Thirty Percent
A decade ago, I was invited to the UK launch of Windows Phone 7. It was Microsoft's attempt to compete with Apple's iPhone and Google's Android. Sure, Microsoft could make a brilliant OS and had excellent hardware partners - but could they convince developers to use yet another system?
At the time, I wrote:
The revenue share is 70/30. I really think MS have missed a trick here. It’s an “industry standard” price point because no one wants to get in to a price war. Increasing the share that goes to the developer would be an excellent way to convince wavering developers to adopt the platform.
Back in 2010, BlackBerry charged developers 30% as did Nokia Ovi, and HP's WebOS, app stores from Opera and Samsung charged the same amount, even the Amazon app store charged 30%. None have shifted their pricing in the last decade.
That's curious, isn't it? Surely a new entrant into the market - or one struggling to retain market share - would have picked a different revenue split?
What a coincidence that they all, independently, came to the conclusion that 30% was a fair and reasonable amount to charge developers.
In a healthy, competitive market, I would expect these companies to attempt to undercut each other. Sure, some of them offer incentives to large developers - and others offer promotions to smaller developers. But where's the price war to attract developers?
I doubt anyone has said "My favourite app is £1 cheaper on Android, time to ditch my iPhone and buy a Samsung!" But we know from the game console market that exclusive games drive purchases. Recently, Apple forced the removal of the popular "Dark Sky" app from Android - presumably because they wanted users to switch. Attracting developers and convincing them to concentrate on your platform doesn't rely on increased revenue share - but it sure can't hurt.
Obviously, I don't allege that they have acted as a cartel. I mean, just because Apple and Google colluded to suppress workers' wages, doesn't mean they've done so to suppress developers' income. A wide-ranging conspiracy to overcharge developers and pass those costs on to end-users seems unlikely. But I wonder why, in the last ten years, no one has challenged this seemingly arbitrary percentage.
And I wonder which app store will be the first to break ranks?
Ten Years Later - Was Elop Right?
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Even within the same ecosystem the three main Android stores - Google, Amazon, Samsung - all seem to charge 30% to developers.
Alex says:
Of course the base fee of 30% does provide the stores with opportunities to offer incentives for exclusive content , which I think Samsung have done with some games content.
• Steam takes a 30% share;
• Epic takes 12%.
Alex says:
Conor Rohan says:
No issues with hardware, and the UI was crisp to a fault, but why on earth would an 18 year old in 2012 stick with a phone that had no Snapchat and no Tinder? I think it was the first time I realised how much value I placed in third party applications, and I’ve been begrudgingly oscillating between Android and iPhone ever since.
I still don’t understand why Microsoft didn’t aggressively incentivise developers to use their platform. Feels like they missed a trick as they had some great handsets and the backing of a tech giant.
Nigel Megitt says:
Need to work through the figures of numbers of users, chance of any user buying the app, etc, then ask what difference a marginal percentage change to their cut, say 2% more, would make compared with reaching a whole new app store user base. Or indeed, losing one.
Alex says: