Apple and Google are providing a service, so why exactly should they not get a cut of revenue?
To be clear, 30% is too much, but aside from payment handling and taking on fraud risk as a result of that (3-4% is generally the industry standard for card not present transactions), they provide a subscription management/payment API for IAPs, as well as app packaging and distribution, reviews, etc.
Apple and Google (and others) also allow loading credit using physical cards that you purchase at retail stores. I believe the stores get around a 5-10% margin on these, i.e. you buy a $100 gift card, and the store only pays Apple/Google $90-95.
There is a definite cost to all these so 0% is unreasonable. Epic is trying to be the "good" games distribution store and they reportedly take a 12% cut. Something around there, maybe down to 10% would be a reasonable place for Apple/Google to be.
Unfortunately Epic can't honestly comment on what cut they're taking while their storefront loses immense amounts of money[1] - I agree that a lower percentage is probably a lot more reasonable but I don't think EGS can serve as that example.
Of course they can, but we can acknowledge it's a moving target. I'm at least confident it will be better than Steam.
> loses immense amounts of money
This is the same for any growth business/product where you front-load marketing and business development costs, and is not an indicator of future trends.
I'm pretty sure it loses money because of all the giveaways and coupons they pay for, so you'd have to take those out of the picture before doing the math for a proper comparison.
I know that Silicon Valley is a hell of a drug but starting a business by burning two hundred million dollars a year that you haven't yet earned is not how nearly anything works. It only works for tech startups and it's bizarre since tech doesn't actually cost that much money.
Isn't the fraud risk still generally born by credit card companies at the end of the day?
I think we can legitimately talk about the costs of maintaining the app-store as a marketplace, and we can talk about the future costs of providing updates free of charge in perpetuity and orchestrating the infrastructure to host those various downloads... but that's about where their service offering ends. App review is a joke, the rating systems on both platforms as absolute trash and often gamed by publishers (remember Uber's in app prompt about how many stars you'd give them that forwarded you to the app-store if you gave them 5 and otherwise just offered you an internal complaint form if you gave them anything else? Everyone does that).
I'd question whether Apple and Google are really providing a service or just exploiting a captive market.
> Isn't the fraud risk still generally born by credit card companies at the end of the day?
Absolutely not, the bank initiates a chargeback, which the payment processing network directs back to the one who handled the payments. They generally are then tasked with "proving" the purchase is authorized. Enough chargebacks, even fraudulent ones, and the payment provider cuts ties with you (although, at Google scale, I don't see this happening) as you're too great a risk.
> App review is a joke, the rating systems on both platforms as absolute trash and often gamed by publishers (remember Uber's in app prompt about how many stars you'd give them that forwarded you to the app-store if you gave them 5 and otherwise just offered you an internal complaint form if you gave them anything else? Everyone does that).
The implementation being a joke doesn't mean it's not a service with COGS that need to be accounted for.
Nope. All fraud and chargebacks go back to the merchant/seller. The processor will immediately hold those funds in question pending a dispute or resolution around the fraud or chargeback.
On top of that there's a hefty fee for any fraud or chargeback that's not refundable even if it's resolved in your favor. Usually in the range of $40 per instance.
No, industry standard for online credit card transactions is 1-1.5% in the EU and 2.5-3% in the US. Even back in 2008 before 3d secure was common and before the EU regilations we as a tiny online casino had 2.5% fees.
To be clear, 30% is too much, but aside from payment handling and taking on fraud risk as a result of that (3-4% is generally the industry standard for card not present transactions), they provide a subscription management/payment API for IAPs, as well as app packaging and distribution, reviews, etc.
That certainly is worth more than 0%.