Fortnite Skipping the Google Play Store
This is a real power play. Epic Games is planning to push Fortnite outside of the Google Play Store by asking users to install an APK file. This will help them run around the exorbitant 30% fee that Apple instituted and Google adopted for their app stores. This isn’t the first alternative app platform to appear on Android; companies like Baidu, Tencent, Itch.io, the open source F-Droid, and even Amazon have their own stores. But it is probably the first that will get major mainstream attention (and installs) in the west. Fortnite is big enough; this will probably work.
30 percent is disproportionate to the cost of the services these stores perform, such as payment processing, download bandwidth, and customer service.
I strongly agree with this sentiment. While it is true that Apple and Google eat a lot of the cost of running massive app distribution platforms (and should be paid for it), 30% of every dollar is signficant, especially when you’re dealing with products that sell for a couple dollars. It makes it harder for a small player to break into a market because now you need significantly more sales and conversions to hit your goals. For a product like Fortnite which is doing 9 figures of revenue a month, the money that goes to these platforms is definitely well beyond the value they provide.
The 30% cut has largely gone unchanged in the 10 years since the stores have been around, largely because Apple drives the market here, and on iOS, Apple has given themselves a complete monopoly on app distribution. Apple has no incentive to lower their cut because they’re making a fortune on it doing relatively little (and even less now that they’re eliminating affiliate payments). Nobody can compete; if you want to make money on Apple’s platforms, you’re either on the web or letting Apple take 30% of the money. And when Apple introduced their iAd platform, they even tried to step that fee up to 40%, before backing it down to 30% because of competition.
Competition is strongly needed in the app space because Google and Apple have such a dominant position that they don’t really make things better for developers. Epic Games could start to challenge that on Android by offering their own store for games if they choose to. They’ve already announced a move to lower their rates of Unreal Engine Marketplace assets to 12%, a far more reasonable level for the type of service that digital distribution platforms provide. We can only hope that they do, and that they can pressure Google (and hopefully Apple) to lower rates. A moonshot hope would be that this shows the value of competition and that Epic and Apple get involved in some kind of lawsuit that might eventually force Apple to stop monopolising app distribution on iOS, but that may be too much to hope for.