Apple To Reduce App Store Revenue Cut, But Not For Fortnite
Fortnite developer Epic Games and tech company Apple have spent the better part of the last few months in a public feud, with much of the squabbling boiling down to Apple’s 30% revenue cut on the iOS App Store. It all began when Fortnite began offering V-buck purchases directly from the game, effectively circumventing Apple’s payment system and cutting them out of the profits. This prompted Apple to ban Fortnite from the App Store, kicking off a series of mocking reprisals inside the battle royale game, including an infamous parody video called Nineteen-Eighty-Fortnite.
After several not-so-subtle jabs from Epic and even some high-profile litigation, it looks like Apple has now decided to lower its cut on the App Store. However, it appears the likes of Fortnite aren’t invited to this price-discounted party. As reported by The Verge, Apple has announced a new marketplace incentive called the Small Business Program, allowing developers who earn under $1 million per year to enjoy a lower 15% cut off the top of their earnings. According to a statement from Apple, this amount cuts the standard 30% cut in half for the “vast majority” of iOS app-makers and would almost exclusively benefit small and indie developers.
While Fortnite is currently banned from sale on the App Store, the game is regularly cited as one of the most popular and top-earning free-to-play games out there, and therefore, would be far from qualifying for the new Small Business Program. One has to assume Apple had Epic’s dismissal in mind, especially as Epic Games has repeatedly called for the App Store to reduce its revenue cut since this whole ordeal began. Court documents filed by Epic in September specifically called out Apple for “unlawful restrictions” and inflicting advantageous “monopolies” on a billion mobile users.
This new Apple program marks a shift in the way the iOS platform operates, but the change won’t necessarily make a large impact on the company’s bottom line. According to estimates by app analytics firm Sensor Tower (via The New York Times), the Small Business Program might only make a 5% dent in total App Store revenue, despite the initiative encompassing around 98% of the platform’s developers. On the other hand, the top 2% of earners – such as apps like Fornite – contribute to the remaining 95%, which amounted to an estimated $50 billion in 2019, as per CNBC. These money-makers will still be charged the full 30% revenue cut when the program goes live on January 1st, 2021.
What do you think? Are you glad to see Apple make things a bit easier for smaller devs, or do you feel this program may have been launched specifically to spite Epic Games? Let us know in the comments below and be sure to follow Don’t Feed the Gamers on Twitter and Facebook to be informed of the latest gaming and entertainment news 24 hours a day! For more headlines recently featured on DFTG, check out these next few news stories:
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Phone-browsing Wikipedia in one hand and clutching his trusty controller in the other, the legendary Eric Hall spreads his wealth of knowledge as a writer for Don't Feed the Gamers. Be sure to catch his biweekly "Throwback Thursday" segment for a nostalgic look at trivia from the past.