App distribution in the European Union (EU) is about to undergo a significant transformation. In response to the Digital Markets Act (DMA), Apple is implementing substantial changes to how apps are distributed, paid for, and accessed on iOS devices within the EU. Let’s look into these changes and their potential impact on developers, publishers, and users.
Alternative App Stores and Payment Methods
One of the most significant changes is that the developers will now be free to distribute their apps outside the App Store, through alternative app stores, or directly to users. This opens up new possibilities for reaching a wider audience and avoiding Apple’s 30% commission on in-app purchases.
Furthermore, developers will no longer be restricted to Apple’s In-App Purchase system. They can now integrate their own payment solutions, potentially offering users more payment options and lowering transaction fees. This move could lead to increased competition and innovation in mobile payments.
Breaking the monopoly of Safari
The DMA also tackles Apple’s control over web browsing experiences on iOS devices. Developers of dedicated browser apps and apps with in-app browsing can now use alternative browsers. This means users will have more choice and flexibility when browsing the web on their iPhones and iPads.
Apple is also making adjustments in other areas, such as allowing developers to link to their websites from within their apps for users to complete transactions. This bypasses Apple’s App Store entirely, further loosening its control over the user experience.
Balancing free choice and security
While these changes promote greater competition and user choice, concerns remain about their potential impact on security and privacy. Apple has emphasized its commitment to user safety and is implementing various safeguards to mitigate these risks. For instance, apps distributed outside the App Store will still undergo a security review process, and alternative payment methods must comply with strict security standards.
How will Apple’s new App Store policy affect the mobile game industry?
The DMA’s impact on the app ecosystem in the EU is still unfolding. As they navigate this evolving landscape, developers and publishers face new opportunities and challenges. Users stand to benefit from increased choice, competition, and potentially lower prices. However, the long-term consequences for app quality, security, and user privacy remain to be seen.
This update on apps distributed in the EU is a turning point in Apple’s control over its iOS platform. The coming months and years will reveal how these changes play out and reshape the mobile app landscape in the European Union.
It’s important to note that these changes are only applicable to apps distributed in the EU. For the rest of the world, Apple’s App Store will continue to operate under its existing terms and conditions.
Advantages and disadvantages of Apple’s new App Store policy
On the one hand, the DMA will require Apple to open up its iOS platform to alternative app stores and payment methods, which could give game developers and publishers more choices and potentially lead to lower costs. For example, developers can use their payment systems instead of Apple’s In-App Purchase system, which takes a 30% commission on all sales. Additionally, the DMA will make it easier for game developers and publishers to distribute their games outside of the App Store, which could reach a wider audience of potential customers.
On the other hand, the DMA will also create several new risks and challenges for game developers and publishers. For example, the document says that the DMA will make it more difficult for Apple to prevent or remove harmful apps from its platform, which could lead to an increase in malware, scams, and other forms of abuse. Additionally, the DMA will make it more complex for users to find and install games, as they must choose from various app stores and payment methods. This could lead to decreased sales for some game developers and publishers.
Overall, the DMA will likely have a mixed impact on game developers and publishers. Some developers and publishers may benefit from the new choices and opportunities that the DMA creates, while the new risks and challenges may harm others. The ultimate impact of the DMA will likely depend on a number of factors, such as the specific provisions of the law, how Apple implements the law, and how game developers and publishers respond to the changes. And “How Apple implements the law” will be relevant later in this article.
Here are some specific examples of how the DMA could impact game developers and publishers:
Possible positive impacts of Apple’s new App Store policy
- Game developers and publishers may be able to use their own payment systems instead of Apple’s In-App Purchase system, which could save them money.
- Game developers and publishers may be able to distribute their games outside the App Store, which could reach a wider audience of potential customers.
- The DMA could lead to more competition among app stores, driving down prices and improving the quality of services offered to game developers and publishers.
Possible negative impacts of Apple’s new App Store policy
- The DMA could make it more difficult for Apple to prevent or remove harmful apps from its platform, which could lead to an increase in malware, scams, and other forms of abuse.
- The DMA could make it more complex for users to find and install games, as they must choose from a wider variety of app stores and payment methods. This could lead to decreased sales for some game developers and publishers.
- The DMA could create new compliance costs for game developers and publishers, as they must ensure that their games comply with the new rules.
So why did Apple’s new App Store policy create a backlash from the industry?
The European Union is sensitive when it comes to monopoly and data privacy; therefore, the DMA can be interpreted in this regard, and what Apple did is merely an attempt to comply with the new rules. Authorities legislated a new law or modified an existing one, and a company that wants to keep conducting business in its jurisdiction is adapting. What’s the problem with that? Apparently, the mobile game and app industry doesn’t perceive Apple’s App Store policy changes this way.
The criticism towards Apple’s move revolves around some specific rules. One is the new “Core Technology Fee” of €0.50 per app install over 1 million per year, which is considered unfair, especially for smaller developers who struggle to reach that threshold. Some industry professionals think Apple’s new fee formula is just a more confusing and elaborate way to maintain its 30% fee. Some even compare Apple’s move to Unity’s policy changes, which also created massive resentment in the industry.
Apple’s new policies look like they allow developers to work with third-party app stores and bypass Apple’s payment system. Still, professionals think that the execution will be on the contrary. They believe that Apple only focuses on maintaining its monopoly at all costs, even at the expense of user experience and interests. The new policies created a backlash so strong that some developers and publishers et out to launch their own app stores.
“Apple’s nod to the Digital Markets Act might seem like a win for developers, but beneath the surface, it’s clear who the real victor is. The introduction of terms for using alternative app stores places an insurmountable barrier, with Apple keen on charging a transaction fee of 10/17% but pocketing an extra 3% fee for using the App Store’s payment processing, coupled with an additional Core Technology Fee (CTF) of €0.50 per download for apps exceeding 1,000,000 downloads annually. What’s more, this recurring CTF, levied for every subsequent update, could see developers shelling out €0.50 per user for years, regardless of their app’s active use. It’s a puzzling equation that significantly impacts Lifetime Value (LTV), leaving many questioning the true beneficiaries of these new terms—it’s certainly not game developers.”
Nadir Garouche
Senior User Acquisition Manager, Sandsoft
The criticism also revolves around the new terms being complex and unclear, leaving developers unsure of how to comply and raising concerns about potential penalties or app removals. This lack of transparency further fuels frustrations.
Does the backlash against Apple have a basis?
European Union authorities are not very fond of monopoly attempts and deliberate resistance to standardization, but laws don’t always work as they should in real life. We are talking about a company that sues independent repair shops for fixing their products and lobbies against “the right to repair,” not to mention other more devious, elaborate, or technical ways to enforce its monopoly.
The best possible outcome is that EU authorities keep an eye on the progress and force Apple to change or enforce its policies to comply with the laws’ purposes. But looking at the industry professionals’ take on the situation, it’s more likely that Apple will intimidate and frustrate the developers to maintain the profits earned at their expense and maintain its position. However the situation unfolds, it’s clear the mobile game and app developers will lean on their adaptability and innovation skills to survive, as they have been doing for years.
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