Rival app stores. New mobile ecosystems – and the main players in a battle that has been raging for four years remain the same.
Epic’s fight against Apple’s app store practices has found a beachhead in Europe, where new laws have redrawn the competitive landscape. The same concerns about app store creation, in-app payments and commissions have been raised in the US – and Apple was able to block Epic’s launch of an app store in those countries – but the fight is already actively waged on the continent, where Epic just launched a mobile app store.
The new store will offer gamers a whole host of titles, including Fortnite. Fortnite in particular is a warning shot for Apple as it returns to the tech giant’s iOS-based hardware. Fortnite’s ambitions include attracting 100 million new installs on mobile devices with the launch of the rival app store.
We find that there is a competitive issue here related to the actual mechanics of downloading the offers to iPhones (and also Android devices).
In its post announcing the launch of the Epic Games Store, Epic criticized Apple and also Google, claiming: “We are launching on iOS devices in the European Union thanks to the Digital Markets Act, but Apple continues to block all other iOS users outside of Europe from accessing Fortnite and the Epic Games Store for iOS. Currently, the Epic Games Store installation process on iOS and Android is lengthy because Apple and Google deliberately introduce substandard installation experiences that involve multiple steps, confusing device settings, and scare screens.”
Epic continued: “We continue to fight in court and work with regulators around the world to remove the anti-competitive conditions that Apple and Google impose on developers and consumers so we can build a better store for everyone.”
The payment angle
As for the economics of the model, Epic announced a payment strategy in July: when players transact within the Epic ecosystem and its App Store, “all developers would receive great terms: a 12% store fee for payments we process and 0% for third-party payments.” As has been widely reported, Apple receives up to 30% of revenue when consumers download and use these apps. We note that Epic’s fee structure and its alternative App Store help cement an ecosystem within the Apple/Google hardware environment.
The path to this is paved by the EU’s Digital Markets Act. It requires companies like Apple to grant other companies – including competitors – expanded access to their installed user base. In the case of Apple, the technology giant must accept various app stores and allow them to be downloaded onto European consumers’ devices.
The Digital Markets Act itself requires so-called gatekeeper big tech companies to “allow third parties to interact with the gatekeeper’s services in certain situations” and “grant their business customers access to the data they generate when using the gatekeeper’s platform”. In addition, they must “allow their business customers to promote their offering and conclude contracts with their customers outside the gatekeeper’s platform”.
The developments in Europe may not be indicative of what’s happening in the US, or of any fundamental changes to app store policies. But the company has allowed app makers to add payment buttons that take them to other websites to enter their payment information. And as we’ve reported here, the company is now allowing apps and developers to use its contactless NFC technology to enable in-store payments. Little by little, the structures of mobile commerce, gaming, app developers and commissions are changing.
