Don't forget we're now in the Brave New World where you can't even trust screenshots on the internet, or videos, or even phone calls, because there is a substantial probability they are generated, not recorded or an actual person on the other end of the comms link.

I was thinking the opposite: Since there are some folks on both Disney and Apple boards, I'd expect this $1.5B to come with a string like "stop badmouthing Apple".

The thing that is "off" is that Microsoft didn't create any of that value - they merely bought the creators.

Microsoft didn't invent anything or create a new game or games here to grow their revenue - they literally used their massive piles of cash to buy the creator and claim their products as their own.

Their revenue is literally just changing the ownership line on a ledger. It will be a while to see any effect of what Microsoft will add "on their own" via this acquisition.

The computer is yours, it's the software They're trying to say isn't.

Of course, They don't care if the computer hardware isn't useful without Their software.

I mean that's an irrelevant distinction: why do Xbox developers have to pay a royalty fee per item but Windows developers don't? That's from the same company...

There is a reasonable argument about fixed amount versus percentage-based though. I thought part of the new terms for the EU was just that though - the "core technology" fee? Or was that on top of the percentage-based fee?

Microsoft makes no money from the hardware that runs Windows

Since when? They most definitely get OEM payments to have Windows on those machines.

Now if it's a homebuilt - sure.

Also I should have specified what "dev fee" means - it doesn't have to be labeled a dev fee. Paying for an Enterprise license of Windows counts as a dev fee.

I'm pretty sure Microsoft also now heavily subsidizes Windows and Dev Studio development with revenue from Azure and Office 365 and other projects. So they most definitely are charging for those products, it's just in an even more roundabout way than Apple does.

And how have computer manufacturers and OS makers sustained themselves for decades without requiring rent-seeking app stores on those devices?

By charging dev kit fees or higher prices for the hardware itself? I thought I mentioned that.

The manufacturer of the device, of course.

With what revenue? See above: either money from the sale of hardware or other licensing fees.

... how desirable would iOS devices be if they had no third-party apps? The benefit is definitely mutual and even if countries decide that Apple can't coerce app makers to use the App Store, Apple still benefits from the existence of those apps rather than not having them available at all.

I fully agree here: Apple can't sustain their sales without having an attractive product. But the mega-app developers wouldn't even have a market without the devices.

I think of Apple as a resort: they are kind of nice by themselves, but even better when they have vendors on their premise. Those vendors can make lots of money from the customers of the resort. But you can bet the resort charges some kind of vendor fee for the vendors to sell within the resort walls.

"But Apple devices aren't a resort! They are just computers!" you say. And I say - is there really an economic difference here? They clearly aren't commodity computers - they are "Apple" computers. This is observable, this isn't just me pontificating.

That's way cheaper than 30%/15% though, isn't it? Isn't that exactly what the mega-devs wanted?

I think the subtlety is that the phone itself is the infrastructure here - not the App Store.

If the devs can bypass payments for dev kits, then they legitimately are going to get a free ride; what do they think pays for iOS updates and the R&D for the new hardware that's needed for ever-increasingly-resource-hungry apps? If they expect the phone purchaser to pay that, they'll end up with far fewer target customers, because the cost of the devices would have to be vision-Pro like.

The other alternative is that the devs will have to pay up-front for the dev kits, instead of over time. Even if I was a mega-developer, I'd rather pay over time instead of all up front - time value of cash and all that.

So the argument really boils down to "mega devs just don't like paying and want more of the end-users money". I think they are playing a tough game of chicken with Apple here: if they reduce Apple's take too much, Apple's going to falter, so their customer base is going to falter, so in the long run they are going to be screwed.

I can't tell if Apple is looking at the longer term here either; it definitely seems like they are hell-bent on maintaining the status quo, public image be damned.

But until the mega-devs and Apple agree to cooperate instead of just challenge each other the long term prospect is poor.

I do have to say though that the fact that you get Epic's CEO being all belligerent and calling Apple "illegal" makes them sound petty - Apple has never publicly bad-mouthed anyone that I've seen in the news at least. They always use very carefully crafted language.

I doubt that will happen. Apple made what, $100B/year in revenue off services? This means app developers made something like $200B/year revenue. Isn't something like well over 50% of app store revenue coming from iOS? Are these companies really willing to kill their own revenue just to make a point?

I doubt it; my take is they hit market saturation, and now the only way to get more revenue is to get regulators to force a greater share of app revenues their direction. Maybe it's an EU thing, but I don't like the idea of government dictating where money goes.

Make no mistake, these megacorps are not trying to help the general citizen; they are trying to line their own pockets. "Helping the little guy" is a nice side effect at best.

How is that worth $500M per year?

Even at the $20 subscription level, this means they think they're going to get or retain at least 25 million months of subscriptions per year just for WWE? What?

Presumably you wouldn't have to pay the AI CEOs, so it will at least eliminate the social arguments around "CEOs are paid too much relative to workers!"

(nervous laughter)

A change in theory, yes, and I'm in the camp that thinks a switch to analog computing is going to be a big part of it.

Stop trying to "compute" things and instead create systems that just evolve in the desired manner and measure the relevant parameters.

Ah nevermind, you did say they take a cut... missed it on first read.

I don't think it's "tiny" though: Best I can find is about $7 per copy. It's roughly 10% of the retail price. Note a retailer's cut is also roughly 20% of the retail price so... wow magic, 30%...

I just don't see what is so onerous about 30%.

You do know that every copy of a game sold for a console, even not on the console stores, pays a licensing/royalty payment, don't you?

(I don't think that has changed has it?)