On both sides of the Atlantic, the "apple tax" seems to be failing.
On January 16, the App Store in the United States adjusted its policy to officially support third-party payment methods, and Apple's commission ratio dropped from the previous 30% (15% for small businesses) to 27% (12% for small businesses).
On January 25, Apple announced that in response to the European Union's Digital Markets Act enacted at the end of last year, EU users will be allowed to use third-party apps**, and the commission rate will be reduced from the previous 30% (15% for small businesses) to 17% (10% for small businesses), and the measures will be implemented in March and will only take effect for EU users.
A new business for iOS apps in the European Union Apple
Previously, any app on the Apple Store had to pay a 30% commission for the app's built-in value-added services, known as the "Apple tax". Since 2011, it has been levied for 13 years, and the world has suffered from the "apple tax" for a long time.
In fact, Apple's successive "deflated" in the United States and the European Union is not a "cool article" of "small people defeating giants". The interests of platforms, app developers, and consumers are intertwined, and their respective profit or consumption models are all complex games.
Epic vs. Apple in two rounds
Epic was the first to "eat apples".
Founded 33 years ago, Epic Games is one of the most prestigious gaming companies in the world. The game engine "Unreal" developed by it has been listed in the "Guinness Book of World Records" - the most successful ** game engine". Popular mobile games such as "Genshin Impact" and "Honor of Kings" are all built using the "Unreal" engine.
Fortnite, Gears of War, and Infinity Blade are all Epic's trump cards. "Gears of War", which landed on the Microsoft console Xbox 360 more than ten years ago, was a first-class masterpiece of its era.
Cover of the game Gears of War.
Things are bad on Fortnite.
In 2017, the "battle royale game" Fortnite: Airborne Operation was released.
Screenshot of the game Fortnite.
That year, the game of "eating chicken" took the world by storm. Let the slogan of "Eat Chicken Tonight" resounded in every corner of the Internet, breaking the highest record of the game platform Steam at the same time - 13480,000 people.
"Chicken Game" is a remake of "Battle Royale Game". Japanese director Shinji Fukasaku's film Battle Royale (2000) took the world by storm, making "battle royale" a new cultural concept: a multi-player survival competition to the last man.
The elements of the "Battle Royale Game" are: **When online, unarmed players have to explore, collect information, and ensure their own survival; You have to fight other players until you get rid of your last opponent.
Stills from the movie "Battle Royale".
Fortnite: Airborne Operations sold exceptionally well, with Epic launching eSports tournaments and Epic Games in the same year**. When the full platform goes live, on Apple iOS and Google Android, players can bypass the platform and pay directly to Epic.
Apple and Google immediately removed the game on the grounds that Epic had violated the "Terms of Service" — in fact, it didn't let the platform take a cut. On this day, Epic filed a lawsuit against both companies at the same time, accusing them of monopoly.
Epic is famous, but it's a huge difference in size from Apple. Apple is now valued at $3 trillion, close to Malaysia's annual GDP, which ranks 35th in the world. Epic is valued at just over 30 billion points. Even in 2017, the valuation gap between the two was around 100 times. The first to jump out to sue Apple, Epic can indeed be regarded as "small and big".
Since the release of the "Apple Tax" clause in 2011, Apple has been relying on it to "lie down and make money". In May 2023, Apple cited a research report from Analysis Group that the "Apple tax" extracted that year was $31.2 billion — almost equivalent to Epic's valuation that year.
In 2022, App Store developers created 1$1 trillion in total bills and sales from Apple
In the lawsuit, Epic boldly opened the microphone, arguing that Apple, founded by Steve Jobs, has gone the opposite of its original intention, from an innovative force to a "behemoth" that "tries to control the market, prevent competition and stifle innovation". Epic also does not want to seek monetary damages from the courts, it is "not for its own selfish interests" and wants to achieve "fair competition".
And when Apple CEO Tim Cook was asked by Congress, he said lightly that the App Store was "an economic miracle" and could be "the highest job creator of the last decade" — knocking on the "fair" appeal for small game companies and sacrificing precious jobs.
In September 2021, the court ruled against Epic's lawsuit. But Apple, the winning party, received a national ban that could not prevent developers from using third-party payments.
In November 2022, the "dissatisfied" parties appealed again. In April 2023, the Court of Appeal largely upheld the original verdict.
The makers of Fortnite released a parody of Apple's famous 1984 ad**, in which Apple plays the role of the "bad guy" Soyacincau
In the end, both sides pinned their hopes on the Supreme Court. In January 2024, the Supreme Court refused a retrial, forcing both parties to accept the initial verdict. Epic still lost the case.
The legal battle was lost, and the struggle was won. On January 16, the App Store in the United States adjusted its policy to officially support third-party payment methods, and Apple's commission ratio was reduced from 30% to 27%. Although it is only 3%, it is enough to give some psychological comfort to the majority of developers.
"Thinking about money and going crazy".
Epic vs. Apple is a showdown between app developers and platforms.
App developers are having a hard time, unlike Apple that can lie down and make money - behind the dissatisfaction is a sharp imbalance between the rights and obligations of the platform. Because the essence of "tax collection" is to achieve a balance between rights and obligations.
But Apple argued at the hearing that many other platforms also charge developers a fee to make apps available on other platforms. Fortnite, for example, is available on many different platforms** – Android phones, handheld consoles, and PCs.
Fortnite on Xbox
Indeed, Microsoft's console Xbox and Sony's console PlayStation also take a 30% cut of the cost from game developers. But unlike Apple, they sell hardware at a loss, while Apple hardware makes high profits.
The bigger difference is that while game console manufacturers get a 30% commission, they need to bear a series of costs such as console research and development, upgrading, and sales (loss-making sales), as well as corresponding risks. In the Internet era, the cost of the mobile phone system platform is compressed to a very low level, and with the monopoly effect, the risk is almost zero.
No wonder David Cicillin, chairman of the Antitrust Committee of the US House of Representatives, has a figurative metaphor that a 30% "apple tax" is equivalent to a "highway robbery".
The vast majority of tech companies have passed the "Apple tax".
Netflix, a streaming service provider, complained, "The copyright cost of our content, the production cost, the distribution of traffic costs, etc., all need to be borne by ourselves", and Apple plays a negligible role in this process, just waiting to "sit back and enjoy the results".
Apple CEO Tim Cook speaks at Apple's Worldwide Developers Conference.
However, Apple is certainly "ruthless", and the ** of app developers is not as "great" as it seems.
Just like Facebook founder Zuckerberg denounced the injustice of the "Apple tax", and when his metaverse platform Horizen World was launched, the commission was 475%。Musk also complained about Apple's "goose plucking", and after he acquired Twitter, he would take a 10% cut from content subscriptions in the second year.
As the saying goes, "you draw my success, great partiality, a rare moral defeat in the world", and when the identity changes, "I draw your success, fairness, justice and openness, reasonable market competition".
In fact, the platform tax can be traced back to the 80s of the 20th century, when Nintendo's red and white machines were so successful that third-party game developers flocked to the platform in the hope of putting their games on the red and white machines, for which they needed to pay a lot of royalties.
The platform provides a consumer-facing publishing channel for game developers, and a large number of third-party games enrich the platform's ecology for mutual benefit and win-win results. The 30% ratio was born, which means that the profit distribution between console platforms, game developers, and game distributors is relatively "equal". Not only the 30% commission of the App Store, Xbox, and PlayStation originated here, but also the 30% commission of Google Play and Steam.
Each platform is divided into analysis groups
Therefore, game platforms, game developers and game dealers have been able to maintain a 30% commission for more than 30 years, which has not caused public anger, and the "Apple tax" has been collected for 13 years.
And of course, don't forget Epic.
In September 2023, Epic announced that its Unreal Engine 5 would begin January 1, 2024, with a "setup fee" for all users who meet the criteria—a per-installs fee. As soon as the news came out, the game developers were surging, and the clause could not be described as "ugly", it was simply a "killing pig" style of rampant expropriation.
Generally, the game is charged, either by selling copies, or depending on the actual number of sales. And a single purchase can result in an infinite number of installs. Once a player installs repeatedly, the game developer has to be wool cut by Epic once.
Isn't this also "crazy about money"?
Spend money to buy sin
In the real world, the stories of "Brave Warriors vs. Dragons" are rare, and the stories of "Brave Men Turning Dragons" are common.
When the huge iOS and Android platforms are installed on every mobile phone, app developers calculate the costs and benefits from the perspective of a fixed "platform tax", which naturally leads to a "subscription hell" for consumers.
We simply can't go back to the era when we could buy an app game for 1 yuan and didn't have to pay for it. In the era of platform tax, everything is "subscription": pay the money, and the right to use the product is temporarily yours. If you don't pay, don't even think about the product and the right to use the product.
In the era of platform taxes, everything was "subscription-based" Apple
Perhaps, in the eyes of consumers, it is "cost-effective" to buy a "monthly pass", "season pass" or even an "annual pass" to enjoy tens of thousands of good records, good movies, and good games; In fact, "cost-effective" is extremely deceptive, and a person's ability to consume and digest content is limited for a certain period of time.
The reality is that you spend 999 yuan on an annual fee, thinking you can watch 1,000 movies, and at the end of the year, you only watch 10 movies - you spend 99 on a movie$9.
"Subscribe to hell", in fact, is the luxury buffet model of a five-star hotel: it is not worth the ticket price anyway. Because "good things" are limited, and "ordinary things" you can't eat much if you try hard.
Just like the self-service of 2,000 yuan per person, everyone thinks that they can let go of eating 10 Alaskan king crabs, and when they look at the plate, there is a sign on the table that says "each person is limited to 1", and then eat two lamb chops and can't walk, and walk out of the door with tears.
Apple company logo
On the other hand, how does a consumer count as "value"?
You can only rely on "volumes". The annual fee is 999 yuan, watching 1,000 movies, an average of 1 yuan a movie, it is definitely worth it! But that means watching 3 movies a day, and who can do that?
It's obviously spending money to buy entertainment, how can you act according to KPIs? The mentality is more tired than when you don't spend money.
The implication of the "subscription model" is that consumers "force" themselves - the money is not worth it, you have not worked hard, and it has nothing to do with the application developer and platform.
In other words, the Apple tax and platform tax are a matter of earning more and less for platform and app developers, but for consumers, there is a "spending money to buy PUA" experience everywhere.