Apple introduced the App Store on iOS as a digital distribution platform for games and apps and revolutionized the way software is distributed on mobile devices. Roughly, 15-20 years ago, one would have to visit a store to buy a game or software, and the store would charge around 50% as a mark-up fee. The App Store, on the other hand, takes a 30% cut from developers. Google followed the same model on Android. Both Apple and Google tout about the role of the respective app stores in creating new jobs in the “app economy”. And while Apple says it treats all developers equally, there are sops given to the likes of Amazon Prime Video by charging a lower % cut. This has led to a battle royale between Apple and Epic Games.
Recently, Fortnite creator Epic Games bypassed the App Store payment gateway, after which Apple booted the game out of the App Store and also terminated their account. In return, Epic Games filed a lawsuit against Apple, after which Apple also filed its counterclaims alleging breach of contract. In a court filing, Epic Games accused Apple to maintain its monopoly over in-app payments on the iOS platform and inflating prices. This battle that would eventually hurt Epic Games more as millions of Fortnite players access the game from Apple devices. It will be interesting to see how this battle will eventually resolve.
In the latest episode of ‘The Counterpoint Podcast’, host Peter Richardson is joined by Dr. Richard Windsor to talk about the App Economy and the problems related to it. He is the Research Director at large at Counterpoint Research, and also the founder and owner of the research company, Radio Free Mobile. In the podcast, Richard deep dives to explain about the battle royale that is happening between Apple and Epic Games. The discussion also touches upon iOS 14 mandating App Tracking Transparency and the implications. He also shares his views on a better way to grow the app economy.
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