Google has publicly rebuffed game developer Epic over its reported attempt to distribute its popular battle royale hit Fortnite through the Play Store without paying the company’s standard 30 percent fee.
In a statement to The Verge, Google says the Android platform is dependent on the existing Play Store terms because that is how the company is able to reinvest in its platform to help it grow and to provide ample security measures.
“Android enables multiple app stores and choices for developers to distribute apps. Google Play has a business model and billing policy that allow us to invest in our platform and tools to help developers build successful businesses while keeping users safe,” a Google spokesperson tells The Verge. “We welcome any developer that recognizes the value of Google Play and expect them to participate under the same terms as other developers.”
News of Epic’s intent to publish Fortnite on the Play Store after distributing it independently since its August 2018 launch on Android first broke late yesterday. 9to5Google reported that Epic was planning to submit the game and ask for a special exemption that would allow it to bypass the 30 percent cut on all in-app transactions. Fortnite, as a free-to-play game, makes all of its money through such transactions, including for cosmetic items and its seasonal battle pass subscription service.
Epic has given an official statement to The Verge clarifying its stance:
Epic doesn’t seek a special exception for ourselves; rather we expect to see a general change to smartphone industry practices in this regard.
We have asked that Google not enforce its publicly stated expectation that products distributed through Google Play use Google’s payment service for in-app purchase. We believe this form of tying of a mandatory payment service with a 30% fee is illegal in the case of a distribution platform with over 50% market share.
We note that Google Play’s Developer Distribution Agreement (https://play.google.com/about/developer-distribution-agreement.html) does not require developers use Google payments. It merely references a number of non-contractual documents asking developers to do so.
Further, Epic operates a major PC storefront and payment service and we do not force developers using our store to use our payment ecosystem.
Google doesn’t appear to agree. The company noted to The Verge that Epic has not asked for such an exemption from Apple; Fortnite has been available through the iOS App Store since the spring of last year where Epic presumably pays the company’s standard 30 percent cut. Google also cites the Play Store’s ability to promote apps and drive discovery, provide security and hosting, and provide technical testing and analytics tools as all reasons why its 30 percent cut is necessary.
Epic CEO Tim Sweeney has long maintained, however, that app stores like Apple’s and Google’s effectively have monopolies and that the 30 percent cut is now grossly out of proportion with the cost of services the two companies provide. (Both Apple and Google take only 15 percent if an app maker is primarily selling a subscription service, as Netflix and Spotify do.) In late 2018, Epic launched its own PC game store with a 88 / 12 revenue split as an attempt to lead the industry toward what Sweeney sees as a more fair arrangement between platform holders and app and game makers.
“We believe this form of tying of a mandatory payment service with a 30% fee is illegal.”
The company also recently rebranded its Android Fortnite Installer application as the Epic Games App, which Epic intends to use as a way to distribute versions of its games on Android without going through the Play Store. It is unclear why Epic is demanding an exemption for Fortnite at this point in time.
“It’s time for change. In the early days of Steam, 70 / 30 [percent cut] was a revolutionary split because you could compare it to 70 / 30 in favor of the retailer,” Sweeney told The Verge in an interview during the Game Developers Conference in March of last year. But now, given how large app stores have become and how little companies like Apple and Google have to invest to continue maintaining them, Sweeney says it’s not a fair deal to pay 30 percent on all transactions just to partake in what he sees as monopolistic platforms.
“Visa and Mastercard process transactions for 3 percent on average,” he said. “Apple, Google, and Android manufacturers make vast, vast profits from the sale of their devices and do not in any way justify the 30 percent cut.”