The Epic Games v. Apple conflict centers on two main points. First, that 70% of the App Store’s revenue comes from mobile games. And second, that most of this revenue is generated from the 30% platform fee taken on In-App Purchases.
From these inputs, the App Store generated $48B annual gross sales from mobile games with the same rudimentary pricing Apple implemented years ago.
While the gaming community certainly appreciates what Apple has done to propagate gaming, developers feel like they now contribute substantially to the platform’s success—and should benefit appropriately.
It’s time for Apple to adjust its pricing model to reflect the impact developers are making to Apple’s growth.
Apple’s reluctance to relinquish its 30% fee may be its undoing: in gaming, maintaining the status quo is risky. Just ask Facebook.
In the early days, Facebook utilized games to grow—letting companies like Zynga send requests to millions of people daily, which helped grow games but also the Facebook platform—only to later treat games with contempt once the Facebook platform was more established. This made new opportunities, like mobile, more attractive and games eventually moved on.
So we’ve seen this story play out before with an unhappy ending for platforms not able to maintain a symbiotic relationship with games.
Hopefully, Apple will invest in a pricing solution that values the outsized contributions that games like Fortnite, Among Us, Pokemon Go, Genshin Impact, PUBG Mobile, Clash of Clans, and others have and have had on driving iPhone device sales, platform revenue, and engagement.
The cynical side of me thinks that Apple may merely try to appeal to users by superficially reorganizing its payment policies to project good will, like it arguably did in November of 2020 (when it dropped its fee to 15% for businesses making less than one million per year). As a big Apple fan, I hope this is not the case.
Because with forward thinkers like Tim Sweeney of Epic continuing to push the limits of gaming metaverses, NFTs becoming mainstream, and play-to-earn emerging as potentially a new opportunity, Apple should note the words of Steve Jobs:
“Sometimes when you innovate, you make mistakes. It is best to admit them quickly and get on with improving your other innovations.”