Apple allows NFT sales on the App Store – but there’s a catch

Tech giant Apple now allows NFTs to be bought and sold through applications listed on the App Store. This enables developers of current apps to sell non-fungible tokens in-app and new apps to install NFTs in them.

The first catch, however, is that Apple uses its existing Web2 revenue structure, taking a 30% cut from app developers who make over $1 million through the ‌App Store‌ on an annual basis, and 15% who make less than that.

Android’s app store Google Play uses the same guidelines.

Prior to this decision, apps that stored or displayed NFTs may have violated Apple’s rules. Now developers can sell NFTs with Apple’s blessing.

No crypto allowed – especially not Web3

The other catch is that transactions must be in USD. Crypto is not an option.

Public reactions are mixed. Tim Sweeney, CEO of Epic Games – the company behind the Fortnite video game and no stranger to battles with the tech giant – tweeted that “Apple must be stopped.”

He believes that the 30% cut Apple takes may be prohibitive for some and may even kill small NFT businesses.

This is the basis of Epic Games’ lawsuit against Apple that has been ongoing since 2020. The video game publisher sued Apple for not allowing it to use its own payment platform instead of in-app purchases through the App Store and the 30% cut.

Another company unhappy with the move was Magic Eden, the largest Solana NFT marketplace, which pulled its service from the App Store after learning of the policy, according to a Friday report from The Information.

However, the Magic Eden app continues to be listed in the App Store at the time of publication.

There is a problem when it comes to secondary NFT sales. Marketplaces such as Magic Eden or OpenSea usually charge a commission of no more than 5%.

In this case, if a collector wants to buy an NFT on Magic Eden or the OpenSea app on an iPhone, the seller of that NFT will only get 70% of the selling price. And the marketplace probably won’t be interested in covering the difference.

“This will primarily benefit primary sales or coining of NFTs where the 30% fee can be accounted for,” Milan Harris, director of gaming at Cool Cats, told Blockworks, adding that “the fee is worth the accessibility and user experience which can be provided directly on an Apple device.

He sees this policy primarily benefiting video games, while “the types of transactions that make NFTs and blockchain technology valuable will likely still remain outside the Apple ecosystem,” he added.

Only purchases made directly in the app incur fees, and all transactions that occur on other platforms are unaffected.

On the other hand, Gabriel Leydon, founder of the Digidaigaku NFT project, who is quite bullish, is “happy to give Apple a 30% cut of a free NFT.”

He tweeted that this could give millions more people access to NFTs because developers can still give away free NFTs and allow users to sell them on secondary marketplaces while avoiding the 30% tax.

When asked about the timing of this announcement, Harris said Apple likely felt pressure to act quickly.

Given that Apple’s iPhone is the company’s most profitable product, “Apple doesn’t want to make the mistake of letting competitors take the lead in being the platform of choice for mobile NFT activities — whether it’s gaming, fundraising, etc.,” Harris said.

A contender, for example, could be Solana which recently debuted its Android-powered crypto-first smartphone, slated to be released in early 2023.

Apple is also rumored to be working on augmented reality smart glasses that could be deployed by the end of this year – potential competition for Facebook in the metaverse.

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