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What Apple 30% NFT Commission Mean for Mobile Web3 Gaming

Apple announced they are applying the 30% commission and limiting all NFT in-app purchases to USD. What does that mean to web3 mobile gaming?

Mostafa Salem author picture}

Mostafa Salem

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To the surprise of many, Apple announced their official and public support of applications selling NFTs as in-app purchases as long as it complies with their 30% commission cut. This means that all NFTs sold must be done so in the form of in-app purchases. Understandably, a lot of projects are either trying to find workarounds or have already taken down their applications from Apple's App Store. It is worth mentioning this is applicable even to projects who are purely trade facilitators.

There is no denying the road to mass adoption is through attracting the attention of Apple and the likes to web3 and the benefits it brings to their users. As true as that is, when the major corporations get involved, they enter on their terms. At the same time, there is no denying the fact that simply Apple mentioning the word NFTs and their App Store stance towards it tilts a lot of heads into researching what NFTs actually do or what they are.

With The Treeverse, Guild of Guardians, and many other web3 gaming titles prioritizing mobile over PC or consoles, it can play in their favor and attract potential players to their games. At the moment, Apple is still on the edge on whether games like these are eligible to be part of their "Game of the Day" or included in their "Apple Arcade" package. According to a research done by Apptopia earlier in 2017, "Game of the Day" increases downloads by 792% for the duration the app is featured for. This is incredibly significant and can be instantly felt especially with web3 games.

These numbers are what web3 gaming needs to grow, and Apple provides instant access to close to a billion users. Nonetheless, there are over 300 Million apps added over the past year alone. If you don't stand out or aren't amplified through Apple's various featured segments your chances of discoverability are very slim and to get featured, you need to comply with all of the rules so everything always comes full circle. Whether a web3 game wants to or not is up to them and the amount of sacrifices they are willing to make with their in-game experience to attract the additional users.

However, all of the above comes at a price. The implications of Apple's 30% commission on any NFT in-app purchase is far beyond just the number itself. Any purchase has to be done in USD, and considering the market volatility and the projects looking to price items in their native tokens, this is very counterproductive to everyone. The latter is especially difficult for web3 games prioritizing mobile players with no other app store to list themselves on outside of Apple's official marketplace.

Gaming contributes to 70% of the entire App Store's revenue, according to a report issued in June 2022. With most of these games being free-to-play and adopting a model where in-app purchases are their bread and butter, the 30% cut managed to rake in $14.80 billion in 2021, according to estimates by Kagan, a media research group within S&P Global Market Intelligence. Having said that, web3 gaming is still in its infancy and extracting this much money from the ecosystem at the moment would be detrimental to a number of projects’ survivability.

One of the solutions proposed by many is to simply avoid Apple’s App Store as your storefront to sell your game and promote the existing decentralized application marketplaces present in web3. Realistically, at the moment none of the available solutions come close to what the App Store has to offer or the number of users it brings with it. Down the line, this might be very well the answer we need to topple the grip tech giants like Apple have on the mobile industry.

At the same time, several prominent founders and CEOs of NFT marketplaces, where these games sell their in-game NFT assets for players to buy, specifically voiced their opinion on the situation. Some of them even expressed how their own products can overtake the App Store’s involvement in web3 if this continues. 

Alexei Falin, CEO of Rarible, stated the announcement gives off the impression “that Apple doesn't really want [App Store] users to be able to purchase or sell NFTs." Meanwhile, Anatoly Yakovenko, CEO and Co-Founder of Solana Labs, tweeted ironically that the move actually supports the blockchain’s upcoming native Solana Saga phone. The mobile device is supposed to have native NFT and wallet integrations that allow you to seamlessly use all your dApps without the extra hassle users go through at the moment on both Android and iOS devices.

To sum it all up, gaming will forever be the number one driver of Apple’s App Store sales and traffic. The rise of web3 gaming and its focus on mobile will have to either adopt the hefty commission applied by Apple to gain instant access to millions of users or promote more web3 native solutions. The latter would be a very brave choice to take at the moment but inevitable nonetheless as time progresses if we wish to see true decentralization and avoid the hands of hungry corporations.

What do you think the future holds for web3 gaming and especially mobile games with in-game NFTs? Do you think we will eventually see a clear decentralized equivalent to the App Store for games to sell their NFT assets? Let us know your thoughts in the comments section down below.

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updated:

November 10th 2022

posted:

September 25th 2022