On December 9, The Verge reported that Epic Games attempted to submit their top-grossing franchise, Fortnite, on Google Play Store. Google refused to submit Epic’s battle royale hit. The company insists that Epic has to pay the 30% commission of the marketplace without any exceptions.
In the official reply to The Verge, Google’s spokesperson explained that the entire Android system depends on the current fee size. The current size of the fund flow determines the size of reinvestments into the Android operating system. It’s also the major source of money for a decent security firewall maintenance, efficient app promotion, robust analytic tools, and hosting of apps. Google insists that a 30% fee is obligatory. At the same time, the tax falls down to 15% if a developer provides access to the service via a subscription.
Unlike Apple’s App Store, Google Play doesn’t monopolize the app market within the Android ecosphere. There are several third-party stores that work legally. Google’s billing policy and monetization model is permanent for all developers, independently from their capitalization. According to Google, such a strict approach to distribution is the only way to provide a reliable and safe experience to users.
Google also claims that Epic pays the same 30% commission to Apple. Though it’s impossible to check, the point sounds reasonable as all other apps pay the transparent 30% tax. It means that Fortnite developers had only 2 ways to deal with Apple. The company prohibits 3rd party distributors, so Epic could only agree to pay or forget about iOS users forever. Fortnite is a free-to-play franchise. It means that Epic receives money only when players buy battle passes and various cosmetic items.
Epic Sounds Reasonable Too
In its official response to the absolute market leader, Epic said that a 30% commission for every in-app purchase is illegal. The developer believes that a distribution platform with the largest market share on several markets simultaneously doesn’t have the right to request so much money. For that reason, Epic offered its proprietary payment service as an alternative.
The accusation that Play Store runs illegally is a rather spicy statement. However, the has been no application to a court yet. As an example of the right business model, Epic points at its Epic Store. It’s currently one of the leading PC marketplaces for video games. The key principle of the store allows developers to integrate their own payment services. If they decide to use the Epic’s solution, the fee size is twice lower than on Google Play.
Epic CEO Tim Sweeney is convinced that Apple and Google have built monopolies. He thinks that the flat 30% tax leads to a disproportion between the price of their proprietary services and 3rd party apps. Epic Store’s 88/12 business model reflects his point of view.
Is It The Time?
Nevertheless, Epic’s attack on Google seems over the top. Google still allows Epic to distribute its Fortnite installer. The rebranded version of the app lets the developer provide new versions of the game to players bypassing Play Market. Epic doesn’t pay anything to Google and takes 100% income from in-app purchases. For that reason, the demand for an exception looks pointless.
Sweeney continues to protect his position with strong arguments. On Game Developers Conference 2018, he said that the time for a change came. The 70/30 model was initially introduced by Steam and revolutionized the business. It allowed developers to avoid the 30/70 model and earn more money than ever before. Today, Steam, Google, and Apple are so big that service maintenance costs them (presumably) very little money.
As an example, he mentioned Visa and Mastercard banking systems that take only 3% from average transactions. That seems to be enough to keep the system perfectly moderated and secure for customers. Here the justification by Google starts to look rather vague.
Many AAA game developers have supported Epic’s initiative and made their games exclusive for the publisher. The list includes The Division 2, Dauntless, Red Dead Redemption 2, Metro Exodus, Ancestors, and over 50 other popular titles.
Epic’s strong wish to distribute Fortnite via Google Play is actually a good idea. The early version of the installer had a substantial breach. Hackers could have used it to spread malware and steal personal data of users. Although Google helped Epic to solve the problem quickly, there’s no guarantee that it won’t happen again. The developer doesn’t have enough facilities to prevent that in the bud.
What is your opinion about the controversy? Should Epic bend its knees and pay the 30% fee to provide security to users, or is it better to fight for the next revolution? Leave your opinion in comments and share the article to discuss it with friends.