How much App Store money is Apple leaving on the table?

To assuage regulators, first Apple and then Google cut their fees for small developers in half. Turns out they can afford it.

From CNBC’s “Google and Apple are giving up less than 5% of their revenue from apps with payout changes” posted Wednesday: 

New estimates from analytics firm Sensor Tower suggest neither Apple nor Google is giving up a substantial amount of revenue by changing the fees they charge developers.

The report follows changes Google announced on Tuesday when it said it plans to change the way it charges app makers on its Google Play app store, following a similar move Apple made in December.

Neither company is leaving much money on the table with their fee reductions, compared to the scale of their app store businesses, according to a new estimate from app analytics firm Sensor Tower:

If the 15% fee schedule on revenue up to $1 million had been in place on Google Play in 2020, Google would have missed out on $587 million, or about 5% of Sensor Tower’s estimate of $11.6 billion in Google Play fees for the year. If Apple’s program had been in place for 2020, Sensor Tower estimates that it would have missed out on $595 million, or about 2.7% of its estimated $21.7 billion in App Store fees in 2020.

My take: Unsurprisingly, big developers still paying 30% are not assuaged. Case in point: Epic Games’ Tim Sweeney…

7 Comments

  1. Greg Lippert said:
    Ok Tim, use your own payment processor. No in-app purchases allowed.. Must go through your own portal from your website. We will not give one bit of support. And your apps still need to be vetted by Apple and can be banned anytime.

    Don’t like your 30% cut. Okay. To get in our store we have a $500k annual developer fee to use our tools + a substantial monthly storefront rent. Don’t like it? Too bad. Our store was built by us to serve our customers. They are not yours. Access to them is not free.

    4
    March 17, 2021
  2. Fred Stein said:
    Sweeney needs to answer this’ “If Apple lets him run his ‘store’, what is a fair fee to pay Apple for all that they provide?”

    The App Store is not just a ‘card scanner’. It’s the store, the security, the full developer program, the attractive demographic etc. If Sweeney pays Apple a minimal 15% and adds his 12% fee to developers, the difference is 3%, meaningless.

    3
    March 17, 2021
  3. Jerry Doyle said:
    It was interesting listening to the “Basecamp” co-founder David Hansson’s interview on “Squawk Alley” when the CNBC business anchors interviewed him. All Hansson did was describe how he and other Developers were being raped, pillaged and prostituted by Apple while at no time denoting the access Apple’s platform afforded Developers to over 1B of Apple’s more affluent customer base along with the plethora of platform services Apple provides to Developers to operate on Apple’s platform. From Mr. Hansson’s presentation it all is how he and Developers are being violated and mistreated while at no time denoting all that Apple provides Developers and Apple users in return. There’s an answer I have to give to Mr. Hansson and to other Developers. My answer is if you do not like the service that you are receiving from Apple then go elsewhere; and, there are other avenues Mr. Hansson and Developers may pursue. So, the question is why don’t they pursue those other avenues? The answer: because they want access to Apple’s affluent customers by being on Apple’s platform & they don’t want to pay to to do so, but they want to charge Apple’s consumers to use “Developers” services. Consumers should revolt & demand Developers give away “their” services for free or reduce significantly “their” service fees as Developers ask Apple to do.

    2
    March 17, 2021
  4. Greg Lippert said:
    Infuriating. I just don’t get how the app store and marketplace these platforms create and provide don’t deserve a cut (Apple and Google)?

    Furthermore that Consoles are getting an exception? Why? Makes zero sense.

    Lawmakers are buying into this crap. It is inconceivable to me.

    If Apple were to provide the App Store at no cost, would these develpers pass any savings on the consumer? Fat chance. Self-serving garbage. (I’d like to use more colorful language).

    4
    March 17, 2021
  5. Dan Scropos said:
    I believe Fortnight is the most profitable game of all-time. It’s okay for him to make $7 billion, but the platform responsible for the loyal, secure base of fans can’t take 30%? His margins are exponentially more than Apple’s.

    2
    March 17, 2021
  6. Kirk DeBernardi said:
    Put simply (here we go again), its Apple’s store on Apple’s platform.

    Profit margin for all.

    Once again, it’s only its size, scope and success that turns the stomach of developers and would-be regulators.

    This “size & influence” argument that there must be “public utility” comparable control escapes me.

    I work at a grocery store. The company authorizes what gets brought into the store for sale. How is a damn app any different than a can of beans?

    Can anyone explain the difference?

    1
    March 17, 2021
    • Kirk DeBernardi said:
      One more thing.

      When Apple designed the App store, a group at Apple had to come up with the revenue split percentage. They decide 70% to developer — 30% to Apple.

      Done deal.

      Next step, announce the App Store to the public and the details of it’s cooperation.

      Developers bought in. Didn’t argue one whiff about it. A robust app developer community grows and becomes a continued and growing success for all.

      What’s different today?

      Who’s singing the greed song now in this arrangement?

      2
      March 17, 2021

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