Epic’s court victory over Google could signal a seismic change in the economics of Android games.
The dream scenario for many now is that the court enforces a free choice of default payment provider, meaning third parties could compete with – and undercut – Google’s 30% tax on all IAPs. Measures to make alternative app stores a more visible and viable option would also be welcomed.
So more money flowing back to game-makers is the dream, but what’s the reality? Judge Donato, who oversaw the trial, will now discuss potential remedies with Epic Games and Google in January, but Google plans to appeal the decision, of course. So we’ll have to wait for all of that to play out.
But in the meantime, companies working in the payments and alternative app store business are understandably thrilled. Xsolla interim CEO Chris Hewish told us: “The recent app store ruling is a pivotal moment for the gaming industry, emphasizing the need for transparent market practices and reinforcing our stance at Xsolla on the importance of direct-to-consumer relationships.”
“This verdict supports our view that developers should freely connect with their audience, fostering a more cost-effective and community-centric approach,” Hewish continued. “It allows developers to use direct channels, like web stores, for effective distribution and monetization, avoiding large platform fees and restrictive policies. This decision boosts profitability and cultivates a diverse gaming environment where innovation thrives, and players enjoy broader content access.”
Flexion CEO Jens Lauritzson told us: “We are thrilled to see Epic win this first big battle against Google. It is a victory for all developers, alternative app stores and most importantly consumers. An open eco-system for developers is an important foundation for a continued strong games market.”
It’s also good news for StoreRider, a new alternative app store outfit. CEO Xavier Liard says that “it’s still too soon to say for sure, but the Digital Market Act in Europe and this ruling could open up some new ways to distribute apps. We’re not sure if it’s going to be a game-changer for most developers, but the ones who are savvy enough to jump in early on these new stores and figure out how to make the most of them could definitely come out on top.”
Liard adds that he’d like to see the court encourage the use of safe third party stores and payments on Android, “but we need to be careful to set up some rules to keep shady alternative stores at bay. The court needs to play it smart in tackling monopolies, making sure it doesn’t accidentally make things worse for the end users,” he adds.
Stash is a new direct-to-consumer payment platform. Head of product Archie Stonehill calls the Epic verdict “a major victory for developers and the ecosystem.”
“The wind is blowing in one direction – going into 2024, game developers will be entering a period of unprecedented freedom to own and operate payments, app distribution, data, and identity without intermediaries,” Stonehill continues.
“Epic v Google is part of a global trend, including the DMA in Europe and the DMCC in the UK, that is accelerating de-platformization, a process in which game developers are taking control away from the platforms and essentially becoming their own platforms.”
“IDFA deprecation and its effects on UA crystallized just how exposed game developers are to the platforms’ unilateral actions,” Stonehill adds. “The major platforms seem to be less central to developers’ success than they used to be, even though they’re still taking a lot: the storefronts don’t play a big role in app discovery anymore, privacy policies have made it much harder to acquire users, and platforms have increasingly favored their own advertising businesses. In the midst of all this, developers have started to question why they’re paying that 30%”
As we reported earlier this week, the trial exposed Google for paying off companies like Riot and Samsung to stop them building and launching their own app stores. Google also offered Epic $147m to bring Fortnite to the Google Play store to stop the ‘contagion’ of developers releasing their own game launchers through browsers.
Google even considered buying Epic Games in order to put Fortnite on Google Play and make it a key part of the Android games ecosystem, and was also revealed to have offered sweetheart deals to selected partners to reduce its 30% cut from in-app purchases. Spotify was revealed to be paying nothing, and Google offered Netflix a deal to pay just 10%, for example.
There’s more to come for Google. The judge presiding over the case has also voiced serious concerns over the Google’s apparent destruction of evidence – on multiple occasions Google staff were caught turning off their chat history when discussing how to deal with competitors. The Verge reports that Judge Donato said evidence of Google “intentionally suppressing relevant evidence” was “serious and disturbing”, and that a further investigation into all that likely to follow too.
