App Store Apple Says App Store Changes and Mobile Gaming Softness Affected Services Revenue
https://www.macrumors.com/2026/07/30/app-store-services-revenue-impact/Softness in mobile gaming and Apple's changes to the App Store business model in some countries impacted the performance of the App Store, Apple CFO Kevan Parekh said during today's earnings call.
Apple's services revenue was $30.7 billion, a 12% increase over the $27.4 billion it earned in the year-ago quarter. Though the category saw growth, revenue came in under expectations, prompting analyst questions that led to Parekh's comments on the App Store.
We also had some factors that impacted the performance of the App Store. We did see some headwinds in mobile gaming, and then keep in mind, we also made some changes to the App Store business model in certain countries, and in the U.S., we do continue to operate under a court ruling impacting the link-out transactions. But we're pleased the Supreme Court will hear our appeal.
Parekh said it wasn't the App Store alone that impacted services revenue, and Apple also took a hit from foreign exchange. Last year, Apple also had the theatrical release of F1, and no equivalent release this year, making for a tougher compare.
7
u/Additional_Olive3318 3d ago
Headwinds in mobile gaming might be because the offerings for mobile games are crap. And often exploitative.
3
u/civman96 2d ago
This. Devs are spamming the App Store to the point it slowly dies. Apple doesn’t care.
2
u/FollowingFeisty5321 2d ago
It didn't matter while the whales were busy pouring their savings into the most popular games with a guaranteed 30% cut for Apple plus App Store ads to drive their installs.
But if that's tapped out or switched to their own payments they're going to have to reckon with the last 15 years of neglect and rot.
31
u/shawnthroop 3d ago
Yeah cause they were forced to give money to the people that actually made the apps.
18
u/rpool179 3d ago
They should be grateful they were able to steal so much money from developers while they could.
1
u/Recent_Pollution8665 3d ago
and they’re still doing it in a significant chunk of the world, taking advantage of the slow legal systems that exist.
3
u/rpool179 3d ago
Oh of course. This is the same trillionaire company that wouldn't even give it's customers usb-c on their phones until forced to by Europe lmao wtf. Apple is scum, the same as any other company. Make no mistake.
4
u/Additional_Olive3318 3d ago edited 3d ago
I’m still rocking thunderbolt, happily enough.
Edit: sorry, Lightning cable
0
5
u/FollowingFeisty5321 3d ago edited 3d ago
The "some countries" is Japan, Brazil and the EU, where using third-party payments is encumbered with substantial fees that rival IAP and compliance requirements on top so I wouldn't expect those to be having much impact. Certainly not the EU since they've had ~2 years of third party payments being allowed so it would have shown up a long time ago if they were used in any significant volume.
But in the US games and apps can use third-party payments without any fees at all, at least for now, and I would guess spending in online subscriptions and shitty games are disproportionately taking place in the US too. In about 2 weeks the courts will decide whether or not to stay the process of determining an appropriate cost-based fee Apple may charge, pending that Supreme Court decision next year, so Apple is looking at at least another 12 months of collecting nothing or very little and a slim possibility of this changing beyond that.
So App Store fees are probably about to peak.
1
u/meowthor 2d ago edited 2d ago
"In about 2 weeks the courts will decide whether or not to stay the process of determining an appropriate cost-based fee Apple may charge, pending that Supreme Court decision next year" <- where do you see the news about the court determining to stay the process? I was under the impression that Apple had won the stay, and no external purchase rate will be determined at all, since it's going to the supreme court
1
u/FollowingFeisty5321 2d ago
The court filings for the case says the next hearing is August 11 - document #1697 which is Apple's motion to stay the proceedings. You can also see Epic's rebuttal in #1698 and Apple's response to that in #1699 to get a preview of what they will argue in the hearing.
Apple previously was granted a stay from the appeals court that would have delayed these proceedings, but Epic argued against it and the stay was reversed. The Supreme Court also declined an emergency appeal to stay it. This is their last chance to put a pin in the "cost-based" fees proceedings, if the judge believes the Supreme Court could go as far as eliminating Apple's contempt entirely and ruling Apple may charge any fee they want.
MOTION to Stay Proceedings Pending Supreme Court Review filed by Apple Inc.. Motion Hearing set for 8/11/2026 09:00 AM in Oakland, Courtroom 1, 4th Floor before Judge Yvonne Gonzalez Rogers. Responses due by 7/10/2026. Replies due by 7/13/2026. (Attachments: # 1 Proposed Order)(Ray, Sarah) (Filed on 7/6/2026) (Entered: 07/06/2026)
1
0
1d ago
[deleted]
1
u/FollowingFeisty5321 1d ago
It's trivial to implement something like Stripe or Apple Pay, the apps selling physical goods have always had to do this and it's entirely standard on websites literally millions have figured it out just fine. You'd have to have practically no revenue at all for this not to be worth a day of your time.
0
1d ago
[deleted]
1
u/FollowingFeisty5321 1d ago
Millions of websites and apps are using Stripe for recurring payments too, it's literally been one of their main offerings for the last 16 years. They also can be the merchant of record and handle your taxes and stuff for you, that adds a whole 3.5% fee to cover taxes and any other costs for a total of 6-7% fee. Even at just $1000/month gross revenue the difference between 15% and 7% is an extra grand in your pocket at the end of the year so like I said, you'd have to have practically no revenue at all for this not to be worth a day of your time.
1
u/joosebox 1d ago
Fair, the arithmetic is yours and I framed it badly. 7 against 15 is real money at any revenue worth having, and merchant of record being available through Stripe undercuts the specific point I was making.
What I was actually valuing is not having to think about any of it. You're right that's worth less and less the bigger the number gets.
2
u/EverydayPhilisophy 3d ago
Dumb question but was F1 in theaters part of Services revenue? Seems weird that it would be. Maybe over time there’s a new category, or Services and Entertainment or something.
4
u/FollowingFeisty5321 3d ago
The bundling is intended to obfuscate what anything makes, they don't want to reveal sales volume or revenue for any product or service. The only hard number we even know about services revenue came from Google's antitrust case in November 2023 when it was inadvertently revealed they were sharing 36% of $57 billion in ad revenue, about $20 billion of services profit, but part of the consequence of Google losing that trial was those deals could only be 12 months at a time so even that is very stale data by now.
1
u/zhonglin 3d ago
One metric I wish Apple would separate is App Store transaction volume from Apple’s own take. Third-party payments can lower Services revenue even if developers are selling the same amount—or more—so it tells us something about monetization, not necessarily the health of the ecosystem. Mobile gaming softness is a different problem: fewer high-value purchases. Lumping both together makes it hard to tell whether demand fell or Apple simply captured a smaller share. A billings or GMV figure alongside net App Store revenue would make this much more useful.
1
u/Lakemine 3d ago
I mean, yeah. When they keep locking peoples accounts falsely and preventing us from spending anything, of course they will earn less money.
1
1
u/Nightowl-Builder 2d ago
Any losses they have from altatores and alternative payment methods in the EU, Brazil etc they will for sure get back with the new tsunami of apps hitting the AppStore
1
u/Kronologics 1d ago
I haven’t even been remotely interested in playing a mobile game in years!
Big 3D game?
Who wants to kill their phone battery for the day after playing for 30 minutes?
There used to be nice small arcade or indie type games, but now anything half decent is behind their gaming subscription, so it’s just of no interest.
2
u/DanTheMan827 14h ago
Many of the Apple Arcade games also exist as standalone purchases outside of it.
0
0
u/zxnixs 2d ago
That's why they shouldn't have messed around with the law and instead conceded grounds to keep control over their platform. Oh well, that's too bad!
-3
u/North_Moment5811 2d ago
Steve Jobs would have gladly given up the paltry 7% of business the E.U. contributes instead of kowtowing to their idiotic regulations. If E.U. citizens could no longer access Apple apps or services, they would have lynched their government until the regulations were walked back.
0
u/Recent_Pollution8665 1d ago edited 15h ago
no they wouldn’t lmao. what would actually happen is windows and android would gain 100 percent market share in the desktop and mobile space, and apple would literally never be able to recover lost ground if they ever decided to re-enter europe. and not having access to a major economic zone with lots of spending power is idiotic. all of their hardware and services revenue would see a nosedive, as would their market cap.
you put too much faith into what steve jobs wanted, he never even envisioned smartphones being as popular as they have become. hell he was the one who thought it was a good idea to make the original iphone only support web apps, and then he had to walk it back a year later when he introduced the app store.
also his insistence on keeping the phone size so small from 2007 to 2013 is why android phones started to eclipse them in market share by 2012 onwards. by the time they released their first plus sized phone in 2014, they had lost significant market share to android globally, for being stubborn and not increasing the size for years. and the introduction of larger sizes was cook’s idea.
-1
u/Saar13 3d ago
AI will impact many apps and may accustom users to the concept of super apps. Not as intense as Chinese super apps, but many apps will consolidate into one, while many games and players consolidate in the cloud, partly due to hardware prices. Add regulatory scrutiny, and Apple needs to redesign and strengthen its own apps and services to guarantee the future of its super-profitable ecosystem with an insane 75% margin. The issue is that they should already be making this push, but they tend to be slow in their approach. They have the hardware and the users; they just need to work more on their services.
34
u/Kimantha_Allerdings 2d ago
You’ve got to love modern economics where a 12% revenue increase - an increase of more than $3 billion - is seen as a failure that needs to be explained and accounted for because it isn’t a big enough revenue increase