The Microsoft Store on Windows 11 is introducing noteworthy new features which were clearly designed to put more money in creators’ pockets, directly challenging Apple’s business model.
STORY HIGHLIGHTS:
- Windows Store will support third-party payment methods.
- Microsoft will take zero commission on such purchases.
- Windows 11 has a tipping feature for creators built-in.
- Microsoft is a vocal critic of Apple’s business model.
Windows 11’s Microsoft Store vs. Apple’s App Store model
Microsoft yesterday previewed Windows 11, which brings lots of new features to PCs like the ability to run Android software. But the Redmond giant is also challenging Apple’s lucrative business model powering the App Store economy by permitting iPhone and iPad developers to use their own payment systems in apps, paying zero fees to Microsoft.
Windows has always stood for sovereignty for creators and agency for consumers, and with Windows 11 we have a renewed sense of Windows’ role in the world. pic.twitter.com/xHldf38B8d
— Satya Nadella (@satyanadella) June 24, 2021
Apple opposes third-party payment methods on the App Store, saying requiring developers to use its own billing system for all in-app transactions boosts security and privacy. This wasn’t lost on Microsoft CEO Satya Nadella, who closed his presentation with a shot across Apple’s bow by saying that the team designed Windows 11 as a “platform for platform creators.”
Windows has always stood for sovereignty for creators and agency for consumers, and with Windows 11 we have a renewed sense of Windows’ role in the world.
Reuters says Microsoft’s move stands in contrast to Apple’s walled garden approach, which involves paying commission between fifty and thirty percent on all in-app transactions.
The biggest shift appears to be to Microsoft’s pitch to developers, content creators and others seeking to make money from the world’s 1.3 billion Windows users, which is nearly as many as Apple’s total installed device base of 1.65 billion users but less than half of Alphabet’s 3 billion Android users.
Windows 11 also brings built-in features for directly tipping content creators such as local news outlets. Om top of that, the company recently lowered its fee on games sold through the Microsoft Store from the fifteen percent it takes on regular apps down to twelve percent.
Will Apple change the App Store business model?
It’s not just Microsoft, however, as some other developers have publicly complained about Apple’s rules. Fanhouse, for instance, is facing removal from the App Store unless it agrees to forking over 30 percent of the fees paid to creators when purchases are made in its iOS app.
On the other hand, Patreon’s iOS app implements a third-party payment service, avoiding the Apple tax, The Verge reported. So, there’s hope that Apple may be appeasing creators after all.
#fuckapple, a thread
I cofounded @fanhouseapp 8 months ago to empower creators to monetize their content. We pay creators 90% of earnings. Now, Apple is threatening to remove Fanhouse from the app store unless we give them 30% of creator earnings. This is theft and exploitation.
— jasmine 🍚 (@jasminericegirl) June 9, 2021
Indeed, Apple at WWDC21 updated the App Store rules with a new clause specifically mentioning digital goods, creators and creator content. With the change, apps are permitted to provide access to creator content if properly moderated and monetized for Apple.
Apple’s business model with the App Store is being scrutinized by regulators in the US and Europe. Apple is also embroiled in a legal spat with Fortnite maker Epic Games, with Microsoft testifying against Apple at one point.
Microsoft is of course a vocal critic of the App Store model. But with Windows 11, the company seems to be directly challenging Apple’s and Google’s business models that depend on charging developers hefty commissions on app and subscription sales.
As the App Store now facing its biggest existential threat since the 2008 debut with anti-trust complaints piling up, perhaps Apple will relent and change the App Store’s business model?
Windows 11 will launch as a free upgrade for all Windows 10 users by year-end.