A new court document sheds light on how Fortnite did not really manage to make a lot from Apple's platform to begin with. According to the source, Epic's trial against Apple revealed that iOS was one of the smallest platforms for Epic Games revenue. This is surprising when you look at the history between both companies and the backlash Epic Games had to begin with.
Fortnite Relying on iOS for Just 7% of Its Total Revenue Does Not Make Sense From a Legal Point of View.
This is what the report revealed.
Court documents reveal that PlayStation 4 generated 46.8% of Fortnite’s total revenues from March 2018 through July 2020, while Xbox One, the second-highest platform, generated 27.5%. iOS ranked fifth, with just 7% of total revenue. The remaining 18.7% would have been split between Android, Nintendo Switch, and PCs.
The documentations clearly show how the iOS revenues for Fortnite in 2020 were projected to be around 5.8% of all the earnings, which is small when comparing it with 24% earning for Xbox One and almost 40% for PlayStation 4.
iOS was always the lowest or second-lowest if Android was listed, correct?’ lawyers asked Joe Babcock, Epic’s CFO until March 2020, in a separate deposition. The answer was yes.
According to Richard Schmalensee, one of the economic experts for Apple, the App Store business model cannot be considered a leader in the digital gaming segment.
Richard Schmalensee, one of Apple’s economics experts, believes that game transactions face different competitive conditions than transactions for apps in other categories. The expert also thinks that the App Store’s business model doesn’t make it a leader in the digital gaming segment, which is something Apple has said in the past.
This further reinforced the fact that Epic Games' earnings rely more on consoles than on mobile platforms.
“They also showed that most App Store users also have access to at least one device from another platform, suggesting that they can always access other apps that are not available on iOS.”
Epic Games has now taken some help from a few academics from Harvard, Stanford, and UCL to testify against Apple. Revealing some more interesting details.
iOS and Android users make sunk cost investments in hardware, software, and learning for their respective ecosystems. A decision to switch OSs is a decision to move ecosystems, meaning consumers would lose the value of these investments and have to make new ones. These costs reduce consumers’ incentive to switch,” said Dr. David Evans from University College London.
Epic vs. Apple trial is scheduled for next week, and considering how the situation is unfolding, there will be a lot that will be uncovered. We cannot wait to hear all the interesting details that come forward.
