Microsoft Says Apple's 30% Fee Makes Xbox Cloud Gaming iOS App 'Impossible'

https://www.macrumors.com/2024/09/03/microsoft-cloud-gaming-ios-app-impossible/

by mfiguiere • 2 years ago

49 82 2 years ago

tw042• 2 years ago

It still is absolute insanity to me that Apple charges 30% for distribution. Real life disti of physical goods is 1-5% in the business I’ve dealt with. Transportation is generally a rounding error on an order of any significance.

30% is considered a healthy margin for the entire product sale.

gtvwill• 2 years ago

It's price gouging. When you have a monopoly (your the only source of apps for an iphone and no the existence of android doesnt make apple not a monopoly) and your a hardware company. You've just hit the jackpot and literally charge whatever you want. Fingers crossed ACCC or the euros slap the company with some anti monopoly laws and force the monopoly to be split up. Separate hardware from software. Make hardware software agnostic. Fine the hell out of then for their anticompetitive actions and their just straight up negligent wasteful hardware design.

golergka4• 2 years ago

the existence of android doesnt make apple not a monopoly

How come? User doesn't have to buy an iPhone. Many buy Androids exactly because Android has some apps that they want, so not only it is a competitive market, but it's also a market where this exact issue (whether certain apps are available) drives (in part) user decisions.

scarface_744• 2 years ago

While even if I agree, is Microsoft the right company to complain as far as XBox?

And making hardware “software agnostic” you end up with the crap like Android and Windows.

There is a reason that consoles exists - where the hardware and software are integrated

dijit5• 2 years ago

I think the elephant in the room is that Apple is just doing what other closed platform distributors do, in an area where we aren't quite as used to it.

I make AAA video games, so 30% for me is basically standard.

* Valve: 30%

* Playstation: 30%

* Xbox: 30%

* Nintendo eShop: 30%

It's only the competitors that give better rates in the open-ish platforms, but people *openly* hate them; (I legitimately still have people denigrating uPlay and EPIC to my face, aggressively, when they find out what games I make).

* Microsoft Store: 15% (12% for games)

* EPIC: 12%

I'm sure there's not much sympathy for AAA here, and it's the nature of consoles to sell the hardware at a loss (something not true for iPhones), but for me when I see the outrage I'm always incredulous.. as this already existing and accepted ecosystem is what Apple are modelling.

I find it ironic that Xbox of all people would complain.

Red_Leaves_Flyy• 2 years ago

I am especially curious what games you make to have such experiences and strong opinions. Interesting that you left that part out.

manquer• 2 years ago

ironic that Xbox of all people would complain

They are not complaining, they have only responded(in June) to a EU watchdog query and saying it not possible for them pay for IAP at 30%[1] to Apple and sell profitably, even though EU made Apple open up the App Store in EU recently.

[1] Apple does not mandate using their IAP per se, but forbids instructing on how to pay outside etc i believe.

daghamm3• 2 years ago

I think this is an invalid comparison.

1. Steam is voluntary, you are free to instead use gog, epic, whatever or maybe buy physical boxes from the devs.

2. PC games these days can be huge. The hosting cost alone will be significant.

3. Valve have significant R&D costs for getting games run smoothly in multiple environments, some of which they have no control over.

4. It's up to 30%.

tehbeard• 2 years ago

Part of what is missing with those raw numbers, is what you get for it as a developer.

I don't know about the others (And Nintendo's in particular is probably ironclad in NDAs and lawyers if their attitude towards their userbase is anything to go by), but for Steam you can read all about the technical, financial and sales/marketing features you get through the platform here: https://partner.steamgames.com/doc/home

EGS and MS Store compete on a lower %, partly because they offer less of this.

jsheard• 2 years ago

Valve has had a tiered system for a while now, it does still start at 30%, but then it drops to 25% for titles with >$10M in revenue, and again to 20% for titles with >$50M in revenue. They switched to that model after the major publishers started leaving Steam and releasing on their own launchers instead, so Valve structured it to give those AAA juggernauts a discount while still taking 30% from the small fry who basically have no choice but to release on Steam.

cybwraith• 2 years ago

From a consumer perspective, Valve is the only one that comes close to deserving that cut. Between Proton, Steam Input mapping, Remote play, Family Sharing, etc... they are by far the most feature rich platform

echelon• 2 years ago

With gaming:

- You're not producing a good that people need. Gaming entertainment is actually a pretty thin segment of goods.

- You can get free distribution easily (desktop, web, etc.). Other platforms are just increasing your market opportunity and you can charge a thicker margin to get onto them if you want to.

- Physical distribution has costs

- Servers and multiplayer have costs

With mobile:

- Applications do everything from dating, jobs, food, payments, etc. It's anything and everything, and a lot of them are absolutely essential for modern life.

- Apple and Google are the market. There is no alternative. They're a duopoly and embed their talons into everything.

- The app store is artificial. There's nothing stopping web downloads of applications, and any security concerns could be met with signing, risk signal heuristics and reporting, and application sandboxing.

There should be no "App Store Requirement" to deploy a native app. Period.

Furthermore, there should be no requirement to integrate with the duopoly's payment stack, messaging stack, or any other platform choice enforced upon you.

Affric• 2 years ago

Yeah, but the problem with that is EPIC isn’t great on Linux, the licenses aren’t portable, and the stores can increase their fees at will once they gain market position.

In fact, if you become market leader for AAA it would arguably be your duty to shareholders to put it up to 30%

Consumers don’t actually want to be in the business of dealing with many different systems to minimise their costs in these sorts of markets.

Steam are predictable and are yet to dick me. Can’t say that about many companies having dealt with them for 20 years after regular consumption.

voidwtf• 2 years ago

I am conflicted. I love Valve, but 30% seems like a lot. On the other hand, I doubt the developers are being charged for the bandwidth or for Steam platform integration. Which means that long after the developer has walked away with their money for the sale Steam is still providing licensing management, platform integration in the form of user management, and the bandwidth for every time the user redownloads the game at 0 cost to the user.

While that fee may seem high, the developers are in someways subsidizing other developers that could never afford to build and maintain that infrastructure. They're also reducing the friction and on-ramping of new players/users. They are also providing the payment processing and handling billing/chargeback resolution.

Just the merchant fees alone would be would be 2-4% of revenue (not including losses to chargebacks and fraud/risk controls). The raw cost of bandwidth usage would be ~2 cents per 12GB game download (not including infrastructure to host/facilitate the amount of simultaneous downloads). The staff to manage billing issues/refunds. The raw amounts are small, but not insignificant considering that for every $20 they collect on a AAA title there are several indie games getting all the same functionality which only nets Valve $2.

Valve, Epic, Playstation, Xbox. The platforms are providing the ecosystem and platform that has allowed gaming to flourish at incredible rates, outpacing the motion picture industry and the sport industry.

zaptheimpaler• 2 years ago

The surprising thing is that PC is an open platform where people could compete with Steam on even terms if they actually did it well. Gamers don't like installing 5 different game launchers and Steam is the oldest one with all their games and is mostly a neutral party.

I recently installed Playnite [1], an open source game library manager and its been incredible. It pulls in games from all launchers/sources and gives you a unified library. I think all it would take to bring down Steam prices is for studios to adopt one such project but they are too blindsided by the ambition to have their own platform. You still have to do all the downloads,licensing etc. but the fact that it's a unified launcher for all stores is enough for me to prefer it over others.

[1] https://playnite.link/

saurik• 2 years ago

FWIW, there are large publishers which successfully negotiate with the ilk of Microsoft[1] and Sony[2] to get a better revenue split, as consoles in fact have more functional competition than mobile phone app stores: people who own a gaming console might could reasonably own a second one if they were interested in some game that was only available on one console or the other; this simply doesn't happen with phones, as only a small handful of particularly-crazy power users would ever carry around a second cell phone. If you want to not release on Xbox unless Microsoft gives you a better deal, it doesn't sound anywhere near as ridiculous to tell your potential customers "you'll have to also own a Playstation" as if you tried to explain to people that to use your new social network they have to also own and carry around an Android phone (or, worse, whatever the third option might be... is there even a third option anymore that would make any sense? ;P). You can tell that Apple has some insane amount of fundamentally market-distorting power as they seriously charge large publishers -- the ones you would expect to have the most leverage -- more than smaller ones; and, with maybe a sole exception of WeChat, we have never heard of anyone getting a better deal out of them, ever.

[1] https://x.com/tomwarren/status/1671981463040819200?s=46

[2] https://x.com/twthereddragon/status/1672270407179665409?s=46

kderbe2• 2 years ago

Some of these platforms are less closed than others. Steam, for example, will give developers "Steam keys" for free to sell on other platforms or through their own storefront. So a developer can sell on Itch.io which only takes 10% (IIRC), the customer can use their preferred game client, and Valve pays for the bandwidth.

Can you imagine Apple or Nintendo doing such a thing?

https://partner.steamgames.com/doc/features/keys

golergka4• 2 years ago

Real life disti of physical goods is 1-5% in the business I’ve dealt with.

Back when we bought games and software as physical goods, retailers used to get around ~30% too. In fact, they still do: https://www.serkantoto.com/2020/12/30/price-video-console-ga...

scarface_744• 2 years ago

You realize that Microsoft does the same thing?

Even with physical media sold for XBox, you still have to pay a per unit fee.

hajile• 2 years ago

Real-life distributors ship your product ONE time. Imagine if they had to ship another every time they were asked forever. Those real-life distributors also don't advertise and sell your product for you either while providing an entire platform for you and your users to interact.

I'm not saying that 30% is where it should be, but expecting higher costs for all the extra services provided isn't unexpected either.

tw042• 2 years ago

Imagine if they had to ship another every time they were asked forever.

The bandwidth and storage is an absolute rounding error at apple’s scale. If they want to use that as an excuse, then charge app makers cost for downloads. I can promise you it’ll never come close to 30%.

cogman10• 2 years ago

I don't think that's really terrible. The worse problem is that above distribution apple wants 30% on all transactions for an app on their platform, which is insanity. It's a major problem that just hit Patreon, all the creators are taking a 30% hit for anyone that signed up using apple for the payments.

I get it, they are trying to circumvent a "the app is free, but you activate it by paying us $5" sorts of things... but like it's just pure greed that any and all payments are subject to that sort of fee.

jauntywundrkind• 2 years ago

300%. Apple is a particularly obstinate egregious offender. But these other tech fiefs also keep up the same shit: Google's App Store, Valve's Steam.

It's insane and absurd but the market being able to define itself & how it operates is the change. We used to have property law which offered people who owned things rights. But today the world is entirely built by contract law, by mega corps getting to offer only terms of use highly slanted towards them.

The idea of personal computing bespeaks an empowerment, a possibility-ization. I adore the internet, but by far the mass trend of the internet and business has been to subvert control & dominate possibility, to intermediate every step of the way to computational thinking & it's open possibility with restraint, guards, and checks.

I truly believe we are emerging amazing potential to do better, to create much broader scopes of more. But getting past what a single piece of software or single site enables & scoping systems larger, with a pretense of perhaps maybe if we are lucky intertwingularity is the gateway to heaven, that which the dirtiest shittiest scum have bent computing diametrically away from & towards their rotten bought sold & paying for core. It's been hell.

falcolas5• 2 years ago

Soooo.... Microsoft is being a bit disingenuous here; their own cut from purchases in the xbox store is also 30%. I can't find a number right now, but their cut from xbox live is rumored to be even higher.

darth_avocado• 2 years ago

Which is why another 30% cut would make it impossible for the actual devs to make any money, unless of course, you charge more on iOS.

falcolas5• 2 years ago

Or reduce your own cut, like they expect Apple to do?

As always, the consumers lose when corporations fight. Even as they use us as their jurors in the court of public opinion.

kllrnohj• 2 years ago

How is it disingenuous? Are you expecting Microsoft to just give the entirety of their cut to Apple? Stacking 30% cuts on top of 30% cuts does quickly make things "impossible"

falcolas5• 2 years ago

Well, Microsoft expects Apple to give most or all of their cut to Microsoft...

They're both assholes in the size of their cut; don't pick Microsoft's side just because they spoke out first.

jamesrom2• 2 years ago

It's disingenuous in that they are both platforms doing the same thing.

Apple could argue that it's Microsoft's 30% cut that makes it impossible for developers to get their games published on the App Store. That too, would be disingenuous.

But Microsoft are making a PR maneuver that they can bring to the table to strike a deal with apple.

spandrew• 2 years ago

I mean... it's Microsoft's service. Both 30% takes are outrageous.

falcolas5• 2 years ago

"I mean... it's Apple's userbase. Both 30% takes are outrageous."

Agreed on both points.

blackeyeblitzar• 2 years ago

Taking cuts of everyone else’s businesses while also blocking competition to the App Store and side loading is very similar to mafia like extortion. I am not sure there are useful differences between the two actually. Or maybe it is like a government imposed revenue based tax. But if they’re like the government, let’s recognize that and subject Apple to all the regulation that follows.

wrs2• 2 years ago

It’s like if the mafia ran the shopping mall your store was in and wanted a cut of your sales. Oh wait, that’s how all shopping malls work even if they aren’t run by the mafia.

p1necone• 2 years ago

Is that actually common? I assumed most shopping malls would just charge rent.

frozenport• 2 years ago

What if they just charged Apple users 30% more?

apocalyptic0n3• 2 years ago

In the past, Apple explicitly forbade this except in certain negotiated cases like Spotify and Netflix if I recall correctly. Has that changed?

daghamm3• 2 years ago

Explicitly forbidden by Apple ToS.

You mention any of that and your app will be rejected.

scarface_744• 2 years ago

No it’s not. Spotify did just that before they removed IAP.

badwolf• 2 years ago

I thought they were going all-in on doing it as a web app/browser experience?

Terretta• 2 years ago

Microsoft's chief complaint is that the App Store rules require subscriptions and features to be made available on iOS devices with in-app purchase, which is "not feasible."

This is nonsense. There's no flat IAP requirement.

How do Microsoft have Microsoft Office apps? How are Adobe apps there? Or Amazon Kindle?

If you aren't selling from within the app, Apple allows you to sell things elsewhere and log into it from apps.

(This does impose an actual problem: they'd have to turn off their store from Xbox dashboard, and IAP from games, if inside that iOS app, or concede another 30%. BUT, they already have this code, given parental controls. Just flip the "no purchases on this device" flag, done.)

Further, if you want the "app", why? Playing Xbox using iOS works beautifully on iPhones and iPads today, just go to https://www.xbox.com/play and save that to your home screen. Supports controllers, and silky smooth. When I play games on an iPad 13" people freak out: "How does that work?" It has for years...

This obsession with "apps" is a bit silly.

lelandfe• 2 years ago

IIRC, Apple disallows instructing users how to purchase said things elsewhere.

It's a very weird position to be in as a user. For instance, I can't buy any ebooks on my iPhone's Kindle or Google Play Books apps.

Edit:

"There's no flat IAP requirement" - https://developer.apple.com/app-store/review/guidelines/

3.1.1 - If you want to unlock features or functionality within your app, (by way of example: subscriptions, in-game currencies, game levels, access to premium content, or unlocking a full version), you must use in-app purchase
[..]
3.1.1(a) - Link to Other Purchase Methods: Developers may apply for entitlements to provide a link in their app to a website the developer owns or maintains responsibility for in order to purchase digital content or services

So it looks like you can apply to host a link, though Apple isn't clear on when they'll grant it: https://developer.apple.com/support/storekit-external-entitl...

EU devs can seemingly just use them, though: https://developer.apple.com/support/apps-using-alternative-p...

jamesrom2• 2 years ago

This is a PR maneuver that Microsoft can bring to the table to strike a deal with Apple.

They want everyone to think of the iOS + App Store as just distribution.

They want everyone to think of Xbox Cloud Gaming as a platform for developers.

The reality is the difference between these platforms is not so clear cut.

downrightmike• 2 years ago

Good, Who wants to play on their phones. Didn't they learn from Blizzard?

hipadev23• 2 years ago

There’s an absolutely massive global audience of mobile gamers across native ios/android and roblox. Though I do think PC/Xbox cloud-streamed games are less likely to have control mechanisms conducive to mobile play.

theandrewbailey• 2 years ago

There's at least a billion people who play phone games. Blizzard's customers were expecting something different.

theshrike79• 2 years ago

Yes, who?

Mobile gaming is only a $244+ BILLION industry.

As a reference the whole global movie industry was around $85 billion in revenue.

Video games in general are a bigger industry than movies and sports combined.

0cf8612b2e1e• 2 years ago

Somewhat related, at Xbox, Valve, PlayStation scale, what are their bandwidth costs? Presumably paying a fraction of a cloud provider charges. When AAA games are weighing in at 100GB, curious how much that costs to distribute.

Microsoft Says Apple's 30% Fee Makes Xbox Cloud Gaming iOS App 'Impossible'

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