Apple has made the decision to finally allow apps onto its App Store that sell NFTs, where previously they had a blanket policy against them. This is a complicated mix of good and bad news that I’ll break down for you.
At Token Gamer, we’re intimately acquainted with Apple’s anti-NFT policy with its App Store. Although they said that they were against the sale of NFTs in apps, the restrictions were far further reaching. We developed the Token Gamer app as a platform for those interested in blockchain gaming to be able to track their wallets (WCW initially, but we’re moving multi-chain!), browse and filter their NFTs by price and age, and keep an eye on the drop calendar. We had (and have) no intention to implement NFT sales in the app, and yet, Apple knocked us back… many times over.
It took weeks and weeks of iterations where we would strip functionality out of the Android version and resubmit it to Apple. They would presumably see reference to NFTs, reject it, and we’d have to try again. There was little in the way of consistency and they were playing gatekeeper to an entire industry. There were significant players in Web3 who were experiencing the exact same problem, including Coinbase! We did eventually get it over the line in early January 2022, but at a cost, despite not selling anything at all — even the app is free!
Well, finally, nearly a year later, Apple has revised its NFT policy and will not only allow apps with NFTs on the platform (which has been gradually happening anyway), but officially allow NFT purchases too. So, why is this not simply good news? Well, let’s start with the bad.
The Bad: A 30% Cut
Most Web3 marketplaces charge a commission on NFT sales in the region of 5%. Apple, upon letting apps sell NFTs, has added a stipulation: the sale of NFTs must be performed through the in-app purchases functionality. Why? Apple is charging a 30% fee per transaction. That is, if you want to sell NFTs in your app, it must be done through Apple’s processes so that they can tax it for a staggering 30%.
Now Apple is killing all NFT app businesses it can’t tax, crushing another nascent technology that could rival its grotesquely overpriced in-app payment service. Apple must be stopped. https://t.co/4KChp6jtFZ
— Tim Sweeney (@TimSweeneyEpic) September 23, 2022
This unconscionable levy will prohibit or dissuade transactions to a degree where most, where possible, will flee to other platforms to make the purchase or sale. As a result, the lifting of the NFT ban is far from what we had hoped would happen. This is not only a tax on businesses selling NFTs through apps, but on player-to-player transactions too.
So, is there any good?
The Good: Potential for Games
There is no way of rebranding the 30% to make it palatable — it simply isn’t. That said, there is a path for Web3 games that wish to use iOS, finally. Not all mobile Web3 games were looking to sell NFTs, particularly not in-app, and so they are now at least able to put their game on Apple’s App Store.
Furthermore, free transactions are unaffected by the tax; 30% of 0 is 0. This means that if a player is to get an NFT drop, or trade an NFT with another player, there isn’t a “sale”, and thus the tax doesn’t apply. This, of course, raises the question of whether NFTs for games could be sold on a browser-based platform and then used in an iOS app; I hope so, but with Apple, it’s hard to say.
This news has been a long time coming, and like so much on the internet, it has been put in one of two camps: either it’s a horrendous and indefensible exploitation of an emerging industry, or it’s finally the green light for Web3 applications to diversify from being solely Android. The truth is: it’s both.