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Tuesday, December 8, 2020

Developers Can Now Apply to Apple's App Store Small Business Program

By LUDWIG VON KOOPA - Some quick clarifications. ...They don't resolve the problems.

Last month, I wrote an article about Apple launching the App Store Small Business Program, which cuts Apple's fee in half to 15% on App Store transactions, as opposed to 30%, provided you make a small enough amount of money off the App Store. My argument was that this is actually a fairly bad situation, because as explained by Apple at the time, it introduced a large economic disincentive for App Store developers to get bigger.

I wrote at the time that we had limited information on the App Store Small Business Program, and that Apple would release full details in December. ...Since we're now in December and Apple has opened up applications and a few details, let's see if I was right and if I need to clarify things.

First of all, the post-commission earnings is not just the revenue after Apple takes their cut, but it's also net of “certain taxes and adjustments”, although the details of what those are require access to “the Payments and Financial Reports section of App Store Connect.” That's not something I have access to, but it looks like this. Still, it makes my whole awful picture/“let's put some real numbers to this” part of last month's article wrong, since that assumed zero taxes/adjustments. ...Though that is a nice reality to imagine. (Though, for all I know, the adjustments are a good thing. ...Doubt it.)

Otherwise, “the basics” are the same now as they were in November, with the exception of the line that “Developers must identify any Associated Developer Accounts to determine proceeds eligibility.” What's an Associated Developer Account? Another Apple Developer that has over 50% control over your account, or you have over 50% control over them. 50% control may also be read as “ultimate decision-making authority.” The idea here is that only small developers benefit, sort of similar to the restrictions on the United States's Paycheck Protection Program. Similarly, if you do any app transfers (transferring apps between developer accounts), you will be excluded from the program.

None of the additional details that Apple has put out change the fundamental conclusion that this program still introduces economic disincentives to grow bigger, and there is still a wide range of revenue where you will be making less profit because you graduated to the 30% Apple fee bracket, than if you made less revenue and got to be taxed by Apple at only 15%. When Apple says things like how this will “help propel your small business forward” and that “you can invest more resources into your business”, that's untrue.

If you're an App Store developer and you're looking into entering this program, I would recommend planning your finances as if you're being charged 30% the whole time. This is basically another gimmick from Apple.



Ludwig's November article on the App Store Small Business Program was actually KoopaTV's least-viewed article published in November 2020, which means no one was interested in it. Why did Ludwig think it would be a good idea to write a follow-up article on this topic? He really doesn't like Apple, and owns nothing within their ecosystem.

10 comments :

  1. thanks for the advice on app store development financial management what a conundrum ! oh my goodness! thanks this is really relevant to your audience.

    ReplyDelete
    Replies
    1. I'm begrudgingly giving you a truth point for that. >_>

      So this article serves as legitimate advice to any app developer who happens to come across KoopaTV (which might be... more than zero people between now and the future), as well as an implicit "Apple sucks" article, which I'm happy to publish. >.>

      Delete
  2. Not an apple I want to take a bite of once I start making games. About the only real benefit over other platforms would be exposure to their demographic--and I don't like Apple's demographic.

    ReplyDelete
    Replies
    1. ...Ha.

      Well, Apple's demographic are rich people who like wasting their money. Seems like a good demographic to profit from. Epic Games sure thought so.

      Delete
    2. Hmm...maybe after I've made a few games and already gotten a good reputation. Profit from, sure. CATER to, no way.

      Delete
    3. Is the implication that being on the App Store is a passive reputation debuff?

      Delete
    4. Not if one is on it passively. If one is emphatic about it though...I don't want to be known for pandering to that crowd. So like, I suppose another instance when I'd do so is if I made a game and was confident enough about it to get it on several stores simultaneously. Like, if I'm releasing it on Apple, AND on Steam and say, Microsoft's store as well then it's not a big deal. But I would never release something *only* on Apple.

      Delete
    5. Well, lots of developers try to get on multiple platforms. I don't know if that's statistically the norm or not, but it is the ideal scenario.

      Delete

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