Video games industry angry about Apple, Google fees, can complain

Tim Sweeney, CEO of EPIC, the video game studio that makes the hugely popular survivor "Fortnite", is no fan of how Apple and Google do business. In 2017 he mentioned the costs that the companies app developers & # 39; parasitic & # 39; charging – and earlier this month the unprecedented step took the decision to & # 39; Fortnite & # 39; to release on Android, regardless of Google's app store, eliminating costs altogether.

This is perhaps the tip of the iceberg.

As long as Google and Apple have managed app stores for their mobile operating systems – the Google Play Store on Android and the App Store on iOS, respectively – the two Silicon Valley giants have charged 30% of all transactions, whether they buy apps or -app purchases. (For subscription services they charge 15% in some cases.)

These costs have long been seen as a cost to do business in the world of apps – but according to a recent survey of analysts at Macquarie Research, a financial services provider and a research company, the gaming industry is growing more and more.

Given our coverage of the game industry, we have behind closed door discussions with game developers who claim that [Apple] and [Google’s] the commission structure is unfair and they can play a more public role in reducing the business model, "the analysts wrote in a note.

"We also heard directly from the CEO of a major game publisher that Apple is a monopoly that is becoming too big. [Google] and [Apple] Continue adding more services and compete directly with app developers, we suspect that some of these voices from the music, video, game business and others may become louder. "

In other words, game companies are personally crazy about the problem in the industry, and more and more are thinking about getting their concerns known – a radical move that can fuel the debate about the suitability of Apple and Google & # 39; s fees a level that has not been seen in years. (Outside the games industry, Netflix is ​​now also experimenting with a way to avoid app retail prices.)

Google and Apple have not responded to Business Insider's request for comment.

There are limits to what game companies can do in the short term, of course. For consumers, the process of bypassing the Google Play Store to get apps technically requires users to change the settings on their phones, potentially jeopardizing their security – something that users are probably less inclined to do differently than the megahit that "Fortnite."

And on Apple & # 39; s iOS such a maneuver is simply not possible: the operating system is locked, without any possibility for developers other than the App Store. It is the road from Apple or the highway.

But a very public display of dissatisfaction could still put pressure on Google and Apple to make concessions, in an era of extreme sensitivity around the public images of tech companies, amid increased dissatisfaction with the industry of regulators, legislators and the big audience.

If app publishers win concessions, this can be an absolute reward for game companies.

Macquarie calculates that King, a publisher of mobile games owned by Activision Blizzard, would see a 12% increase in EBIT (a measure of profitability) in 2020 if the fees were reduced to 15%. The EBIT of 2021 from EA would rise 8%. And the EBIT of Zynga in 2020 would increase by 53%.

These are companies with several billions of dollars – which means that a lot of money can come into the pot. But Facebook and Google probably will not give up too soon; they risk losing billions of dollars by lowering costs.

It is too early to say in what way this will come true, but it sounds like the problem is focusing on a crisis point – and the tech giants have a lot to lose.

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