Apple's cheating

While I also dislike the fact that Apple has exclusive control over the iOS App Store, anyone complaining about 30% going to Apple is either incredibly naive or has never had to deal with open market reseller and distribution procedures.

As an example using a AAA game Like “The Sims” being sold at GameStop, Best Buy, or Frys Electronics:

EA sets the retail price at at $59
They sell to a Distributor for $25
The distributor sells it to multiple resellers for $38
The resellers put it on the shelf for $59

Of EA’s $25, approximately $6 per copy goes to marketing
Of the disti’s $13, $4 goes to their push to resellers
Of the Reseller’s $21, $6 - $8 again goes to marketing and store presence

  • and with Best Buy and Frys, EA may also face “shelf placement fees” ranging from $10K to $50K per store to get high shelf or end cap placement.

The 30% that Apple gets for dealing with parts 1 and 2 of that equation is a great deal overall. If EA sold that way, they would only give up $18 of the original $59, so $41 of each sale is theirs.

So, while their anti-competitive practices are questionable and may be potentially determined to be illegal, their margin model is golden.