Re:Apple removes Fortnite from App Store after Epic attempts...
by valuearb on Thursday August 13, 2020 @09:36PM
(#24152189)
Read their financials, the gross margins for services are listed in every one of their reports.
And the $99 and ad revenues are service revenues. So their audited financials say, taking all of those revenues, that services expenses are roughly 32% of their revenues. Obviously this doesn’t include administration costs, interest costs or taxes.
32% of 30% is 9.6%, so it’s possible that’s their break even level, or even a little lower if App Store margins are higher than other services. But it’s unlikely because it’s likely the billions in the Google Safari placement check is close to 100% margin, meaning the rest of services has to have margins well under 68%.
Apple Services:
- AppStore $ 15 billion
- Licencing $ 10 billion
- Apple Care & Others $ 7.5 billion
- Apple Music $ 5.4 billion
- iCloud $ 4.5 billion
- Third-Party Subscriptions $ 3.6 billion
Total: $46 billion
Remember, you're stating that Apple isn't able break even at a 10% fee for the App Store. Recall that Apple charges developers a yearly subscription (99 USD for non-enterprise accounts per year) to be able to submit something to the App Store. And additionally remember that your "co-marketing" cost should include the money Apple makes from advertisers on its App Store [1].
The items you mentioned as costs are standard for many similar internet service (hosting, security, customer APIs, etc. etc,.) that do not make nearly the amount of revenue Apple does with its App Store.
Let's do a worst case and cut Apple's estimated App Store revenue from $15 billion to $5 billion a year to show how ridiculous the claim that they can't break even is.
1 - https://searchads.apple.com/