Epic Games has been against and arguing on not paying Apple a 30% commission to distribute apps on iOS devices, however, court filings reveal that Epic itself used to charge much higher fees.
When Epic agreed to distribute games from other developers back in the 1990s, the company collected a 60% commission. According to the documents submitted by Apple, Epic Games CEO Tim Sweeney said that charging 60% fees at that time was a fairly favorable royalty since many distributors were charging 70% commissions.
Apple submits documents revealing that Epic Games charged a much higher fee early on
Apple pointed out in its filings about Epic’s own high fees that it charged are evidence that deals negotiated prior to the App Store were much inferior to the 30% commission rate it is charging today. Apple also informed the court about the reduced commission fees of 15% charged for small developers is also active now.
Before platforms like App Store existed, Tim Sweeney commented that it was “so daunting” to sell games through brick and mortar locations.
See, you put a huge amount of effort into developing a program. If you have to release it, then that is basically doubling the effect, because of all the polish and documentation that is needed. And unless you are going to make serious money from that, then it is not worth it.
Apple says that it introduced a “frictionless marketing, distribution, and transaction system” for both users and developers and upended the status quo. The company claimed that its model revolutionized payment for developers. The company also pointed to the fact that Sweeney is a fan of Apple’s privacy practices. Sweeney said that he “found Apple’s approach to privacy superior to Google’s approach to customer privacy and customer data” and that the company has “done a great job.”
The court filings also reveal why Epic Games wants to lower the App Store fees, it is not generating money from the Epic Games Store. In 2019, Epic lost around $181 million and was expected to lose $273 million in 2020. Epic Games also committed $444 million in minimum guarantees to developers, however, only made $401 million. Epic is projected to lose $139 million in 2021, but Sweeney says that it is an investment into growing the business.
— Tim Sweeney (@TimSweeneyEpic) April 10, 2021
In earlier news, Epic Games’ antitrust lawsuit against Apple filed in Australia came to its conclusion. The Australian judge ruled that the case will be temporarily suspended as both the companies prepare for their ongoing lawsuit in the United States. The judge also said that Epic is required to file a lawsuit in California alleging violations of Australian Consumer Law. If it passes, the matter will be looked into in Australia as well.
Apple also claimed earlier this month that Epic’s lawsuit was planned months in advance so that Fortnite could gain attention. The project was labeled as “Project Liberty”. The latest court filings show that the plan was made at least two years before Epic started to target Apple’s App Tracking Transparency feature.