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Would Apple allow a product in the App Store that didn't have any functionality in its default form without a required in-app purchase?

No but some limited functionality could be possible I think. Maybe a limited free play period or the ability to watch others play but not take part until they have subscribed.

You just gave me my new app's strategy for subscriptions to avoid this issue. Thanks!

You are welcome. Just out of interest which part? The watching without playing option?

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