Epic Games: Mobile Gaming Business “Largely Broken,” Cites “Dysfunction” Due to 30% Tax From Apple, Google

While a lot of games get released on mobile platforms every week, not every game hits it big. The ones that do though, they have to pony up a huge sum of 30% to Google and Apple for being available on their respective digital storefronts. This was something Epic Games was not OK with, which resulted in Fortnite being pulled from both the Play and App Store for years.

In a new interview, Epic Games boss Tim Sweeney states that the mobile gaming business is “largely broken” and pins the blame on how Google and Apple puts a tariff of 30% to developers. Not only that, but Sweeney mentions how “no developer” makes a 30% orifit margin.

I think it’s important to realize the state of dysfunction that exists in the mobile gaming business as a result of these taxes.

No game developer has—other than a few companies for a few years, at the apex of their absolute histories of hits—no developer makes a 30% profit margin.

So when Apple and Google take these 30% fees off of the top, the effect is developers have to raise their prices to cover the fees. Raising the prices reduces demand.

The entire game industry is in a suppressed state, compared to what it would be if there were a free and open competition among stores. Developers would make a lot more money. Developers would lower the prices because the profit-maximizing price is actually quite a bit lower than the current price.

And, you know, if we re-introduce competition, then the market would sort all this out and we’ll have a much better position for gaming.

Sweeney has also revealed that they have spent about $1 billion in the company’s fight against Apple and Google, though states that it was a “small price” to pay for freedom of the mobile gaming industry.

In case you didn’t know, Epic Games is finally able to launch Fortnite on mobile platforms once again with the release of the Epic Games Store launcher. While the launcher is available now for Android, it’s still not available outside of EU for iOS devices.

Do you agree with Sweeney’s statements? Or is 30% just right given Google and Apple handle the entire ecosystem of their respective digital storefronts?

[Source: Game File (subscription required)]

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