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App Store? Google Play? Some of us had conflicts with them…

Even in June, this post would have been valid when the team of Basecamp clashed with Apple in connection with their new HEY Email application, however, now due to the “Fortnite conflict”, the topic has become even more relevant.

What’s the source of the problem?

In both cases, the debate derives from the payment within the application, however, there are significant differences:

-while in the case of Hey it is about an application that raises business productivity and monthly subscription

-in the case of Fortnite it is about free-to-play games with micro-transactions

The latter even goes further: relying on the Unreal Engine and Fortnite, it builds its own metaverse at a high pace with its own play store, cloud game platform, and payment system.

Their interests are common in terms of planning to change Apple’s in-app purchase system. No surprise happened: Apple and Google immediately banned the applications from their stores. We can be sure of the fact that both teams prepared for this.

Fight for a better user experience and a higher margin.

They intended to decrease the high fees radically (during the first year 30%, from the second 15%) and set their own solution instead.

Of course not in the case of every application will the owner companies pay if somebody subscribes to the service or pays for something. Most of the companies avoid this fee by the payment transactions that are not happening in the application but their OWN, dedicated web service.

That’s the same in the case of Netflix, Spotify, Microsoft 360, or the Amazon Store, that’s what the owners do. For sure it could have happened like this in the case of Hey and Fortnite apps but that is obviously a worse user experience and they would have lost a lot of income.

At this point, the interest of the companies inevitably differs.

Where did the App Store start?

To see the situation more clearly, it’s worth getting back to 12 years ago, right before the App Store was created. The software business was completely different then. I’d highlight four significant problems:

from the side of the developers: 1. Piracy; 2.spreading

from the side of the customers: 1. Finding and trust; 2.

From the perspective of a development company, probably the biggest challenge was piracy. There is no consensus on how much it took but it did a lot for sure. There was a point then when PC gaming almost entirely collapsed as it wasn’t worth it.

It wasn’t so much a smaller problem to get their products to the audience: so spreading and availability.

On the customer side, the problem was with trust. “I’ve found sites and apps but can I trust these? Won’t I get a virus if I download these?”

And then there was the case when I knew what I wanted and I found it on a random page but then comes the hesitation: ‘Shall I pay here? What if some kind of problem will arise?”

By this time Apple has got a nice experience on Itunes’ music distribution site and managed to solve a problem between music producers and consumers. Several problems came up but they managed to solve them and moved forward the spread of digital music.

The App Store ecosystem

Based on all these they established their App Store product, which is a sensitive ecosystem, in which all the builder stones are very significant:

-the IOS platform where the ratio of unlocked devices is low

-APIs are strictly closed, developers are locked out of the system

-Seriously pushed updates that don’t leave anybody behind

-the review team strictly limits what can get inside the system therefore harmful application rarely gets into the system

-the support team is also very helpful and effective, super open to give back your money

Apple set certain serious rules and built significant apparatus for these (even sometimes consisting of thousands) and several surveys show that their “trust index” from the customer side is very high.

How can this be measured?

Both sides have their own truth. Examining Apple’s side we need to say that Apple is a good owner and conductor of the app ecosystem. Of course, for some reasons, it insists on the current state:

-on the one hand, it is a very prospering business, therefore, they’re trying hard to get everything out of it

-trust would decline if certain components get to “outsider” hands

I think it is undisputed that these stores brought a lot of income for developers. They changed entire industries for instance Gaming.

From the side of the developers, it is obvious that 30% is a very significant part for the spreading, especially during the time of COVID-19.

What can be the solution?

At some point, I believe they should reduce the current percentage to some extent to help developers. I don’t think they would like to compete with Epic’s 15% (which already includes the 5% Unreal engine fee), but a little.

I cannot imagine a similar “several stores” model in the case of Apple as Android has and I’m not sure if customers would benefit from that.

The big question is where the current acts against anti-trust will lead.

What do you think?

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