Epic Games Store GM says Google deal marks a "meaningful reset" for mobile market

• “Would we like it to be 12% or 10%? Of course. But where we land is where we land," says Epic Games Store GM on that Google deal.
• Steve Allison says AI will be a "revelation" for game discovery.
• Epic plans to make a games-focused marketplace that will open up for self-publishing on iOS and Android from August.

Epic Games’ crusade against the App Store and Google Play looks to be coming to an end.

After years of expensive legal battles - which also cost it lost revenue in Fortnite’s removal from these key marketplaces back in 2020 - Epic has its US App Store win and has just reached a global settlement with Google.

That deal - subject to judge approval in the US market - sees Google create a 20% store fee and 5% charge for its optional payment services. There are also reduced fees for subscriptions, while publishers are free to link to their own stores.

So was the high cost for an effective 5% cut for the industry - and a better deal for Epic when considering it uses its own payment services - worth the fight?

Speaking to PocketGamer.biz at GDC, Epic Games Store GM Steve Allison calls it a “meaningful reset” and that developers now have a tool kit available to keep more of their revenue.

“Is it worth it? It's not for me to answer. It's for a developer [to answer]," he states. "I think that those that want to lean in and get that 20% and maybe in some cases, 15%, I would say that's worth it.”

He adds: “I think the opportunity is about digging in and if margin is important to your business, you have options now.”

Setting out its battle nearly six years ago, Allison says the company didn’t know where it would eventually settle, but it wanted to make a “meaningful change”. Allison believes the Google deal ultimately achieved that aim as it changed the standard rate from 30% to 20%

“Would we like it to be 12% or 10%? Of course,” he says. “But where we land is where we land.”

He adds: “It's good for the industry and the industry needs it right now. The headwinds are real and strong and we just had no view on how long it would take or if we could get to what we were pushing for.

"So to get there and also have some of the concessions on alternative app stores, scare screens and the ability to use alternative payments, those felt like the key topics.”

Alternative opportunities

With alternative stores now able to compete with Google Play on a more level playing field, Epic now has the challenge of breaking user habits and convincing consumers to use its marketplace over Google’s.

Epic has already faced the same challenge on PC with Steam, where it has yet to outmuscle Valve’s market-leading store despite significant investment. Still, last year player spending on third-party PC games grew 57% to $400 million.

The Fortnite developer is bullish on its chances on mobile and plans to open up self-publishing for iOS and Android from August. The company has already had discussions with “major” companies to join its marketplace, says Allison.

The plan is to build a multi-platform, games-focused store - though it could still open up to gaming-related utility, developer and creator apps.

“We totally believe there's a market for that,” Allison tells us. “We've tested it pretty extensively before we made the commitment to do it. We know that there's a cohort of players, it's not a small footprint of players, and they're super interested in that."

He adds: “We have a ways to go to get there. The Google settlement helps us on Android. We have a lot of friction with iOS still, so we’ve got to get through all that before we really get to see the other side of it, but there's a lot of encouraging signs on Android.

“...I don’t expect to see iOS have a high take rate because of the friction like CTF fees and the CTC fees in Japan. But on Android I expect we’ll start to see a lot of folks come in that we didn’t expect and we’re also going to see movement from the majors we’ve been talking to.”

Discovery approach

PocketGamer.biz has previously investigated the different approaches stores like the App Store, Google and Steam have to game discovery.

Google favours an ads-focused approach, while Apple combines editorial with ad placements. Valve, meanwhile, doesn’t sell promotional space on its store, but instead serves games to users based on their interests, preferences and other friend-based and regional factors.

We ask how Epic will tackle this issue and if it will focus on an editorial approach or be more algorithm-based. Allison says the company believes a lot in editorial - it doesn’t just want to leave things to an algorithm. However, AI could shake things up.

“I think AI is going to be a revelation. …In terms of helping us demystify and understand that there are things we would never think of that actually make discovery more powerful, we’re working on that.

“I'm hopeful that we have some breakthroughs there. We are also not going to have a hundred thousand, two hundred thousand titles. Google has millions of apps, we'll have thousands, but it'll be a couple years before we have thousands.

“So discovery will be, just because of that, better. It will put more pressure on discovery as people start to bring more stuff, but hopefully we’ve made some good progress."