Apple is putting pressure on Tencent and ByteDance, two of the biggest gaming giants in China to make major changes to their popular Chinese apps, aiming to stop in-app creators from bypassing Appleās 30% in-app payment commission, often referred to as the Apple Tax.
Apple sees a dip in sales in China, but is hopeful about its future
Apple told Tencent to close loopholes in WeChat that let mini-game developers take payments off Apple’s platform. In May 2024, Apple warned Tencent it might reject key WeChat updates unless links allowing off-platform payments were removed. Similarly, Apple asked ByteDance to disable payment loopholes in Douyin, China’s version of TikTok.
These moves by Apple in China come at a sensitive time when its business practices are closely monitored globally, potentially straining its relationship with key creators. The companyās actions also risk upsetting the balance between platform operators like Huawei and Chinaās major internet firms. There might be trouble for the respective games of the two companies as well.
Despite a recent 6.5% sales drop in Greater China, Apple remains hopeful about its future in the region. CEO Tim Cook, who has given more than a couple of visits to China pointed out record numbers for the iPhone install base and upgraders in Mainland China, although concerns over China and Services performance slightly affected the companyās stock.
There must be something with companies from China avoiding the 30% payment fee of Apple with some sort of loophole, with Tencent and ByteDance not being the first ones to do so. HoYoverse, who Apple has strong ties with after Cook met with the creatorsĀ ofĀ Genshin Impact, attempted to avoidĀ the 30% commission policy to achieve revenue growth not once, but twice.
Apple is pretty strict when it comes to these regulations, and we all know its legal dispute with Epic Games, the makers of Fortnite, which was removed from the App Store. This aggressive stance is part of Appleās broader strategy to tackle regulatory challenges and keep its competitive edge.
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