First Fortnite, Now Fallout '76 - The "30% Standard Fee" is Under Attack

Last week Epic CEO Tim Sweeney confirmed rumors that Fortnite would not appear on Google Play, Amazon App Store, or any other app store for that matter. This isn't the first time Tim has broached this issue. One year ago this month he gave the keynote at Gamescom's Devcom and called at the Apple app store by saying, ""These app stores take 30 percent of your revenue for distribution. That's strange because Mastercard, Visa, and other companies that handle transactions take 2 percent or three percent of the revenue." At the time, so did Epic, and Apple Insider called them out on it. Regardless, Epic and everyone else had to put up with it because frankly, they didn't have a choice.

One year later, the world has been Fortnited (Fortnit?). A few weeks ago Epic made news when they said they were officially cutting their take from the Unreal store to 12%. That would have been great itself, but they went a step further and made it retroactive to 2014. Clearly that is generous, but now we see one of the reasons why. Epic is skipping the Android stores, because they can. Fortnite is generating 2 million dollars a day on iOS, that means they are losing $18,000,000 a month to Apple. For distribution. There's nothing they can do about it because iOS is a closed platform and those are the rules. Apple's not marketing the game (no, being featured isn't marketing), they aren't helping Epic or any other company with their live ops cost. Companies simply have to give up 30% because that's the cost of playing with Apple. $18 million a month isn't much to Apple, who's currently valued at over 1 trillion dollars, but $18 million a month is a big deal to Epic and roughly every other developer and publisher in the world. Not true on Android.

With the Android system being open, you don't have to be on Google Play, or Amazon, or anyone else for that matter. Until Fortnite came along, the reason you had to be there was because that's where you get found by buyers. Fortnite has transcended all of that though, the game has a large enough following and name recognition that they can now skip those stores and go directly to consumers.

It came to light last week that Steam user numbers are actually down this year, going back to mid January. Want to guess why? Fortnite. Epic doesn't distribute the game through Steam, so as player numbers increase for Fortnite, those are people who aren't logging into Steam to play a game. Epic's not the first to skip Steam. Blizzard does it, EA does it, others do this as well. What we are starting to see is a larger movement away from giving up that 30% by companies that don't have to put up with it. Now Bethesda is jumping in.

The Beta FAQ for Fallout '76 states, "Pre-ordering Fallout 76 is the only way to get access to the B.E.T.A. Visit fallout.bethesda.net/buy-now to pre-order the game from your preferred participating retailer or digital platform". Bethesda is stepping up to say they aren't going to share 30% either. Is this going to snowball into the downfall of Steam?

Hell no.

But it's a start. During the peak of the casual game boom in the early 2000s, BigFish and the other major portals would keep 70% of the revenue from your game AND each portal would want an exclusive period. Now it sounds preposterous, but back then developers and publishers lined up for the opportunity because they didn't have to go to retail and that was where the customers were. Once Apple jumped in and *only* charged 30% it set off a chain reaction.

Nothing is going to happen overnight, but we are clearly seeing a changing of the tide. If Epic in particular uses this as the launching point for a new publishing/distribution store that charges a much lower fee AND has access to all the Fortnite players of the world....

Jay founded The Powell Group in 2010 and spent the 12 years before that as an agent, developer and publisher. In addition to running his firm, he co-hosts "Indie Game Business" on Twitch which seeks to educate developers on the business, marketing, and licensing side of the industry.  If you can't find him in either of those two places, try their Discord server (or his local craft brewery).