Epic Games, amid an ongoing legal tussle with Apple, has declared an enticing alternative to its upcoming iPhone store in the European Union by 2024. It plans to charge a mere 12% commission on app sales, a competitive challenge to Apple’s cutthroat standard of 30%.
This decision is not only a significant gambit in their legal war with Apple over alleged monopolistic practices but also a strong move that could change the dynamics of the app distribution market. With this lower rate, Epic Games hopes to attract developers and break the Apple hegemony by promoting a more equitable revenue-sharing model.
The 12% commission rate Epic Games plans to levy is consistent with that used for Windows and Mac devices. Interestingly, they will not charge any fee for the initial six months, allowing developers to pocket all profits. This move signifies their commitment to creating a fair and favorable platform for all developers, irrespective of their size!
However, Epic Game Store’s offerings do carry some additional costs. Apple’s revised EU commercial norms ask for 0.50 euros Core Technology Fee (CTF) for each “first annual” installation post a million installations. Besides this, Apple’s updated commercial rules mandate a commission ranging between 10-17%. These charges combined significantly crank up costs for games sold via Epic Game Store.
CEO of Epic Games, Tim Sweeney, sounded off against Apple’s revised fees and regulations, labeling it a “sly act of Malicious Compliance”. Nevertheless, he pledged to persist with the legal actions against Apple, condemning them for legal contraventions in preparing for the Epic Games Store launch.
Developers distributing free apps through the Epic Games Store, however, score a financial leeway as they are exempt from any payments. Also, those featuring in-app purchases have the flexibility to select between Epic’s payment processing system, enforce an 88/12 revenue split, or choose an independent payment processor to preserve all gains. Now that’s epic!
The much-anticipated Epic Games Store’s debut for iPhone is scheduled to happen only in the European Union sometime in 2024, leaving the US and other countries devoid of the service for a while.
