Rarely do I do this, but I feel compelled to in this case. A Youtuber recently uploaded a video basically asking the question: why are people outside the United States paying so much for in-app purchases? They claimed to have copies of communication with Apple where Apple stated that the prices you pay are set by the developer and not Apple. Their point was that Kabam says the higher overseas pricing is not set by them, while Apple says it is set by them, so someone must be lying. In fact, both are telling the truth, and you have to understand how App Stores work to understand what's going on.
This has all been discussed before, on the forums, on the Reddit, but it keeps coming up. This is all also freely available information, so I don't know *why* it keeps coming up. Anyone can learn how this works via publicly accessible information. It is not like the Apple and Google App stores keep the way their developer programs a secret, nor could they with millions of developers out there. In my opinion, the Youtuber in question should have done basic research on this before stirring controversy on this subject, especially when it has been discussed before more than once. Because I've been asked about it more than once, I think it is appropriate to go through this all again.
I'm more familiar with Apple, but my understanding is the Google Play app store works more or less identically, so while I will refer to the Apple store, this all should be the same for both major mobile app stores.
Its clear from the context of the communication highlighted in the video that the person at Apple was a level one-ish customer support person that either did not understand the question or is not familiar with how App store pricing works, thus their vanilla answer "the developer sets the prices." Here's how it actually works.
An Odin costs $99.99 in the US. Kabam does *not* set that price directly. Of course, they know how much money they want, but they way they do this is they go to their Apple Developer price tier chart and look at the US region pricing chart. Based on the most recent version of the chart I have, this is a tier 60 item. *That* is what they set. Kabam tells Apple that an Odin is a tier 60 item. In that sense, Kabam is "setting the price" for an Odin. But then Apple's app store takes over.
What's the price for that Odin in Australia?
According to Apple, a tier 60 item is $159.99 AUD. Apple determines the price for that item in Australia based on the fact that it is a tier 60 item. Apple decides what the conversion is, and that is based on a number of factors for Apple: not just the currency conversion rate, but their own cost of doing business in that region, the currency fluctuation risk, and all sorts of other factors. Point being, Apple can say whatever they want about what their cost of operations is in Australia, We don't know what that is, nor does Apple tell us. Apple simply says that in Australia the item will cost $159.99 AUD, even though the direct currency exchange would imply it should cost about $131 AUD.
What's more, you might think Kabam is making way more in Australia because of this system. After all, Apple is charging about 22% more than the currency exchange rate would imply. Is Kabam also making 22% more? Actually, not really. In the US, a tier 60 item costs $99.99 and Kabam makes $70.00. That's the so-called "30% Apple cut," But what does Kabam make on a tier 60 item in Australia? The Apple Price tier list tells you:
According to the latest version of the tier list I currently have, Apple charges $159.99 AUD and the developer makes $101.81 AUD from that sale. At today's exchange rate, that's about $77.60 as I write this. It is a little more, but in Australia the developer is making only 101.81/159.9 ~= 64% of the revenue. Apple is taking 36%. Kabam is making about 10% more on Odins in Australia, while Apple is making 48% more on every Odin (Apple makes about $30 on an Odin in the US, but in Australia they make $58.18 AUD which is about $44.35 US - that's almost 50% more than the $30 they make on US Odins).
But, you might ask, why can't Kabam say that the item is a tier 60 item in the US, but a tier 57 item in Australia, so that the price comes down? Can't they just work backwards, figure out that Australians "should be" paying about $130 AUD and then set the tier accordingly? Nope: Apple doesn't allow that. Two separate rules combine to prohibit this. First, every in-app purchase item must have one and only one price tier. There's no way to set different tiers for different countries. The API simply has no way to do it. It isn't even a thing that Apple developers are directly told. Since there's no way to set more than one tier, developers don't have to be told you can't set more than one tier.
A tricky developer could try to work around this by offering "US Odins" and "Australian Odins" and set the US Odin price to one thing and the Australian Odin price to something else. Apple developers have in fact attempted to do this. However, this runs afoul of a separate rule, which I will quote here:
Without some special reason or exemption from Apple, you can't sell different versions of the same item in different countries. If you sell Odins, you have to sell Odins everywhere, and that Odin must have one specific price tier, and the Apple App store then determines what the actual cost of that item is in every region Apple operates an App store based on their current price tier sheet, which is updated monthly.
So: does Kabam set the price for Odins, or does Apple? Actually, it is both. Kabam sets the price tier for Odins. That is 100% under their control. But Apple sets the cost that people in each country pay. That is 100% under Apple's control, and Kabam has zero say in it. They cannot set different prices in different countries, nor can they sell customized versions of the items with different prices in different countries.
As always, there are exceptions, corner cases, special circumstances, and Apple can do whatever it wants to on a case by case basis. But these are the rules Apple makes developers play by, and the Google Play store does similar things.
