Apple Still Stands in the Way of Epic’s App Store

The dream of creating a successful Epic Games Store on iOS seems like an oasis: a thriving alternative app store that exists outside of Apple’s walled gardens, where developers won’t have to pay Apple’s much higher commission for in-app purchases, and where they can use whatever payment processor they want.

The Epic Store launched last week in the European Union — thanks to new regulations opening it up to iOS — and that’s likely to be a boon for Epic and its continued success, FortniteBut it’s not clear whether Epic will be able to expand the store beyond its own games.. The company wants to welcome a vibrant ecosystem of third-party developers, but moving to the Epic Games Store could be an impossible ask for any company that doesn’t offer FortniteLarge piles of cash.

“It feels like a win-win situation for Apple, developers and consumers,” says Bob Roberts, an Apple app developer. Circle guard At indie game studio Wonderbelly Games. “It makes life more complicated and confusing without improving the situation in the way people imagined.”

The Epic Games Store may offer better terms for developers, but every developer, including Epic, is still subject to fees from Apple, even outside the App Store. And Apple’s terms and fees for apps on alternative marketplaces are so steep that Epic faces an uphill battle to convince developers that it’s worth the time and money to list their apps at all.

To sell a game outside of Apple’s App Store, developers must pay an installation fee of 50 euro cents per user per year once a certain number of downloads are reached. If developers want to link users to purchases outside the app, they will also need to pay a 10 percent commission on all sales made “on any platform” — including outside iOS. That’s in addition to a 5 percent commission on purchases made within a year of installing the app. After that, they will have to pay whatever fees the new marketplace operator charges. In Epic’s case, This is 12 percent. – A big discount in itself, but a big plus when you consider Apple’s costs.

By comparison, if developers remained exclusive to the App Store, they would pay a commission of up to 30% on all in-app purchases, as well as a fee of up to 25% on purchases made through an external link. There is no annual installation fee per user, which reduces the risk of free games.

For Epic, even if you get stung twice by paying the installation fee on both the download from the Epic Games Store and Fortnite Downloading an Apple app on a smartphone theoretically costs just one euro per person per year. The company may be able to afford that risk in the long run, especially if regulators change things up in ways that shake up some of Apple’s rules.

It’s non-Epic developers who stand to lose out on this arrangement. For one thing, Apple’s per-user fees apply to users in both third-party marketplaces and its own App Store. Steve Allison, general manager of Epic’s Epic Game Store, gave an example in a briefing last week: Take a game that has a billion downloads. If that app gets any updates, even if someone just has the app passively on their screen that they got from the App Store, the developer pays 50 cents for all those updates every year. “That’s unsustainable,” Allison said.

For now, Apple’s new terms only seem to apply to large companies like Epic and developers who don’t generate any revenue from their apps — there’s almost no middle ground. Apple doesn’t charge developers of freemium apps that don’t generate any revenue from their apps to its per-user fees. And while Apple also offers a three-year grace period without fees for smaller developers, it only applies if they don’t exceed €10 million in annual revenue during that time period. Apple offers lower fees to developers in its small business program, too.

Meanwhile, the rest of the developer community is expected to pay the same fees as a giant like Epic Games. According to Apple, an app with over a million downloads and $150,000 in annual revenue will receive roughly half that amount. Private CalculatorThis will be in addition to the 12 percent commission that the Epic Games Store also takes.

It’s an unfortunate outcome, as developers would like to see more options for distributing their apps. “Over the years, the App Store has become overloaded with apps, many of which haven’t been updated in a long time,” says Raffaele D’Amato, an App Store developer. Arcadia – Watch GamesD’Amato had planned to publish his app on a third-party store if there was a dedicated Apple Watch app store because of the opportunity to gain more visibility. “Alternative stores can certainly provide more visibility to apps that really deserve it.”

Some of the biggest third-party developers don’t seem publicly interested. In a briefing last week, Allison said Epic is in active discussions with “almost every one” of the top 250 mobile developers about putting their apps on the Epic Games Store, but noted that “almost all of them” have said they can’t get them to work on iOS. EA (which makes The Sims Mobile), king (Candy Crush), regionally (Monopoly Go!), Supercell (Clash of Clans), and Timmy (Call of Duty Mobile) They did not respond to questions about whether they plan to put their apps in the Epic Store.

It may be a long time before the Epic Games Store for iOS becomes profitable for Epic, if it ever does; the PC store, according to Allison’s testimony last year at least, isn’t profitable yet. But the company expects to start filling up the store later this year, if only in small numbers at first. Allison said last week that Epic plans to offer a “select” collection of third-party games on its mobile store, which is also available worldwide on Android, in December. Allison said Epic is making a “very optimistic push” to bring those games to iOS, though it’s a “very difficult conversation.”

Right now, launching its own mobile store is more about Epic taking some control of its own destiny, and ideally sharing that control with other developers. But Apple still wants to maintain a tight grip—whether a developer is on the App Store or not. And if history is any indication, it probably won’t relinquish that control until it’s forced to.