App stores that take a 30 percent chunk of developers’ earnings are parasites, according to Tim Sweeney, CEO of Epic Games.
“The system is pretty unfair at the moment,” Sweeney said during a keynote speech on the future of graphics and games development in the U.K. “These app stores take 30 percent of your revenue for distribution … That’s strange because MasterCard, Visa and other companies that handle transactions take 2 percent or 3 percent of the revenue…. So they’re pocketing a huge amount of profit from your order – and they aren’t really doing much to help us anymore.”
The criticism from Sweeney — whose company created the Unreal Engine that powers many games, including Epic Games’ smash hit Infinity Blade — isn’t just about companies taking money from developers. It’s also about what he sees as an increasingly lopsided deal for game-makers.
“There was a time when there were just a few releases every week and you had a pretty good chance of being near the top of the charts, but nowadays the top of the charts are completely dominated by a few games with $100 million marketing budgets,” he said. “There’s not really room for ordinary developers to compete. So what they have to do is spend money on user acquisition [via] Facebook, Twitter, Google Search…. Companies are paying something like $3 per install to get users to install a free game, and that really sucks.”
He described the results as a “market failure” that “we should be angry about.” And he referred to the 30 percent cut taken by companies like Apple as a “parasitic loss.”
Apple’s take on things
Apple, for its part, promotes how much money it has paid developers since opening the iOS App Store back in 2008. In a website launched earlier this year, Apple noted that U.S. developers have earned over $16 billion in App Store sales worldwide. Apple claims that 1,530,000 U.S. job are in some way attributable to the App Store ecosystem.
The App Store also provided developers with a new way to distribute apps that was not available before.
Nonetheless, for developers that do not rake in money with in-app purchases in cash-grab games, it’s easy to empathize. Especially when indie coders see Apple taking almost a third of their revenue in exchange for running the App Store. Still, until Apple is put in a position where it has to change — or lose money — things will likely stay the same.
Who do you side with on this? Leave your comments below.
Source: Games Industry.biz
