Comment: Epic has little to lose from its bold Fortnite play on mobile

Craig Chapple is mobile insights strategist, EMEA at mobile intelligence firm Sensor Tower and was senior editor at PocketGamer.biz.

Epic’s decision to circumvent the 30 per cent revenue share owed to the Apple App Store and Google Play with its own mobile payment system for Fortnite has sent shockwaves through the games industry.

Apple and Google have had no choice but to do the inevitable and remove Fortnite from their respective marketplaces. Epic claims Apple is blocking Fortnite from a billion devices, and has released a video calling on its fans to “join the fight to stop 2020 from becoming “1984”. The gaming giant has also filed lawsuits against the two platform holders over the removal.

It’s a bold play, but what does it all mean?

The History

Epic already has some history on the issue of platform royalties, and its CEO Tim Sweeney has long rallied against the 30 per cent cut taken by platforms like Google Play and the App Store. Seeing no alternative for Fortnite’s release on Apple devices, Epic launched the game on the App Store back in March 2018, and to date it’s been a huge success, generating $1.2 billion, according to Sensor Tower Store Intelligence estimates – with Apple taking a 30% cut of proceedings.

On Android, however, Epic took the decision to forego a Google Play release entirely, and instead used its own launcher, a move that mobile’s major publishers have not followed suit with. Epic eventually released on Google Play in April 2020, where it has now generated nearly $10 million and accumulated a little over 11m installs.

Epic’s latest move, to utilise its own payment system instead of going through Apple and Google, clearly violates the terms of the two stores, which have summarily removed Fortnite from their respective marketplaces. It comes as big U.S. tech companies are facing scrutiny at home and abroad over antitrust concerns, and as Facebook Gaming and Microsoft’s Project xCloud have faced challenges offering the services and terms they want on the App Store. Epic has now seized the moment in an effort to force change on the mobile platform behemoths.

What does it mean?

Whatever happens, Epic has little to lose going into this – even if it loses in court. By seizing the moment, Epic has put Fortnite in headlines across major media outlets the world over, once again promoting the game while also galvanizing its playerbase.

It is missing out on revenue in the short-term, but at any time, Epic could remove its proprietary payment system and have Fortnite re-launched to great fanfare on the App Store and Google Play. If it follows the terms and conditions, the platform holders have no choice but to allow the game back on their marketplaces.

Apple and Google have previously cited security concerns as their rationale for not allowing third-party payment systems on their stores, and they expect profitable returns on their platforms. Publishers circumventing their revenue share entirely is not a likely outcome from this move.

A reduction in royalty share could be an eventual outcome, and it is what Epic’s lawsuits are in part pushing for, but this seems unlikely to occur for a long time. On PC, the Epic Games Store applied pressure to rivals like Steam with its 12 per cent cut, plus other benefits for Unreal Engine users. Valve eventually changed its position on its 30 per cent share, reducing its royalties depending on revenue milestones. And major PC game stores do not have publishers circumventing their royalties entirely through proprietary payment systems (though these stores do not in turn owe firms like Microsoft a cut of revenue for utilizing their OS).

On mobile, the landscape is very different, and companies cannot simply launch their own marketplaces in competition with the App Store, and it is very difficult to do so successfully on Android devices in the West. There could be a future in which Apple is forced to allow alternatives in its ecosystem to encourage competition, yet in that scenario, there is no guarantee any of those marketplaces will be successful. And will these marketplaces have to be made available through the App Store and Google Play, or as downloadable apps externally?

Epic Move

What the future looks like is uncertain. Some people in the industry may look back at the time before the App Store, when the idea of a 70/30 revenue share in favour of the publisher was far-fetched. It’s easy to forget some of the features these platforms and storefronts now offer as part of that deal.

But what’s clear is Apple and Google are facing increased pressure from not just governments, but also from the games industry’s multi-billion dollar tech firms to change how they do business. It’ll be a long time before we see changes, if any, but in the meantime, Epic has picked a battle it has little to lose from, and everything to gain.

About Seth Barton

Seth Barton is the editor of MCV – which covers every aspect of the industry: development, publishing, marketing and much more. Before that Seth toiled in games retail at Electronics Boutique, studied film at university, published console and PC games for the BBC, and spent many years working in tech journalism. Living in South East London, he divides his little free time between board games, video games, beer and family. You can find him tweeting @sethbarton1.

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