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The Apple App Store cut is going to be reduced from 30% to 15% for smaller developers. This concession by the iPhone creator is sure to make a lot of app creators happy, but it has failed to impress Epic Games CEO Tim Sweeney who categorizes it as Apple seeking to “preserve their monopoly.”
A few months ago, Fortnite attempted to circumvent the 30% Apple App Store cut and Google Play cut by adding a “direct payment” option in the game. A few hours later, Apple removed the game from the App Store, prompting a lawsuit from Epic Games that is still ongoing. Apple has since appeared to make a concession to some developers by halving its revenue share for a portion of developers.
Lower Apple App Store cut is ‘hoping to remove enough critics’
Apple made the announcement of the lower Apple App Store cut this morning. Any developers who make less than $1 million in revenue for a calendar year are eligible for (a lower 15% cut as opposed to the standard 30% cut). This reduction won’t be applied automatically; developers must apply to the program and re-apply in future should they exceed the $1 million revenue threshold.
The vast majority of Apple App Store developers and hobbyists certainly bring in less than $1 million a year and this move will help make it easier for them to turn a profit. However, it won’t have that large of an impact on Apple’s profits — analytics company Sensor Tower figures that only 4.9% of Apple’s revenue came from developers making less than $1 million a year, meaning that the vast majority will still come from larger developers facing the 30% revenue share.
“This would be something to celebrate were it not a calculated move by Apple to divide app creators and preserve their monopoly on stores and payments, again breaking the promise of treating all developers equally,” Epic Games’ CEO Tim Sweeney said to Reuters.
“Apple is hoping to remove enough critics that they can get away with their blockade on competition and 30% tax on most in-app purchases,” he added.
For now, both Epic Games and Apple are embroiled in a lawsuit that is likely to stretch well into 2021. Smaller developers are sure to be happy with this latest move from Apple, but it doesn’t change the fundamental argument put forth by Epic Games. It will likely be some time before this matter is truly resolved, although there is one upside: players will likely be able to get Fortnite on iOS again much sooner.