Marco Arment, developer for Tumblr and Instapaper, writes about his frustrations with Apple and developing for the iPhone.
All of his concerns bubble up to a frustration over distribution. Apple controls the distribution of iPhone apps the way Nintendo controlled the distribution/licensing for Super Nintendo software.
Benefits of a closed platform
Controlling the platform, Apple can ensure that the quality of the product delivered to the customer is in keeping with the high internal quality standards in terms of interaction with hardware, performance, appropriate content, etc.
For Nintendo it was the same. Nintendo also exerted control to ensure there was diverse content and no two basketball games would be released concurrently.
The limit on distribution
By limiting distribution in this way, Apple is implicitly favoring larger development studios with portfolios of products, rather than the individual developer. Large studios have the benefits of a brand name, a marketing war chest, ability to cross sell applications through their portfolio, and better negotiating power with Apple.
The story is nearly identical to Facebook. Playdom, Zynga and Playfish are developing significant businesses by aggregating games, cross marketing, and providing unified platforms for purchasing virtual items.
The difficulty in creating sustainable advantage is content encourages copying and further reinforces the need for an umbrella organization to support and power game developers.
Limiting distribution shifts market power to the largest, fastest growing organizations