Newsletter #22: Apple’s 30% Commission Rate Pushes Away Web3 Gaming Projects

From the Editor,

GM fellow tigers,

"Web3 gaming projects will need to come on mobile to onboard the next billion users," according to Ledger Prime’s Lead of Investments, Joel John.

We agree! Mobile is unquestionably the biggest platform right now. According to Statista, over 6 billion people use smartphones in 2022. A whopping 27% (1.6 billion) of these mobile devices are iPhones.

Source: Statista Number of Smartphone Subscriptions Worldwide

Companies with such dominance in a market essentially control the destiny of any emerging technology. There have been many tech casualties on Apple’s way to becoming the biggest technology company in the world. The latest in line of Apple’s victims are NFT startups.

The tech juggernaut recently made a drastic change to its app store policy for NFTs. According to crypto reporter @AidenRyan, Apple will now require NFT startups to sell their tokens as in-app purchases. This is a big deal because every in-app purchase through the App Store is subject to a 30% tax. Tokens are a fundamental part of Web3 games, which is why this massive tax rate will hit the Web3 gaming market the hardest.

Web3 games will need to increase the price of every in-game token by 30% to make up for this latest policy change by Apple. which will definitely affect the sales of these assets, especially as many NFTs are already pretty darn expensive for most gamers. For this reason, many NFT startups are now considering moving away from the App Store.

NFT marketplaces don’t even bother opening up the buying and selling functionality on their IOS apps. Leading marketplaces like OpenSea and Magic Eden only allow users to check NFT prices and their personal collection on their IOS platform. Magic Eden co-founder Sidney Zhang explicitly told the Information that this is due to the high commission charged by Apple.

Skipping IOS will be a huge decision for web3 gaming projects considering the total addressable market size Apple brings to the table. However, the tech giant’s vague anti-NFT policies make it nearly impossible for these startups to stay on the platform without incurring major losses.

Industry insiders believe that a crypto-based app store is a potential way to reduce the influence big tech has over the Web3 gaming and NFT markets. Solana’s CEO, Anatoly Yakovenko, thinks that Apple’s restrictive policies might just accelerate the adoption of the Solana Saga—a new crypto-focused smartphone developed by the company.

Apple's stance on Web3 technologies like NFTs shouldn't come as a surprise. Most closed ecosystems don’t like Web3. Ultimately, we too believe that restrictions from gatekeepers will cause true believers to look for or create more favourable alternatives.

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