Walled gardens have been under discussion for many years. For, well, decades, companies have been criticised for trying to keep tight control of their customers, where they go, where and how they shop and what they do and see online.
That is now changing – properly.
Walled gardens come in different forms. The early ones belonged to the telcos and one large European telco’s first attempt at a walled garden was described as being more of ‘a letterbox’ than a garden. Customers could post a request and wait for a response.
Then, of course, the tech players got involved and famously Apple and Google set up stores where customers could buy apps and games and productivity tools. The catch was that you had to buy it through Apple or Google, who effectively owned the shop and the payment mechanism and charged product owners like a wounded rhino.
For smaller players and developers, a 30% hit on revenue was probably worth it because at least your products were visible in the store, so your promotion costs were less. But as success bred success, larger companies objected strongly and realised that 30% of revenue was their R&D budget (and more) and having Apple or Google take their cut was now impractical, greedy and, well, basically a rip off.
Enter Fortnite, the games company, who effectively did a round of funding to bankroll what was always going to be a long, hard and very expensive fight with Apple to bring down the walled garden (or at least reduce the commission) and allow 3rd party payments systems to be used by their customers.
That fight is indeed long, hard and very expensive (just ask that lawyer whizzing past in his new Porsche) but Fornite has thrown the first rock and the walled garden is beginning to crumble.
While the fight is essentially a commercial one, the South Korean regulator has come to the aid of the party and thrown a far bigger, legally enforceable rock at the wall. The real target in this arena, according to many, is Google and the law has been dubbed the ‘anti-Google’ law.
Both companies have submitted plans to dismantle the payments walled garden and allow access to 3rd party payment schemes (that do not charge 30%).
All of which is good.
Payments are not the only walled gardens being dismantled. Similar restrictions (long contracts for example) on customers are being taken down or reviewed across the world, as telcos and tech companies realise that Millennials and Gen Zers will not put up with that kind of strait jacket.
It makes sense to dismantle walled gardens, they are like parents clinging onto their children as they grow up and the same adage applies. If you love them let them go – they will come back (if you treat them right).