Epic Games, the developer of the popular Fortnite game, is in a court battle with Apple, claiming that it is a violation of the antitrust law for the app distribution platform App Store to collect high fees. The trial data predicted that these Epic Games would lose $273 million to counter the rival game distribution platform Steam.
Epic Games claims that the 30% commission on Steam is ridiculous, and sells many game titles exclusively through its Epic Games store in response to Steam. This monopoly strategy has also generated complaints from users, but Tim Sweeney’s CEO said that the only strategy to break the permanent impact in the gaming industry is to break the monopoly.
In addition, Epic Games regularly runs campaigns to distribute games for free as a strategy to counter Steam. The distribution title includes not only indie games, but also free distribution of AAA titles.
However, according to testimony by Epic Games executives in data submitted by Apple to the court, the Epic Games store was found to be out of profit. According to data, the Epic Games store lost $183 million in 2019 and $273 million in 2020.
To carry out the strategy of delivering popular titles exclusively on the Epic Games store for a limited time and selling them on other platforms half a year or a year from the launch date, Epic Games must pay a minimum deposit to game publishers. Epic Games, for example, was reported to have spent $1.45 billion on a control monopoly, an action-adventure game.
Reportedly, Epic Games admits that the store’s profits are not correct, and expects a loss of $139 million in 2021. In addition, Epic Games believes that there will be considerable difficulties, such as incurring an unrecoverable cost of $330 million only for the minimum deposit for exclusive sales.
In the Epic Games store, the sales fee is set at 12%, which is less than half of the App Store or Steam. However, Apple is emphasizing in the trial that it is economically difficult to operate a game distribution platform for a 12% commission. Apple also expressed the view that the average monthly active users and revenue for Fortnite were declining from 2018 to 2019. In response, Epic Games claims that a 12% fee is sufficient to satisfactorily operate the Epic Games store, including payment processing, customer service, and bandwidth, and denies Apple’s point. The contents of both companies’ claims will be revealed at a trial in May. Related information can be found here.