30 Percent (Premium)

With antitrust regulators around the globe poised to dismantle the most lucrative and unfair of Apple’s Services offerings, it’s useful to understand where its App Store fee structure originated and why double-digit fees make sense in some markets but not in others.
?️ It’s Nintendo’s fault
Nintendo entered the videogame console market in Japan in 1983 with its Family Computer, or Famicom, so named because the company originally sought to make the device expandable into a home computer with a keyboard and floppy drive. But as the product evolved, Nintendo decided that making it simple, affordable, and familiar were key to success. And so Nintendo moved the slot for its overly large cartridge to the front of the device, where it would use a VCR-like loading mechanism, redesigned the durable, kid-friendly controllers to be hard-wired to the device, and dropped the computer add-ons.

Unfortunately for the broader videogame industry, 1983 is remembered more for the other major milestone that occurred that year: The videogame crash that triggered the death or irrelevance of the best-selling U.S.-based consoles from Atari, Coleco, Magnavox, and Mattel Electronics and the related market shift to U.S. consumers playing videogames on home computers.

The crash didn’t impact Japan, but it gave Nintendo and other Japanese videogame makers like Sega time to establish themselves in their home market. The Famicon cost less than half the price of non-Japanese consoles, and Nintendo supported the device with ports of three of its arcade games: Donkey Kong, Donkey Kong 2, and Popeye.

By the end of 1984, Famicon was the best-selling console in Japan. And Sega, another arcade game maker that had launched its Computer Videogame SG-1000 shortly after the Famicon, was a distant second. For the next 40 years, Japanese companies—including Sony, which entered the market in late 1994 with the original PlayStation—would dominate in videogames.

But for that to happen, they had to succeed in the United States first. And that meant overcoming a few hurdles triggered by the videogame crash of 1983. Nintendo and Sega had to overcome retailer opposition to dedicated videogame machines. And they had to convince consumers that their consoles were different and also better than the previous American consoles or home computers.

Nintendo rebranded the Famicom to deemphasize videogames, first to the Advanced Video System (AVS), and then to the Nintendo Entertainment System (NES). And it did the same for system components: The console was called the Control Deck, and its cartridges were Game Packs. And it marketed the device as being more sophisticated than the failed U.S. consoles, with optional accessories like a light gun and the Robotic Operating Buddy (ROB).
⌛ If I could turn back time
I happened to be working at a Toys R Us retail store in the Boston area in 1985, and I recall getting a phone call late that year from a customer who had just been in New...