An Epic deal for Google?

• Epic and Google propose changes to a US injunction that would open up Google Play worldwide for alternative payments and marketplaces.
• The proposed modification would see a better revenue share for certain monetisation practices - with better deals for cosmetic items like those seen in Fortnite.
• Direct linkouts to payments within an app would see Google gain a revenue share in the first 24 hours.
• A US Judge has called for evidence and expressed surprise over the deal.

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Epic Games CEO Tim Sweeney has done a lot for the mobile games industry over the past five years.

His crusade against the App Store and Google Play has, against all odds, played a key role in carving open the walled gardens. Around the world, publishers increasingly have access to a better revenue share and greater direct-to-consumer options.

The US Epic Games vs Google case saw the latter deemed a monopoly by a US court judge.

The initial injunction, in the US only, saw Google Play cracked open much like the Apple App Store - a great win for developers and DTC platforms. But this week the story looks rather different.

A proposed modification to the settlement between Google and Epic Games will see the former take a revenue cut of between 9% and 20% globally based on the way games monetise. That includes when developers link out to alternative payment systems for transactions made within 24 hours.

Epic has got its reward for its costly court battles. For games with purchases that do not provide more than a “de minimis” gameplay advantage - such as content, levels, events or cosmetic items - they will face a maximum 9% revenue cut by Google. That’s a big win for Fortnite, built on cosmetics and a season pass.

For the rest of the mobile games industry and the more common ways titles monetise, they face a 20% cut where purchases provide “more than a de minimis gameplay advantage”. This impacts games where purchases can impact game outcomes, gameplay progress rate or player power, as well as purchases with random outcomes, like loot boxes.

Why, you have to wonder, would the end result of a years-long court battle come down to the way games are monetised? Why would a court settlement in this particular case over a monopoly come down to cosmetic items vs. timers and boosters?

It’s curious how this crusade for the greater good to take down these app store monopolies - a cornerstone of the Epic PR machine - has sparked this latest proposal.

The proposed changes effectively say the way you monetise is bad. Fortnite’s business model is good. Get on board or pay the cost.

Open platform

Commenting on the deal, Epic Games CEO Tim Sweeney said “Google has made an awesome proposal to open up Android”.

“It genuinely doubles down on Android's original vision as an open platform to streamline competing store installs globally, reduce service fees for developers on Google Play, and enable third-party in-app and web payments,” he said.

“This is a comprehensive solution, which stands in contrast to Apple’s model of blocking all competing stores and leaving payments as the only vector for competition.”

Google Android ecosystem president Sameer Samat commented: “Together with Epic Games we have filed a proposed set of changes to Android and Google Play that focus on expanding developer choice and flexibility, lowering fees, and encouraging more competition all while keeping users safe. If approved, this would resolve our litigations.”

US District Judge James Donato, who has been overseeing the case and ordered the previous injunction, appears to be confused by the new deal. They ordered an evidentiary hearing before rubber stamping it. was similarly confused by the amendment.

As the Judge noted, reported by Law360, the injunction must take the public interest into account, while there must be a material change in circumstances, fact, or law for the current settlement to be modified.

“The only changed circumstance that I can see right now is Epic and Google — two mortal enemies who pounded each other relentlessly in this courtroom for many years — are suddenly BFFs.”

"Major step backward"

Some quarters of the games industry, too, appeared to be confused by the new proposal, which is not clear cut in its wording and impact - nor its reasoning. We received commentary early on praising the deal, before the reality set in.

“Our understanding is that under the proposed settlement, Google would apply new 9% and 20% service fees even to direct-to-consumer purchases made through external web links from games distributed via Google Play, including web-store transactions within 24 hours of linking out,” Xsolla president Chris Hewish told PocketGamer.biz.

“That’s a major step backward for developers and partners like Xsolla, effectively taxing the most direct and consumer-friendly path to purchase. The varying fee levels by monetisation type add confusion and risk at a time when developers need clarity.

“This settlement doesn’t open the market; it codifies platform control at the expense of developer independence. Xsolla remains focused on helping developers adapt and preserve their ability to sell directly to their players.”

Appcharge CMO Gil Tov-Ly said while Google’s fees apply from links in the app, the revenue share from community links, email or VIP programs remains at 0%.

“What Google is structuring here is around direct link-outs and steering from within the app, where purchases made within 24 hours of that redirect may fall under the 9% or 20% categories depending on the monetisation type," he said.

"While there’s still some lack of clarity on how those categories will be enforced, it’s encouraging that this agreement opens the door to compliant link-outs and DTC flows globally – something that’s not yet possible on Android. Even in those redirected cases, 9% plus Appcharge’s fee is still a major improvement over the 30% era.”

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