Yeah, it's actually kind of low. Kindle Direct Publishing takes 30% of digital book sales and those are like a couple megabytes. Steam is distributing 100GB+ titles on top of adding Steamworks SDK and a ton of other features.
30% was a great deal when KDP launched..several decades ago..Prior to KDP, self-published authors would have costs of about 90% to print and distribute their own books. Traditional publishers generally take 85% but in exchange handle the editing, marketing, and physical logistics of book printing and distribution.
Similarly, when Steam launched, its biggest competitor was retail. Studios got paid a % of the wholesale price (after the publisher recovered its costs), which worked out to an average of approximately 10-15% of the retail price for successful games and 0% for unsuccessful games. (Note: this does not include the milestone payments to the studio during the development of the game.)
But markets have changed. 30% may or may not be a great deal anymore. (For KDP, many authors say that the 30% is worth it because the volume of their Amazon sales dwarfs all other-channel sales combined. Some relatively famous sci-fi authors have said that about 90% of the sales of their self-published works were through Amazon.)
If I were looking for alternatives to Steam it would probably be Good Old Games, Humble, or self publishing. Epic Game Store is just kind of trashy. They keep engaging in anti-consumer practices.
Devil's advocate: what is the typical markup at retail stores?
I am inclined to agree with you, it feels like rent seeking at some level (middlemen profiting from the work of the creator), but at the same time, there are many moving parts to get product into the hands of customers so I'm not sure what's fair / standard.
(This is separate from the topic of the article, in which Apple prohibits others from looking elsewhere for these services, which sure seems like textbook anticompetitive behavior)
Devil's advocate: what is the typical markup at retail stores?
Who cares? We're not selling boxed software. Let me give you a better question: how much would it cost to host a web site and give a payment processor their cut? I can answer that, because I've done it for Pocket PC/WinMobile apps: 7% to FastSpring, or whoever, for payment processing and then web site hosting for, what, a few hundred a year?
30% is friggin' ridiculous. Discovery is non-existent on Apple's App Store, so we are paying for...what? Overpriced payment processing, and some minimal online storage? I don't give a shit that Apple provided a "platform", as Microsoft isn't charging for me to have the privilege of dropping a binary on a Windows box. And for Apple to then turn around and demand a cut every time money changes hands, whether Apple had anything to do with it or not, is just icing on that anti-competitive cake.
The point is it's a frame of reference. The claim is that 30% is ridiculous. Why? Based on other comments in the discussion, it sounds in the same ballpark to other online stores, ones without Apple's anticompetitive pressure.
If that's the case, it sounds like a very lucrative market, so competition should bring that number down if it's so profitable.
Again, this is a separate question from Apple's anticompetitive behavior, it's solely about whether a 30% cut is itself reasonable or outrageous.
I thought of a frame of reference: ebay. All told, it looks like I pay 15% to ebay when selling something. So Apple charges 2x as much (I would say the value provided is comparable)
Apples and oranges. Boxed retail have to pay for buildings, shipping, stock management, etc which just do not exist in the same quantities for digital downloads.
Why is a brick and mortar retail store a useful frame of reference? You may as well compare it with the margin taken by my plumber or the loss factor in electricity supply lines. It's utterly irrelevant as a frame of reference. You really can't see that?
Why be so snarky and dismissive? Plumbers or electrical lines aren't middlemen between producers and consumers. Retail stores and app stores both deal with:
- taking a large number of small payments from geographically distributed customers (with different tax situations), taking a cut, and producing a simpler bulk income stream to the producer
- having some filter on quality of the products that are offered to the consumer, and providing a low-friction way for customers to exchange money for them
- dealing with refunds, differing methods of payments, discounts, etc. (handling some of the customer nonsense that comes from dealing with the public, in short)
Are there things that physical stores do that an app store doesn't? Of course. But if retail takes a 50% cut and the app store takes 30%, well, that's instructive, isn't it? That sounds reasonable given that they play similar roles but with less "physical stuff" to do. But if retail takes 10% and here we have the app store taking 30%, that's even more instructive and that would support the claim that the app store is "ludicrous". I'm not looking to compare 29% and 30%, I'm evaluating the claim that 30% is an outrageous sum. Outrageous compared to what?
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For the record, it annoys the ever-living hell out of me that ebay keeps taking more and more, but from what I've seen, its competitors are in the same ballpark. Is Apple worth twice that for the app store, probably not. But now we have a frame of reference: it's about 2x ebay, not, say, 10x
