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Opensource is very much welcome. But I have a doubt here. Can some one take their lets a simple "Alphabet Block game" ..do some minor modifications for UI or add simple features and submit to Apple for free/99cents?? If this is the case it will clearly affect insurgents sales right? Is it a service they are doing or they are expecting developers to fix issues or enhance the games ...what could be their main motive.

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You should read the post before commenting. They're not selling any games anymore, they're open sourcing everything. So how would it affect sales? And yes, you can, but if you take their code, fix it or whatever and then sell it you will still have to provide the modified code under GPL since the original was licensed to you under GPL. But as long as you do that you _can_ charge for the distributable of course.

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