The Epic’s Fornite Standoff is Putting Apple’s Cash Cow at risk. Apple and Epic Games are in a war over Apple’s App Store policies this was released on the Verge August 17, 2020 (Good morning here is that code pls remember to give her thanks Nneoma Munachimso Dennis NG003745431). The Epic is protesting in Apple’s 30 percent fee charges for any digital transactions on its iOS platform, attempting to avoid using a direct payment option in “Fornite” this has resolved to Apple to place a ban on the game totally.
However, Apple’s Fornite fight is not only on a policy for the App Store, but it so a battle that can also decide the future of one major aspect of Apple’s present and future business. Continue to read this article to know more about Epic’s Fornite Standoff is Putting Apple’s Cash Cow At Risk.
Epic’s Fortnite Standoff is Putting Apple’s Cash Cow At Risk
As mentioned above, the Apple and Epic Games battle is over the 30 percent fee charged by Apple on any digital transactions on its iOS platform. However, the 30 percent “Apple Tax” is the center for Apple’s services business which has been seen as a growth margin for the company as a business is slow.
This part of the business has become a critical part of Apple’s business. According to Apple’s Executives on a report on the company’s earnings, Apple executives label the revenue line as “Services” obscure where the money is actually coming from and onstage.
The Apple executives talked on their prestige products like Apple TV Plus, Apple Arcade, Apple News Plus. The actual money gotten from these services is little compared to Apple’s cut of the money that flows through its App Store. And from its power to force major players like Spotify, Adobe, and even Epic to pay the toll charges.
Now Apple’s fight over Fornite it’s not just fighting over one app or one policy. It is about protecting one of the major sources of revenue in the year ahead. And it may be a channel that may be loose forever if Epic wins.
THE APP STORE WAS Almost 40 PERCENT OF APPLE’S TOTAL SERVICE REVENUE IN 2019
The App Store is a mobile online store for Apple. It started small but now has become the major source of Apple. According to record, in 2019 only, The company’s percentage gotten on digital content that was sold via the App Store was estimated up to $18.3 billion. Or nearly 40 percent of Apple’s total service revenue.
On the other side, Apple announces that the sold $61 billion of digital content was sold in 2019 and took a cut of an estimated $18.3 billion. Compared to the $46.3 billion Ape reported in services revenue on its collected quarterly earnings in 2019.
This is earnings made by Apple fro. In-app purchases in free-to-play games like Candy Crush, Fornite, and Pokémon Go. Also, including subscription apps such as Tinder YouTube, Twitch, and Disney Plus. Recently The SensorTower reports that top of the 200 grossing iPhone apps except Minecraft need money upfront. Apple needs those payments to flow through the app store so that it can collect on those purchases and subscriptions.
Fortnite’s Epic Battle with Apple-the Bedrock
When Apple started the app store business it was built for hardware customers to pay for quality but not for Apple’s reliance on App store revenue. First, in 2008, Apple announces that developers will get 70% of whatever they sell and they will keep 30% for upkeep.
According to Apple CEO Steve Jobs saying that “We don’t expect this to be a big profit generator.” With this, Apple’s original model for the App store did not make profits off paid apps, and the free apps will serve the gateway point to drive customers toward spending more money.
This happened when Apple added support for in-app purchases in June 2009. At the time, it was only limited to paid apps looking to add additional content, and with limits on subscription models. “Free apps remain free” boasted Apple’s then-mobile software head Scott Forstall at the announcement.
This policy was only implemented for five months until Apple opened up and start allowing free apps to add optional purchases which today have dominated the App Store and Play Store charts and net gross since.
But as business models changed and the amount of money that followed through apps grew, Apple started to tighten its grip. In 2011, according to a report from NYtimes, Apple barred developers from selling subscriptions or in-app purchases unless they were sold through Apple’s system (and submitted to Apple’s 30 percent tax).
However, companies, like Netflix and Hulu, complied with the change. Others, like Spotify, charged a premium on iOS to account for the extra fee and encouraged customers to seek subscription in another store.
And others, like Amazon, took their heels, refused to pay Apple’s fee, and enabled the ability not to purchase content in their app totally. (To date, Amazon’s iOS Kindle app still has no option to purchase books directly, although Amazon has managed to with them for its Prime Video app.)
Epic’s Fortnite Standoff is Putting Apple’s Cash Cow At Risk is an interesting article. To get more information, visit The Verge.