Every major digital distributor out there takes a 30% distribution fee. It’s how the business has been running for years. It’s how it operates at Google, on Steam, and iTunes. Whichever way it goes, you’re paying someone 30% to host or deliver your product. Well, Epic Games has decided that they don’t want to pay those fees anymore by restricting payments to being direct between them and the consumer, and Apple isn’t having any of it so they decided to remove Fortnite from the iTunes App Store.
On August 13th, 2020, there was a post published on the Epic Games website titled #FreeFortnite, in a bid to get Apple to reduce or remove their 30% distribution fees.
In the post they explain…
“Apple has blocked Fortnite from the App Store, removing everyone’s ability to install and update the game on iOS devices, while instructing Epic to “remove the ‘Epic direct payment’ feature”. Apple is keeping prices high so they can collect 30% of your payments, and is blocking Fortnite in order to prevent Epic from passing on the savings from direct payments to you! Join the fight against @AppStore on social media with #FreeFortnite
“Epic has taken legal action to end Apple’s anti-competitive restrictions on mobile device marketplaces.“
They also link to the Apple complaint hosted on the Unreal Engine website.
Epic had made similar protests in the past with Google Play and Steam, but this time they managed to get their little stunt to trend.
They even made a YouTube video about it.
What they don’t explain is that distribution fees from major digital platforms has always been 30%.
ExtremeTech wrote about Epic ditching the Google Play store back in 2017 for the exact same reasons they’ve been kicked off of the iTunes App Store, writing…
“Avoiding Google Play distribution means Epic gets to keep all of the in-app purchase revenue rather than paying 30 percent of it to Google. Most developers just deal with that because having your title in the Play Store makes it easier to reach a large audience. Epic probably thinks that having the most popular game in the world gives it enough reach to go its own way.”
Epic has been attempting to play up to the notion that this is a consumer rights issue as opposed to a cost reduction issue.
The reality is that they want to pocket the 30% that would have been paid to distributors for themselves, all while utilizing the distributors’ platforms to access their audiences.
The thing is, if Apple does waive or reduce the distribution fees for Fortnite, every other mobile app out there is going to want their distribution fees waived, too. Essentially Apple would be paying infrastructure fees to host software they’re not making any money from.
This isn’t a “woe is Apple” or “woe is Epic” situation, it’s simply two corporations that want to retain as much of a percentage of revenue as possible without paying anyone else.
The fact that there are a bunch of people on Twitter cheering on Epic as some kind of champion is both sick and disappointing.
Epic’s angle to players: they offered a discount, Apple wants to screw players over for 30% extra instead, so Apple kicked Fortnite off of iOS. Combined with Apple’s stance on Microsoft’s xCloud, message will be clear: if you care about playing or making games, forget iOS
— Steve Troughton-Smith (@stroughtonsmith) August 13, 2020
On the upside, there are a few people who still have a smidgen of common sense about them and are rightfully pointing out that the 30% cut that so many clueless plebeians are attacking Apple for is actually an industry standard.
The “tax” isn’t bullshit at all…. every market place charges the standard 30%. Epic signed that same deal… Apple has a platform of millions of people and these companies are so big that the 30% from Epic is like a quarter tossed to a peasant. It doesnt matter.
— Derp Words (@GroupFights) August 13, 2020
What most people on Twitter fail to realize is that retailers take a 25% cut as a standard fee, and that’s because that other 5% on the publisher’s end is paid out in shipping and manufacturing costs.
Digital distribution doesn’t have any physical fees, but it does require hosting and delivery from the distributor’s end, so they make up for the 5% in shipping and manufacturing by including it in the 25% of the standard distribution costs, thus bringing the tally to 30%.
This is how it’s been in the age of digital distribution. Epic (and others such as Ubisoft) trying to disrupt the system would simply result in distributors charging subscription fees like how Sony, Nintendo and Microsoft charge for accessing multiplayer functionality. At that point the costs would be levied at the feet of the consumer instead of the corporation, which wouldn’t be a problem for companies like Epic since not only would they be making money from microtransactions but also reducing the operating costs, too.
(Thanks for the news tip Happening)
