They could adjust the app store tax to a more reasonable level, such as flat 15%. Even 20% would make it much less severe. But those bean counters never wanted to take charge of this revenue drop and losing competitive price advantage from the 30% fee on other services, so there they are.
As I have been saying this since 2015, they should have launch the Game Store as a separate thing, and keep that 30% cut. Gaming accounts for ~75% to 80% of all App Store revenue.
And then just gradually lower the other App category 5% every 3-4 years, We would have arrived at 20% by now and looking at 15% in ~2025 without possibly little backlash.
Instead they decide to keep those 30%, and continue to offer AppleTV+, Apple Music, Arcade, Fitness, News and all other services operating at zero margin for potential to customer lock in.
From all the public information and readings I am willing bet this is a strategy championed by Eddy Cue and ultimately won in the internal Apple Discussions.
You needed Visual C++ (which if you could use the standard edition, looks like it would run you ~$120). $400 annual signing certificate, $1500 for the BREW Builder compiler, anywhere from $750 to $3,600 in testing and certification costs depending on what functionality your app needed, what additional testing the carriers required and how fast you wanted it done. Finally after all of that, you still needed to negotiate your pricing plan with each carrier, of which you as a developer got to keep 80% of the wholesale (not retail) price of your application.
So in sum, to start developing for phones, you needed to have between ~$2,700 and ~$5,500 in up front cash costs. Not counting the costs for phones to test on because realistically you need that today too. Then you got 80% of your wholesale price to each carrier. And while I don't have numbers for the retail markup the carriers were applying, I'd bet it was higher than 10%.
Given that, what's Apple's incentive to voluntarily go down to 15%. If 10 years from now they're fighting the same battles again and people are asking why they don't just go to a "reasonable 7.5%", what good did they do dropping the price before they absolutely had to?
> The thing is a flat 30% used to be the "reasonable level".
That's almost 20 years ago and the market size was significantly smaller, so they could justify 30% to run the ecosystem. In fact, Phil Schiller actually thought 30% won't last forever if there's any competition. The only reason they could keep the 30% tax is the mobile market duopoly.
Phil Schiller is in the process of following SEGA footsteps, turning XBox into a brand for Microsoft Game Studios, where the XBox console becomes irrelevant, if it stays around even.
So naturally he cares about what other stores outside XBox charge.
You won't see him proposing cheaper charges for game devs targeting the XBox console.
The incentive is that the alternative is a fair competitive market is forced upon them and they find that market forces drive the rate down to basically no profit because it’s “just” software distribution.
