Apple cuts App Store rates in half for some but no, Fortnite isn’t coming back

Apple has reduced its App Store rates to 15 per cent for developers making less than a million dollars a year. Michael Simon reports

After months of litigation, hard feelings and angry tweets, Apple has announced a major change to its App Store developer programme. Instead of the standard 30 per cent fee that it has collected since the App Store launched in 2008, Apple will now collect just 15 per cent for most of the apps and games sold in the store. The terms of the new programme, which begins on 1 January 2021, are as follows:

• Existing developers who made up to $1 million in 2020 for all of their apps, as well as developers new to the App Store, can qualify for the programme and the reduced commission.

• If a participating developer surpasses the $1 million threshold, the standard commission rate will apply for the remainder of the year.

• If a developer’s business falls below the $1 million threshold in a future calendar year, they can requalify for the 15 per cent commission the year after.

• The existing subscription terms, which lowered the fee from 30 per cent to 15 per cent after the second year of a recurring subscription, remains in place.

It’s not clear how many of the developers who sell apps in the App Store make more than a million dollars, but it’s likely to be a small percentage of the nearly two million apps that are sold in the store.

Apple CEO Tim Cook said the new terms will enable developers to “fund their small businesses, take risks on new ideas, expand their teams and continue to make apps that enrich people’s lives”. On annual sales of $999,999, for instance, a developer will save nearly $150,000 under the new programme.

While the move is certainly welcome news for iOS developers, it won’t change anything about the fight between Epic and Apple. Epic makes much more than a million dollars a year on the App Store from Fortnite alone, and even if they didn’t, Epic is unlikely to relent in its fight against Apple’s insistence that developers use its in-app payments to sell anything inside the app. The case is currently scheduled to resume next summer.

In a statement, Epic CEO Tim Sweeney said, “This would be something to celebrate were it not a calculated move by Apple to divide app creators and preserve their monopoly on stores and payments, again breaking the promise of treating all developers equally.”

Additionally, Apple is fighting the US Justice Department in an antitrust case over monopolistic and anticompetitive practices pertaining to App Store fees. The move could take some of the teeth out of that argument, but the case is likely to proceed.