Apple v Epic

Epic, the developer of Fortnite, has decided to take on Apple over the fees charged to be part of the App Store.

Currently, Apple takes a 30% commission on all app purchases and in-game purchases. However, they recently announced that they would reduce fees to 15% for developers who generate less than $1 million in net annual sales. This clearly will not help Epic.

Apple is estimated to have made more than $360 million from Fortnite alone in the last three years.

The app industry is now a huge industry, with only two major players - Apple and Google. The average American spends 3.7 hours per day watching live TV, but 4 hours per day using their phone.

Anti-trust pressure is coming for Apple from the EU and the US - defending 30% commissions seems unsustainable. Microsoft spent years fighting a debilitating and long-running US anti-trust case back in the late 90s.

Apple may want to consider other options and sweeteners that do not fall foul of anti-trust law - for example, securing new games or apps exclusively for a limited period and working more with app developers to promote apps. Apple is a creative company - hanging onto 30% is not an option.

Apple makes the majority of its revenue from actual devices; they are not cheap. Crucially, Apple's customers are not cheap either - they are far more likely to purchase apps and spend more on in-app purchases too.

Apple has created an amazing ecosystem with the App Store, and many developers owe everything to Apple because of it. However, it is time to expand the pie by reducing commissions and working actively with developers to bring new games and apps to a hungry audience.