Yesterday, Manzana took a key step to adapt to the European Union’s Digital Markets Law. Among the various initiatives, there is the possibility of allow third-party app stores to coexist alongside the App Store on iOS. However, those from Cupertino have managed, without breaking the regulations, to maintain as much control as possible and, most importantly, continue generating income.
Yes, Apple opened the door to third-party stores, but with certain conditions that are already beginning to generate controversy among the developer community. Those same conditions also apply to the App Store.
Firstly, it is crucial to make clear that, although third-party stores now have the opportunity to gain a place on iOS, They are required to follow a series of rules imposed by Apple.
One of the most relevant is to accept the Core Technology Fee (Base Technology Fee), a commission that must be paid by all applications offered through the App Store and third-party stores, and that exceed one million downloads per year.
If that condition is met, developers will have to pay 0.50 euros per year ($0.53) for each installation per account.
Apple has provided a calculator that esteem, taking into account multiple factors, the monthly payment based on the number of downloads. For example, if an app has two million downloads, they will have to pay approximately 41,667 euros per month. Or what is the same, half a million euros a year.
Ok, for a paid app there might not be too much of a problem, since they could cover that commission with the income earned from their own app.
However, those who offer free applications cannot say the same. Even if they offer in-app purchases, they are required to generate recurring income for each user who has installed the app. Otherwise, they will have a difficult time. Undoubtedly, The biggest affected will be small developers with free apps.
The giants have a better chance of succeeding because they have robust economic backing. For example, Epic Games, which already announced the return of Fortnite to iOS in Europe thanks to third-party stores, you will have to deal with the fee for each person who installs the game through the Epic Games Launcher. However, those led by Tim Sweeney do not have to worry about a financial issue. Fortnite It generates millions of dollars for its model with microtransactions.
Does Apple pass the blame to the European Union?
Obviously, some developers have already started to express their discontent with the Core Technology Fee. The majority agrees that it’s a unsustainable business for completely free applications that exceed the million downloads threshold.
“Free apps will be massively and disproportionately affected by Apple’s Base Technology Fee, which is why I don’t think it will stay as is,” he commented via Mastodon Steve Troughton-Smith, creator of Broadcasts, Pastel and Grace.
For her part, Nikita Bier commented on X (formerly Twitter): “Under the new App Store structure and its new fee in Europe, if you make $10 million in sales, Apple’s cut is $6.2 million annually. Assuming you have no operating costs “No salaries, your take home net amount is $2 million after taxes, or 20% of your sales. I will never launch an app in Europe.”
A curious point is that Apple, in the calculator on its website, continues to show how much developers would pay with the previous conditions. That is, when they still did not have to align with the Digital Markets Law. The pay? 0 euros, regardless of the number of downloads. Of course, the fee did not exist.
The above shows that Apple is aware that the new commission is not going to please developers at all. But, at the same time, The fault lies entirely with the European Union regulations.
Will Apple change its commission price after seeing these complaints? It is unlikely. Even less so because, according to Cupertino’s own estimation, less than 1% of developers will have to pay the new base technology fee. Certainly, there are not many apps that exceed one million downloads…