Tencent Addresses Apple's Revenue Sharing Dispute

Tencent Addresses Apple's Revenue Sharing Dispute

By
Yuki Tanaka
2 min read

Tencent Negotiates iOS Mini-Game Revenue Split with Apple

Tencent recently addressed the controversy over the "Apple Tax" during its earnings conference call, stating that it is negotiating the revenue split for iOS mini-games with Apple. James Mitchell, Tencent's Chief Strategy Officer, highlighted that app stores charge up to a hefty 30% cut on games and digital content, posing a significant burden for developers. Currently, Tencent does not monetize mini-games through in-app purchases on the iOS platform. The core of this dispute lies in advancing a fair monetization model for mini-games. Additionally, Tencent's second-quarter revenue growth has picked up, and there has been an increase in active users on WeChat and advertising revenue from mini-games.

Key Takeaways

  • Tencent is in negotiations with Apple regarding the revenue split for iOS mini-games.
  • App stores levy up to a 30% cut on games.
  • Tencent currently does not monetize mini-games through in-app purchases on iOS.
  • Tencent advocates for advancing the monetization of mini-games on a fair basis.
  • Tencent's Chief Strategy Officer, James Mitchell, addresses the "Apple Tax" controversy.

Analysis

The negotiation over revenue split between Tencent and Apple could impact developer income and market competition. Apple's high cut rate may prompt Tencent to explore alternative monetization strategies, such as advertising. In the short term, Tencent's revenue growth has rebounded, but in the long term, the negotiation result may affect its profit model. This move may prompt other platforms to emulate it, reshaping the rules of the digital content market.

Did You Know?

  • Apple Tax:
    • Explanation: The "Apple Tax" refers to the commission that Apple Inc. charges on digital goods and services sold through its App Store, typically 30%. This fee is a significant revenue stream for Apple but has been criticized for being a high barrier for developers and content creators.
  • iOS Mini-Games:
    • Explanation: "iOS Mini-Games" refers to small, casual games developed specifically for the iOS platform, which is Apple's mobile operating system. These games are often simpler and more lightweight than traditional mobile games and are typically distributed through Apple's App Store.
  • In-App Purchases:
    • Explanation: "In-App Purchases" are a business model where users can buy additional content or features within an app after they have downloaded it. This can include anything from extra game levels to subscriptions for premium content. Apple takes a 30% cut of these transactions, which is part of the "Apple Tax" controversy.

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