right? There really are no clear losers. With a little effort, the EU and Epic Games can be identified as such. The “Fortnite” maker, because their complaint about excessive app store commissions has now been blown out of the sails. Many had approved the fight Goliath (Epic) against Goliath (Apple) also because many Davids had to suffer from the high commissions.
The case is similar with the EU. The Apple and Google app stores are threatened with government regulation in the future. One argument: the app store duopoly of the two US companies with its high fees prevents innovation and the growth of smaller companies. That argument has lost some of its strength, at least in relation to Apple.