It would be fair to say NFTs have limited usefulness right now — even crypto fans would have to concede that point. However, Apple may have found a use: to make more money for Apple. The iPhone maker has updated its developer terms to severely limit how apps in its store can use NFTs. The bottom line is developers can’t use them unless Apple gets a cut of the sales. If you’ve kept up with the silly pricing of some NFTs, you know that skimming 30 percent off the top could be a lucrative business.
There have only been a handful of blockchain-based games (sometimes called Web3 games) that utilize NFTs. Usually, the NFTs are virtual items that can be used or worn in the game, similar to the way Ubisoft crammed “unique” guns and helmets into Ghost Recon: Breakpoint earlier this year. Apple’s App Store policies are always adapting to ensure the company continues to make a boatload of money on mobile transactions, and it takes aim at NFTs in the latest update for iOS 16.
According to Apple’s new developer payment guidelines (section 3.1), NFTs are allowed in iOS apps with a few big caveats. The only way apps can provide NFTs for sale inside iOS apps is by going through the in-app purchase system. Doing that entitles Apple to a 30 percent cut, and some NFTs are worth the equivalent of thousands of dollars. And if you think you can just buy the NFTs for your Web3 game elsewhere, think again. Apple also says that while apps can let users browse their pre-existing NFTs, apps cannot use ownership of those items to “unlock features or functionality within the app.”
A great summary of Apple's latest policy insanity from @FOSSpatents: https://t.co/0QgqbDL7gK. It's quite shocking that, in the presence of antitrust lawsuits and greatly increased legislative and regulatory scrutiny, Apple's doubling down on brazen monopoly rent seeking.
— Tim Sweeney (@TimSweeneyEpic) October 25, 2022
Epic Games CEO Tim Sweeny came out swinging on the news, which he called “insanity.” That’s no surprise as Epic continues to tussle with Apple over App Store fees. According to Sweeny, Apple’s new policies amount to “brazen monopoly rent-seeking.” Fortnite doesn’t have NFTs right now, but Epic Games has started listing its first web3 games. Perhaps this is where Epic plans to go, and thus, it would be even harder for Fortnite to return to the App Store.
It’s clear that Apple has identified NFTs as a threat to the App Store model, and there is very little crypto enthusiasts can do about it. Epic has been trying to get courts to recognize the App Store as an illegal monopoly, but it has had limited success. An appeal in the case is still pending, but the only factor still in consideration is whether Apple has to allow developers to link other payment methods — all Epic’s other complaints were thrown out. Apple has no incentive to backtrack on NFTs.
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