On May 3, Epic Games vs. Apple trial commenced and the financial documents filed by Epic Games reveal that Fortnite was the most lucrative app for the developer. In the first two years, the mobile gaming app generated $9 billion in revenue. Although the document does not specifically mention how much profit Epic earned from the app, it is reported that the company earned $5.5 billion in profit in that stint.
In 2020, Epic Games began this legal battle with the Cupertino tech giant over App Store’s 30% commission rate by releasing an unauthorized update on the Fortnite iOS app with a direct payment option. Consequently, when the gaming app was removed by Apple, the developer went to court to seek permission to bring back Fortnite on App Store with an alternative payment method. Therefore, the lawsuit will decide the spectrum of Apple’s control over the iOS App Store and its IAP (in-app purchase) structure.
Epic’s financial documents reveal that Fortnite revenue declined Y-o-Y, after a successful launch
The 15 pages Epic Games financial report for the years 2018-2020 shows that Fortnite revenue saw a year-on-year decline. After earning $5 billion in 2018 and $4 billion in 2019, the game revenue was down by 25% in 2020 with $2.7 billion for the same quarter in 2019. And these figures support Apple’s argument against the developer that it started the whole legal theater to reignite Fortnite’s waning popularity. As per the Wall Street Journal, Apple said:
By early 2020, “Fortnite” was showing signs of aging, although popularity for online games can sometimes ebb and flow due to new seasons or features. The privately held company doesn’t disclose financial records but app-analytics firm Sensor Tower Inc. estimates global consumer spending within “Fortnite” on Apple devices had fallen in the first quarter of last year to $70 million from a peak of almost $180 million in the third quarter of 2018. Epic Chief Financial Officer Joe Babcock, who departed the company in early 2020, said it expected the trend to continue, according to a deposition he gave cited by Apple. Mr. Babock couldn’t be reached for comment.
During this opening statement at court, Epic Games CEO Tim Sweeney gave an unorganized testimony which we believe weakens his argument. Accusing Apple of creating a monopoly and charging an unjust 30% commission rate, he tried to belittle the software support by the iPhone maker in providing Fortnite on mobile.
The judge jumped in and noted that both consoles and iPhones have had to build a lot of tech to support a game like Fortnite. Sweeney says yes, his comparison is with their business models.
— erin griffith (@eringriffith) May 3, 2021
Sweeney also shared that his company’s gross revenue earnings in 2020 were $5.1 billion.
Sweeney says Epic employs 3200 people, has offices around the world and (this might be new info?) made $5.1bn in gross revenue in 2020.
— erin griffith (@eringriffith) May 3, 2021
Read Epic’s complete financial report here.
Read More:
1 comment