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As mobile game and app developers gasp for air under a player-gouging 30% duopoly-tax on nearly all mobile game revenue worldwide, Epic Games has emerged as the de facto leader of the gaming community in the fight for open computing on mobile.
That said, Epic’s $5B+ in annual revenue, blockbuster titles, and extensive games marketplace makes them an unlikely “little guy” in this fight, as Epic’s needs don’t always represent the needs of most game companies. Epic’s outsized voice and the reluctance of other studios to speak up publicly for fear of repercussions from app stores leaves us wondering: Is what Epic wants for app stores what other game and app developers actually want?
FastSpring privately asked small and large game studios alike what they wanted, and here is what they said they wanted to see.
Background: The Slow Death of Open Computing, and the 30% App Tax
Computing has never been less open than it is today. Historically, video game and software developers have relied on open computing with PC and Mac platforms because it has enabled developers to release titles as they see fit, have a direct relationship with their players, and choose payment solutions that work for them. There were no gatekeepers — just a computer, a player, and a game. But the world has changed.
Now, over half of people’s computing screen time is spent on mobile devices — a share that’s growing — and over 99% of global mobile OS market share is split between just Apple and Google. Thanks to this domination on mobile market share and related tight controls on game distribution and ecommerce, the world of open computing is in peril like never before, imposing a great cost to consumers as well as game and app developers.
Case in point, both Google and Apple’s app stores enforce a 30% fee on sales of games and in-game items distributed through their platforms. Apple controls 100% of all game distribution and ecommerce on iOS devices, while Google allows OEM marketplace apps and sideloading of mobile games, but severely restricts in-game third-party payments for games distributed through Google Play.
Google Play does offer a third-party payment integration option for a limited number of game developers through their “user choice billing” pilot; however, “user choice billing” comes with pricey evergreen marketplace fees of 26% even if you bring your own payment provider and take on all of the risk and compliance obligations of payments.
The net effect of Apple and Google’s control over such a huge share of global computing is a default 30% tax for mobile games and apps, which ends up paid by players, is held back from game developers, and stifles open computing and ecommerce. Due to this stranglehold on open computing, game developers large and small believe something has to change.
What Do Game Developers Who Aren’t Epic Want?
The team here at FastSpring embarked on a months-long quest to interview game studios both small and large about what they wanted to see happen with mobile app store policies. While not everyone agreed on every point, here are the top three things they told us they wanted:
1. iOS to support sideloading games without scare screens.
iOS has long restricted “sideloading” games and apps — in which the app is downloaded outside the App Store from the developer’s website or a different marketplace. Sideloading allows freedom for players to buy and developers to sell and distribute games, in any way the developer sees fit and the player agrees to go along with. Android does allow sideloading games and apps, but only with cumbersome warnings known as “scare screens” that warn mobile phone owners of the dangers of “downloading software off the web.” Many of the game developers we spoke with felt Apple should support sideloading and that Apple and Google should not use the over-the-top self-serving scare screens that disparage software distribution outside of their own app stores.
2. Allow unlimited “steering” and embedded payments from third-party payment platforms.
Both Google and Apple place severe restrictions on the ability to surface prices and purchase options that are supported by third-party payment providers outside the app stores. This means the same purchase could be available for a better price for the player, but game developers aren’t allowed to steer their players to those options, link to other purchase experiences, or embed third-party purchase experiences inside their games. While many game developers we spoke with found great value in transactions through app stores, the overwhelming preference was to give players and developers the choice by doing away with steering and embedded payment restrictions.
3. 0% fee for steering and embedded payments.
Allowing steering and embedded payments is one thing, but as we’ve seen with Google’s “user choice billing” pilot, the ability to do something and the financial incentive to do it are two different things. With “user choice billing” featuring a still-massive 26% fee for payments made through third-party payment providers, combined with the fees those providers charge, this equates to a $0 benefit for most game developers. The game developers we interviewed felt 0% was a fair cut for transactions outside the app store; however, many did seem supportive of some sort of financial reward for the app stores helping to drive the download and adoption of games. Of course, a 26% cut of every third-party transaction forever is a far cry from what game developers thought was fair.
What’s Next
While there are other nuanced wants around how app stores operate that game developers would like to see, these three wants constitute the root of what developers feel would drive true change in open computing for mobile.
In the meantime, the world will need to wait for court cases such as Epic vs. Google and Epic vs. Apple and regulations like the Digital Markets Act in the EU to play out in order to see what the future of open computing and commerce will look like. For the game developers we spoke with, the answer is clear: They want choices for themselves, better prices for their players, and a more open digital world for all. Open > Closed.
About FastSpring
FastSpring powers global direct-to-consumer (D2C) payments for game studios and publishers. As a Merchant of Record, FastSpring provides a fully managed payment solution including checkout, fraud mitigation, and 100% automated sales tax and VAT compliance. With FastSpring, gaming businesses can level up quickly in the global market and do what they do best, build great games. Founded in 2005, FastSpring is a privately owned company headquartered in California with offices in the UK, Netherlands, and Canada. For more information, please visit https://fastspring.com/solutions/gaming.
