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The ripple effect of Epic Games against Apple Battle Royale

It was only five years ago that Epic Games’ Josh Adam and Bill Bramer were on stage at Apple’s WWDC demonstration of Fortnite and talked about how amazing the iOS platform is for developers. Unless you’re hiding under a rock, you know where this is going.

The legal and PR battle Epic launched against Apple to remove its app from stores shows a clear rebellion against the power of the platform as it once headlined.

Epic Games does not fight David against Goliath. Sure, it’s tax insignificant compared to Apple: a turnover of 4.2 billion dollars in 2019 against Apple’s 260.2 billion dollars. But we’re still talking billions, and that will have an impact far beyond these two companies.

At first, Epic looked like it was taking a stand against injustice and representation everyone gaming companies that suffer from a 30% reduction in revenue on all transactions in the app. But the longer this continues, the less explicitly noble Epic looks. It is trying to turn users against Apple, which has apparently struck back. It turns out that if someone cares about playing Fortnite, they will only use other platforms.

What matters now is how this affects everyone else, and I̵

7;m not talking about players or gaming companies.

Brands began to see the opportunity in apps a decade ago and have released their own IP; Now, with the pandemic creating a huge boost in mobile commerce (almost $ 300 billion this year), there is a huge opportunity to capture not only attention and brand loyalty, but also dollars.

But apps with brands, just like games, live within the fenced gardens of the app stores. And the companies that run these stores have their own set of rules – and especially Apple has made it mild.

Prepare to pay a 30% fee for in-app purchases

When it comes to gaming, Apple will continue to put its foot down and charge a fee or place an extremely high logistics bar, but when consumers use the Airbnb app to book a stay or Uber / Lift to book a trip, Apple does not take it 30 % of payment. It also does not cost 30% on top of a Walmart, Amazon or food order. This is a big part of Epic’s argument about buying V-Bucks directly: Apps like Nike SNKRS, Best Buy and Fandango allow direct purchases, so why can’t games?

Apple says that this is because these are (mainly) tangible goods and services that are used in the offline world, that is, not used in the app itself. But Basecamp had to withdraw with the email app HEY, and COVID-19 also forced several apps to pay Apple’s tithe or have nothing to offer at all. If Apple gets a clear victory over Epic, it could actually call the cut a “processor fee” and look at leveraging it in other situations that brand apps are more familiar with.

Brand publisher or advertiser, both will face fallout from iOS 14 changes

The 30% cut for IAP is high – so high that many smaller developers who do not have deep pockets like Epic Games will not earn enough to survive without advertising as part of the revenue model. What used to be an additive is now a core practice for revenue generation.

Apple is not a fan of in-app ads. They believe that these lower the quality of the platform as a whole, and perhaps most importantly, it does not make money on ads in the app. Enter (delayed) changes in iOS 14, where removing a Key Revenue Driver (IDFA) in the name of their “privacy as a function” value proposition will place app publishers and advertisers in a volume.

You must play by Apple’s and Google’s rules, even if they change

Previously, Apple was the voice of the developer; most app publishers were even Apple fanboys who thought the platform could do nothing wrong. Those days are now gone, and many developers believe that Apple’s garden has grown beyond their ability to manage it in a transparent way – and that it costs too much to play in that garden.

Monopoly (or duopoly) argument aside, it now states that anyone who has an app, whether you are a large gaming company like Epic, a small, independent app developer or a Fortune 500 brand, must be more aware of the terms of use of the app stores , and follow them. Apple has officially finished humiliating legal teachers’ interpretations of their “laws”, and they will not keep an eye on violations of any kind, from anyone.

Jonathan is AdColony’s senior director of global marketing and communications.

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