Apple protects services revenues – block Steam Link from its App Store

One probable reason for the rejection could be a conflict centering in-app purchases.

In a move aimed at protecting its ability to make money from in-app purchases from games on its mobile devices, Apple Inc blocked Steam, a leading online store for downloaded games, from extending its reach into its iPhhones.

Steam had wanted to release a free mobile app, called Steam Link which would have allowed gamers to continue playing on their mobile phones while being away from their desktop computers.

According to Vale Corp, Steam’s parent, Apple rejected its app.

“The team here spent many hours on this project and the approval process, so we’re clearly disappointed,” said Doug Lombardi, Valve’s spokesman in a statement. “But we hope Apple will reconsider in the future.”

As per Bob O’Donnell, CEO of TECHnalysis Research, Apple’s rejection of Steam’s App could potentially hurt it given that it has many consumers in the age group of 18 and 24 more than half of whom use iPhones.

“What they’re doing is denying iPhone owners access to the most important gaming ecosystem there is,” said O’Donnell. “Given that the younger demographic skews toward iPhones, it seems particularly damaging.”

Steam disclosed that Apple has cited “business conflicts with app guidelines” as the reason for the rejection.

One of the reasons for the rejection is likely to be in-app purchases in which gamers spend small sums of money inside the games to buy digital goods.

As per Lombardi, Steam had disabled purchasing its iOS app. Apple takes a 30% cut for every in-app purchase made within apps through its App Store.

Analysts believe these micro-transactions are among the primary drivers of Apple’s services revenues, which also includes Apple Music, iCloud and the App Store.

In its mosr recent quarter, Apple’s services revenue touched $9.1 billion, beating expectations of Wall Street analysts.

Steam also offers in-app purchases of games routed through its platform while taking a cut.

According to Apple’s App Store policy, such practices are banned unless these are once again routed through its own App store, with Apple getting a cut.

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