On Monopolies, Apple, and Epic

Google has built a complete monopoly on search. Amazon uses the sales data of its resellers to continuously expand and solidify market dominance. Facebook copies the competitors that they can’t bully into being bought to keep their dominant market position. Apple is partying in antitrust land forcing its competitors to hand out 30% of its revenue. And they are lying about the undeniable: That they run monopolies. The game is rigged. And no one is enforcing the rules. Except for Epic, the maker of one of the most successful games of all time, that has the goal to kill all others and be to the sole survivor.

There shouldn’t be a debate about whether these companies run monopolies. It doesn’t make sense to speculate about what they might be willing to do about their market segment dominance. All they are willing to do is defend, solidify, expand it. And we shouldn’t debate whether monopolies are good or bad. If you have ever played Monopoly you know that the game is over once a player has reached total dominance. You don’t need to play it to the last bankruptcy. It’s the same in real life. Total dominance is boring and depressing.

Facebook

A company with a Wikipedia page that has more information about scandals and controversies than positive or neutral facts. It makes $70 Billion with 2.5 Billion users systematically abusing their privacy, accelerating conspiracy theories, periodically leaking and losing sensitive user data, lying to and intimidating the press, constantly scheming, misleading us without end and buying every entity that threatens their monopoly on social networks. No matter how much you want to avoid Facebook there is no path around them. Your mother uses Facebook, nieces and nephews use Instagram, your children use WhatsApp. Facebook expanded and solidified its market dominance by buying competing companies.

Acquisitions: Instagram, Whatsapp, ParaKey, ConnectU, FriendFeed, Octazen, Divvyshot, Friendster, ShareGrove, Zenbe, Nextstop, Chai Labs, Hot Potato, Drop.io, Rel8tion, Beluga, Snaptu, RecRec, DayTum, Sofa, MailRank, Push Pop Press, Friend.ly, Strobe, Gowalla, Caffeinatedmind, Tagtile, Glancee, Lightbox.com, Karma, Face.com, Spool, Acrylic Software, Threadsy, Atlas Solutions, osmeta, Storylane (Mixtent), Hot Studio, Spaceport, Parse, Monoidics, Jibbigo, Onavo, SportStream, Little Eye Labs, Branch, Oculus VR, Ascenta, ProtoGeo Oy, PrivateCore, LiveRail, WaveGroup Sound, Wit.ai, Quickfire Networks, TheFind, Inc., Surreal Vision, Endaga, Pebbles, MSQRD (Masquerade), Two Big Ears, Nascent Objects, Infiniled, CrowdTangle, Faciometrics, Zurich Eye, Ozlo, Fayteq AG, tbh, Confirm, Bloomsbury AI, Redkix, Vidpresso, Dreambit, Chainspace, GrokStyle, Servicefriend, CTRL-labs, Packagd, Beat Games, PlayGiga, Sanzaru Games, Scape Technologies, Giphy, Mapillary, and Ready at Dawn.

Google

A Trillion Dollar company that has become so big that they had to water down their brand to “Alphabet” to not make Google Mail, Google Maps, Google This, and Google That come across as a practical joke on the Victory brand in 1984.

Acquisitions: YouTube, Android, Dejavue, Outride, Pyra Labs, Neotonic Software, Applied Semantics, Kaltix, Sprinks, Genius Labs, Ignite Logic, Picasa, ZipDash, Where2, Keyhole, Urchin Software Corporation, Dodgeball, Akwan Information Technologies, Reqwireless, Skia, Phatbits, allPAY, bruNET, dMarc Broadcasting, Measure Map, Upstartle, @Last Software, Orion, 2Web Technologies, Neven Vision Germany, JotSpot, Endoxon, Adscape, Trendalyzer, Crusix, Tonic Systems, Marratech, DoubleClick, GreenBorder, Panoramio, FeedBurner, PeakStream, Zenter, GrandCentral, ImageAmerica, Postini, Zingku, Jaiku, Omnisio, TNC, On2, reCAPTCHA, AdMob, Gizmo5, Teracent, AppJet, Aardvark, reMail, Picnik, DocVerse, Episodic, Plink, Agnilux, LabPixies, BumpTop, Global IP Solutions, Simplify Media, Ruba.com, Invite Media, Metaweb, Zetawire, Instantiations, Slide.com, Jambool, Like.com, Angstro, SocialDeck, Quiksee, Plannr, BlindType, Phonetic Arts, Widevine Technologies, eBook Technologies, SayNow, Zynamics, BeatThatQuote.com, Next New Networks, Green Parrot Pictures, PushLife, ITA Software, TalkBin, Sparkbuy, PostRank, Admeld, SageTV, Punchd, Fridge, PittPatt, Dealmap, Motorola Mobility, Zave Networks, Zagat, DailyDeal, SocialGrapple, Apture, Katango, RightsFlow, Clever Sense, Milk, TxVia, Meebo, Quickoffice, Sparrow, WIMM Labs, Wildfire Interactive, VirusTotal.com, Nik Software, Viewdle, Incentive Targeting, BufferBox, Channel Intelligence, DNNresearch, Talaria Technologies, Behavio, Wavii, Makani Power, Waze, Bump, Flutter, FlexyCore, Schaft, Industrial Perception, Redwood Robotics, Meka Robotics, Holomni, Bot & Dolly, Autofuss, Bitspin, Nest Labs, Impermium, DeepMind Technologies, SlickLogin, spider.io, GreenThrottle, Titan Aerospace, Rangespan, Adometry, Appetas, Stackdriver, MyEnergy, Quest Visual, Divide, Skybox Imaging, mDialog, Alpental Technologies, Dropcam, Appurify, Songza, drawElements, Emu, Director, Jetpac, Gecko Design, Zync Render, Lift Labs, Polar, Firebase, Dark Blue Labs & Vision Factory, Revolv, RelativeWave, Vidmaker, Launchpad Toys, Odysee, Softcard, Red Hot Labs, Thrive Audio, Skillman & Hackett, Timeful, Pulse.io, Pixate, Oyster, Jibe Mobile, Agawi, Digisfera, Fly Labs, bebop, BandPage, Pie, Synergyse, Webpass, Moodstocks, Anvato, Kifi, LaunchKit, Orbitera, Apigee, Urban Engines, API.AI, FameBit, Eyefluence, LeapDroid, Qwiklabs, Cronologics, Limes Audio, Fabric, Kaggle, AppBridge, Owlchemy Labs, Halli Labs, AIMatter, HTC (portions), Bitium, Relay Media, 60db, Redux, Tenor, Velostrata, Cask, GraphicsFuzz, Senosis, Onward, Workbench Education, Sigmoid Labs, DevOps Research and Assessment, Superpod, Alooma, Nightcorn, Looker, Elastifile, Socratic, CloudSimple, Typhoon Studios, AppSheet, Pointy, North, and Fitbit.

Amazon

Amazon dominates e-commerce and has complete oversight over which vendor makes how much money. Knowing this, it can buy its worthwhile competitors like candy, and dictate prices at will.

Acquisitions: Bookpages, Telebook, IMDb, Junglee, PlanetAll, LiveBid.com, Accept.com, Alexa Internet, e-Niche Incorporated, Convergence Corporation, Tool Crib of the North (Online and Catalog Sales Division), Back to Basics Toys, Leep Technology Inc., MindCorps Incorporated, Egghead Software, OurHouse.com, Joyo.com, BookSurge, Mobipocket, CustomFlix, smallparts.com, Shopbop, TextPayMe, Digital Photography Review, Brilliance Audio, Withoutabox, Audible, Fabric.com, AbeBooks, Shelfari, Reflexive Entertainment, Box Office Mojo, Lexcycle, SnapTell, Zappos, Touchco, Woot, Amie Street, BuyVIP, Quidsi, Toby Press, LoveFilm, The Book Depository, Pushbutton, Yap, Double Helix Games, Teachstreet, Kiva Systems, Evi, Avalon Books, UpNext, IVONA Software, Goodreads, Liquavista, TenMarks Education, Inc., ComiXology, Amiato, Twitch Interactive, Rooftop Media, GoodGame, Annapurna Labs, 2lemetry, Shoefitr, ClusterK, AppThwack, Elemental Technologies, Safaba Translation Systems, Biba Systems, Orbeus, Colis Privé, NICE, Emvantage Payments, Cloud9 IDE, Curse, Inc., Westland, Partpic, harvest.ai, Thinkbox Software, Do.com, Whole Foods Market, Souq.com, Graphiq, GameSparks, Wing.ae, Body Labs, Goo Technologies, Dispatch, Blink Home, Sqrrl, Ring, PillPack, Tapzo, CloudEndure, TSO Logic, Eero, Canvas Technology, Sizmek Ad Server and Sizmek Dynamic Creative Optimization, Bebo, E8 Storage, IGDB, INLT, Zoox. Stakes: GeoWorks, Drugstore.com, Homegrocer.com, Gear.com, Ashford.com, Della.com, Kozmo.com, Naxon Corporation, Pets.com, Greg Manning Auctions, Inc., Eziba.com, Basis Technology, Greenlight.com, Altura International, Daksh.com, Amie Street, Greenlight Financial Technology Inc, Embodied, More, SevenRooms, Rivian, and YES Network.

Microsoft

Microsoft is another blatant monopolist, owning the PC Operating System, the office software market and a Gazillion of other screen glowing things like a big chunk of the Server and gaming Market, Skype, Minecraft, and LinkedIn. Microsoft is attempting to buy TikTok, the only major social network that is not owned by Facebook (of which they also own a stake). The current US president is threatening to shut the service down if it doesn’t get sold to an American company. He is so blatant about it that he wants Microsoft to pay the US a share if the deal goes through. It would be funny if it weren’t true. Clearly, Microsoft doesn’t need to own more than it already owns. It already bought and put half of the world in the classic Microsoft Zombie state, where you think Windows, Office, LinkedIn, Hotmail, Xbox, Minecraft, MSN, etc should all be dead but somehow those things are still walking and making lots of money.

Acquisitions: Forethought, Inc. (maker of PowerPoint), Consumers Software, Fox Software, Softimage, Altamira Software, NextBase, One Tree Software, RenderMorphics, Network Managers, The Blue Ribbon SoundWorks, Netwise, Bruce Artwick Organization, Vermeer Technologies, VGA-Animation Software Div, Colusa Software, Exos, Aspect Software Engineering, eShop Inc., Electric Gravity, Panorama Software Sys-On-Line, NetCarta, Interse, WebTV Networks, Dimension X, Cooper & Peters, LinkAge Software, VXtreme, Hotmail, Flash Communications, Firefly, MESA Group, Valence Research, LinkExchange, FASA Interactive, CompareNet, Numinous Technologies, Interactive Objects-Digital, Jump Networks, ShadowFactor Software, Omnibrowse, Intrinsa, Sendit, Zoomit, STNC, Softway Systems, Entropic, Visio Corporation, Peach Networks, Travelscape, Titus Communications, Bungie, NetGames, MongoMusic, Pacific Microsonics, Digital Anvil, Vacationspot, Great Plains Software, Intellisol International, Ensemble Studios, NCompass Labs, Maximal Innovative Intelligence, Yupi, Classic Custom Vacations, Sales Management Systems, Navision, Mobilocity, XDegrees, Rare, Vicinity, Connectix, DCG, PlaceWare, G.A. Sullivan, GeCAD Software, 3DO Co-High Heat Baseball, Encore Bus Solutions-IP Asts, ActiveViews, Lookout Software, GIANT Company Software, en’tegrate, Groove Networks, MessageCast, Tsinghua-Shenxun-Cert Asts, Sybari Software, Teleo, FrontBridge Technologies, Alacris, media-streams.com, 5th Finger, UMT-Software and IP Assets, MotionBridge, Seadragon Software, Apptimum, Onfolio, Lionhead Studios, AssetMetrix, Massive Incorporated, Vexcel, DeepMetrix, ProClarity, iView Multimedia, Softricity, Winternals Software, Whale Communications, Gteko, DesktopStandard, Colloquis, Medstory, devBiz Business Solutions, ScreenTonic, Tellme Networks, SoftArtisans, Engyro, Stratature, Savvis Inc-Data Centers, AdECN, aQuantive, Jellyfish.com, Parlano, Global Care Solutions-Assets, HOB Business Solutions, Musiwave, Multimap.com, Calista Technologies, Caligari Corporation, YaData, Rapt, Komoku, 90 Degree Software, Farecast, Danger, Fast Search & Transfer, Kidaro, Quadreon, Navic Networks, Mobicomp, Powerset, DATAllegro, Greenfield Online, 3DV Systems, BigPark, Rosetta Biosoftware, Interactive Supercomputing, Opalis Software, Sentillion, Inc., AVIcode, Inc., Canesta, Inc., Skype Technologies, Prodiance, Twisted Pixel Games, Videosurf, Yammer, Perceptive Pixel, PhoneFactor, StorSimple, MarketingPilot, id8 Group R2 Studios, Pando Networks, MetricsHub, Netbreeze, InRelease, Nokia mobile phones unit, HLW Software, Apiphany, Parature, GreenButton, Capptain, SyntaxTree, InMage, Inception Mobile Inc., Mojang, Aorato, Acompli, HockeyApp, Equivio, Revolution Analytics, Sunrise Atelier, Inc., N-trig, LiveLoop, Datazen Software, Inc., 6 Wunderkinder GmbH, BlueStripe Software, FieldOne Systems LLC, Adallom, Incent Games, LLC, VoloMetrix, Inc., Double Labs, Inc., Adxstudio Inc., Havok, Mobile Data Labs, Inc., Secure Islands Technologies Ltd., Metanautix, Talko, Inc., Teacher Gaming LLC, SwiftKey, Groove, Xamarin, Solair, Wand Labs, Beam, Genee, LinkedIn, Maluuba, Simplygon, Deis, Intentional Software, Hexadite, Cloudyn, Cycle Computing, AltspaceVR, SWNG, Avere Systems, Playfab, Semantic Machines, Ninja Theory, Undead Labs, Compulsion Games, Playground Games, Flipgrid, Bonsai, Lobe, Glint, GitHub, inXile Entertainment, Obsidian Entertainment, XOXCO, FSLogix, Spectrum, Citus Data, DataSense, Express Logic, Double Fine Productions, BlueTalon, PromoteIQ, jClarity, Movere, Mover, Affirmed Networks, Metaswitch Networks, Softomotive, ADRM Software, CyberX Stakes: Company, Santa Cruz Operation, Dorling Kindersley, Stac Electronics, UUNet, Wang Laboratories, Individual, Mobile Telecom Technologies, Helicon Publishing, SingleTrac, WebTV Networks, VDOnet, CMGI, Digital Anvil, Interse, Comcast, Apple Inc., Progressive Networks, Lernout & Hauspie Speech, E-Stamp, General Magic, WavePhore, Pluto Technologies, Qwest Communications, SkyTel Communications, United Pan-Europe Comm NV, NTL, Banyan, Dialogic, Reciprocal, TV Cabo Portugal SA, Lernout & Hauspie Speech, Inprise, NaviSite, AT&T, Concentric Network, WebMD, Tuttle Decision Systems, Rogers Communications, Korea Thrunet, Globo Cabo, Commtouch Software, Gigamedia, Intertainer, VerticalNet, BroadBand Office, Ecoss, RealNames, MEASAT Broadcast Network, Best Buy, Telewest Communications, Blixer Net, CAIS Internet, Corel Corporation, Chyron Corporation, Audible.com, Sendo, USA Networks, Televisa, ByteTaxi, Facebook, OKWave, Zignals, Toyota Media Service Corp, 24/7, Barnes & Noble, Grab, and Databricks.

Sorry for making you scroll so much, but this is the stuff that monopolistic companies are made of. If you manage to have the nerve to read the list, you’ll be even more stunned.

Apple

Apple, a company with California Hippie roots that encourages to think different, has a developer community that is afraid to speak their mind in public. Apple is great and different in many ways, like in design, in UI consistency, in marketing, and in pioneering privacy as a blue-chip, but when it comes to having a monopoly it’s the same. It exercises total dominance over its iOS platform. And while they only reach 13% of the mobile phone market, these 13% make up for two-thirds of mobile app store sales. Their antitrust case looks like this: Apple takes 30% of its direct competitors’ revenue and keeps them from growing into serious threats.

Acquisitions: Network Innovations, Orion Network Systems, Styleware, Nashoba Systems, Coral Software, NeXT, Power Computing Corporation, Xemplar Education, Raycer Graphics, NetSelector, Astarte-DVD Authoring Software, SoundJam MP, Bluefish Labs, bluebuzz, Spruce Technologies, PowerSchool, Nothing Real, Zayante, Silicon Grail Corp-Chalice, Propel Software, Prismo Graphics, Emagic, SchemaSoft, FingerWorks, Silicon Color, Proximity, P.A. Semi, Placebase, Lala.com, Quattro Wireless, Intrinsity, Siri, Gipsy Moth Studios, Poly9, Polar Rose, IMSense, C3 Technologies, Anobit, Chomp, Redmatica, AuthenTec, Particle, Novauris Technologies, OttoCat, WiFiSlam, Locationary, HopStop.com, Passif Semiconductor, Matcha, Embark, AlgoTrim, Cue, PrimeSense, Topsy, BroadMap, Catch.com, Acunu, SnappyLabs, Burstly, LuxVue Technology, Spotsetter, Swell, BookLamp, Beats Electronics, Prss, Dryft, Camel Audio, Semetric, FoundationDB, LinX, Coherent Navigation, Metaio, Mapsense, VocalIQ, Perceptio, Faceshift, Emotient, LearnSprout, Flyby Media, LegbaCore, Turi, Gliimpse, Tuplejump, Indoor.io, Workflow, Beddit, Lattice Data, SensoMotoric Instruments, Vrvana, Regaind, init.ai, PowerbyProxi, InVisage Technologies, Pop Up Archive, Spektral, Laserlike, Silk Labs, Tueo Health, Silicon Valley Data Science, Buddybuild, Texture, Akonia Holographics, Shazam, Dialog Semiconductor (portions), Platoon, Stamplay, Drive.ai, Intel’s smartphone modem business, IKinema, Spectral Edge, Xnor.ai, Dark Sky, Voysis, NextVR, Fleetsmith, Mobeewave. Stakes: Kaleida Labs, Taligent Inc., Akamai Technologies, Imagination Technologies, and Didi Chuxing

Did you notice how short this list is in comparison to Microsoft even though Apple is only one year younger? Mergers and acquisitions to expand market dominance and reach monopoly is not Apple’s main strategy.

30% and 13%

So, what is the problem exactly with the 30%? And, how can Apple have a Monopoly with only 13% market share compared to Android?

What is wrong with 30% revenue share?

30% is typically what a successful company makes in profit. 30% is a ridiculously high margin for software retail. And Apple knows that:

I think we’re realizing that 30 percent is way too much,” said Phillip Shoemaker, a former senior App Store executive, who left Apple in 2016. Credit card companies charge roughly 3 percent to process payments. “It should be closer to that,” he said. –New York Times

All things taken into account, R&D, components, retail, management, and marketing, Apple probably makes more than 30% on its iPhone business. And they better do. Without profit, you cannot run a business. There will always be bad times where you need reserves. And, without at least 15% profit you cannot grow a business. It doesn’t take an MBA from Harvard to figure that out.

There are very few companies out there that have a 30 percent profit margin,” said Andy Yen, the chief executive of ProtonMail, an email service. –New York Times

Small indie companies hardly making a profit is not what the antitrust case is about. It’s not about companies like iA, offering niche markdown productivity apps. Apart from Microsoft Office, no one makes big money with productivity software.

The big case is where the big money flows. And the big money is in big games, big movies, and big music apps. Apple takes 30% from its direct competitors Spotify, Netflix, and Epic, while running Apple Music, Apple TV, and Apple Arcade. Apple eats their profit margin, and it gains data insight into its main competitors. Apple sees all your data. If this is not a clear cut antitrust case, what is?

“But, but, but…”

Or, wait, is it not? Here is what consumers, who don’t care much about who gets their money, sometimes say:

It’s their platform, so they can do what they want. They bring a lot of users to you! They handle sales. And, if you don’t like it, sell stuff on Android! Ha, gotcha! Google Play also takes 30%!

First, you don’t know how it is, if you don’t sell apps on the App Store. People selling apps on the App Store, deal with Apple business, design, technology, and politics every day. Second, Apple, Facebook, Google, or Microsoft doesn’t need you to defend them, they have complete control over their market segment. And, third, let’s look and kill those boring arguments, once for all, one by one…

“13% Marketshare is not a Monopoly!”

Here is the problem with the 13% market share argument: Apple makes double the revenue with a fragment of Google’s customer base! In other words, Apple managed to get everyone that is willing to spend money to use their phone. With only a 13% market share Apple’s App Store gets double the app sale revenue:

iOS App Store 2018 revenue came to $46.6 billion, while Google Play revenue stood at $24.8 billion by this measure –Business of Apps

Either the stats are messed up, or Apple’s customer base is so exceptional in being open to spending that an Apple user is indeed 12 times more likely to spend money on digital goods. Not twice, not 5 times, 12 times!

Running both an iOS and an Android app, we know that the stats are right. Android users do not want to spend money. If you offer your app for 5 Dollars per year you get called a megalomanic. This is why Google hands out more than 7 Billion Dollars per year just to be the default search on iPhone. Android users don’t spend money on apps. Not spending money is the Android brand. Android is not an alternative, it’s an alternate reality.

“Google Play also takes 30%!”

But Google Play takes 30%… Yes, it does take 30%, but if you don’t like that you are allowed to offer to install your app outside Google Play. And that changes everything because you are not forced to use the App Store. On iOS, there is no other way. The reason why apparently is security. Security is important. But both you and I know that in this context this is an excuse.

Taking 30% from your competitors

Apple claims that they don’t do special deals with the big ones. They “treat everyone equally.” First of all, this is not true. Amazon got a special deal, AirBnB got special treatment, Uber and Lyft don’t pay 30% even though their businesses depend on apps.

Apple is not treating Netflix, Nintendo, and Spotify like iA Writer to be fair with us small devs. Think about it. Apple doesn’t profit much from taking 30% of iA Writer’s sales. It would cost them a smile to cut us off. And, given that from the hundreds of thousands of app, only very few reach our position, it wouldn’t be a big deal to cut us all loose. The benefit of having small passionate devs is not in the money they make from them. The benefit of having us is that we enrich the platform. For years, people have been telling us that they buy Apple gear because of iA Writer and similar apps. The benefit of cutting 30% from the small ones is that they can say “we treat everyone the same” and cut off a major chunk of the big Netflix, Spotify, and Fortnite cakes.

How do consumers suffer?

Consumers suffer when developers can’t grow. Building an App business on the App Store is not impossible. The idea that all you need is a great idea and, learn to code and then live from it is a complete fairy tale. You need to run a tight ship and your profit margin will always be close to zero. Unless you switch to a subscription model. And, man do customers hate that model!

Two years ago, Apple cut that 30% in half for apps that offer subscriptions for more than one year. They are more likely to promote apps that offer subscriptions. They love subscriptions so much. And sure as hell, a lot of developers followed suit and changed from paid to subscriptions. In spite of everyone-and-their-dog hating to have to pay yet another subscription besides cellphone, electricity, and the rent for their apartment. And sure as hell every developer changing the business model to please Apple had to face a gigantic shit storm and continues to face a never-ending torrent of complaints from their users. And sure as hell they all now claim that they are doing great with subscriptions. Hell, they say that there is no other way to run an app sustainably than through subscriptions. What a load of crap! It is possible to make a living from selling software. It’s just harder when someone takes your profit month by month than when they take half of it.

What about Apple bringing in users? It’s hard to tell. Yes, they bring in users. Analytics tell us we get Millions of page views. But the Analytics we get, claims we hardly make any sales through our site with our hundreds of thousands of page views per month, sending over practically all of our traffic. They claim that when we get a big marketing push nothing changes. Apple’s Analytics claim that only App Store ad words and Apple’s featurings influence sales. You get it. Either Apple loves you, or you pay even more to get exposure. This is not great. And over the years it keeps getting worse. We have practically no control over how to push our sales. And it keeps getting worse. And there is nothing we can do.

There is one thing more depressing than the described monopolistic superpower of Apple, Google, Amazon, Facebook, and Microsoft. The super smarty pants who have no experience selling software on the App Store who to defend these giants with the ever same boring and depressing arguments. “It’s capitalism,” or “Supermarkets take a cut, too,” or “first world problems!”. You are entitled to your opinions, but if you have no experience lecturing people that have worked in the industry for over ten years and managed to be one of the few among Millions to be profitable in this tough environment, your opinions are about as important as your butterfly technique to Michael Phelps. “But Tim Cook said so, too!”

Apple argues that it has actually cut software developers a break. Tim Cook, Apple’s chief executive, suggested to Congress last month that when software was still sold in brick-and-mortar stores, 50 percent to 70 percent of the retail price went to middlemen. –New York Times

That’s a good one. Are you old enough to remember how much software cost back then? Handing out 1,500 Dollars for Microsoft Office?

Suites, in particular, were more expensive but offered significant value by bundling popular applications that would cost upwards of $1,500 if bought separately versus $600 for the entire suite. […] Now you can install Office on up to 5 computers for just $10 per month. Office 2000 Premium at one point cost $800, and this was just a single license. A Look at 25 years of Microsoft Office

Buying a copy of QuarkXpress (with dongle!) was a big moment, Adobe’s products were as expensive as second-hand cars. Ah, those were the times… But now back to 2020, where you can play Fortnite for free forever.

Enter Epic

Finally, someone with power dares to stand up to Apple. Not the government. The American government is a farce. The EU does what it can, but it’s big, complex, and slow.

This week, Epic, maker of the Battle Royale game Fortnite, submitted an update to the App Store that featured a clear provocation: “Pay via App Store or pay less to us directly.” They got banned both on the App Store and on Google Play. Then Epic has filed legal papers against Apple. Apple’s response:

Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines … We will make every effort to work with Epic to resolve these violations so they can return Fortnite to the App Store.” Fortnite Creator Sues Apple and Google After Ban From App Stores

Fortnite can afford to go heads on with Apple because it doesn’t depend on Apple. Its core user base of 350,000 players uses PCs and PlayStations. Epic is one of the few digital giants that doesn’t depend on Apple or Google. Fortnite hardly runs on Macs, unless you have a new pro model. It is not that much fun on mobile devices. The power Fortnite wields through its online community is nothing short of epic. If you have kids between 10 and 20, you may be scared of how addictive Fortnite is. You will have no doubt that among younger people it is a major power.

When I came home from after work last night, my 11-year-old son explained in detail to me what happened between Apple and Fortnite. He even knew what ad the Nineteen Eighty Fortnite ad was referencing an old Apple ad and could explain the backstory (“there was another old company that made all PCs and Apple wanted to make sure that other company didn’t own all computers…”), and he told me that Spotify was siding with Fortnite.

Financially, Netflix and Spotify have a stronger case to rebel against Apple. And the core audience of Netflix and Spotify is closer to the Apple brand.

Netflix grossed $853 million in 2018 on the iOS App Store. Based on that figure, Apple’s take would have been around $256 million, the firm said. –TechCrunch

At the same time, Netflix and Spotify are more dependent on Apple than Epic. Going down Epic’s route would have more of an impact, but they cannot afford to be banned from the most lucrative platform in the world for a couple of months. But imagine what would happen if Netflix and Spotify joined Epic? It could start a wave, a strike, and, you know what, We’d be game! 30% share is too much. 30% is what a run operation makes in profit. It’s higher than the highest tier in corporate tax. every developer we talk to and Business analysts around the world say 30% revenue share comes from a dark fairytale. What would be a fair share? 5% would be a fair share. Is there hope?

As mentioned, governments are slow and politics is a complicated game. But fast companies like Epic can move quickly and in a coordinated way. Epic’s move was prepared. Unlike Netflix or Spotify can economically afford to take on Apple because it is not that important for them. They came to the fight prepared with this video:

If you know Apple’s original video you know how much this hurts. And if you know Fortnite you know that they put this video on the most powerful PR platform around. No, not YouTube or Facebook, they stream it on Fortnite. It will be interesting the see what PR effect this will have. Likely, Fortnite will get even more exposure and earn sympathy points from the Anti-Apple base using PCs and Android devices. Android users are able to play Fortnite as they can install the game from Epic directly instead of going through the Google Play Store. Getting Android users to install it directly is, in Fortnite terminology, an epic win for them. Converting all the players that had a Google Play account to buy from them directly will free them of the 30% ball and chain.

Epic is one of the smartest gaming companies around. Their design, marketing tactics, business strategy, and reach are beyond anything a gaming company has reached in the last 20 years. Fortnite has fought a similar fight against Steam, which they abandoned because Steam demanded too high a percentage. They left and never came back. This happened at a time where Fortnite wasn’t even close to the size it has today.

Of course, Epic is not an immaculate saint. Fortnite is not the hero, it’s the heroin of games. It frightens parents, especially those who are addicted to Fortnite themselves, to death. Fortnite has an appetite for time that would devour years of childhoods if not stopped. Epic doesn’t want a reduction to 5%, it wants to pay nothing and run its own store on iOS. Which, let’s be real, has to be a negotiation tactic. On its own store, Epic charges 12% to developers. As some will point out, Sony demands a similar share and it’s not entirely clear if one can get around it. And, to make your head spin a bit more with corporate ping-pong: Let’s not leave out that Sony has a stake in Epic Games.

Sony has made a $250 million investment in Epic Games, the two companies announced on Thursday. The deal means Sony gets a 1.4 percent interest in the game development studio and publisher and gives Epic a valuation of $17.86 billion, reports VentureBeat.

You may also want to know that Epic has been fighting against bad PR that tried to frame Fortnite as “dying”. Google it and you find a waterfall of articles with that title. Going heads on against one of the most powerful companies in the world will strengthen their image as fighters. And what positions a fighter better than a big fight? Pointing out Epics hypocrisy doesn’t devalue the core argument that 30% revenue share is just too high.

To be perfectly clear: The argument is not “are you for Epic or Apple?”. Both are big corporations with shareholders, political influence, self-interests, PR agencies, hypocrisies, and economic fears, striving for more and more power. What we are saying: “In our industry, taking 30% from your revenue, prevents developers from running a sustainable business”.