In 2020, Apple generated an estimated $13.5 billion dollars in gaming revenue, despite the fact it doesn't make any games or gaming consoles.
Visualizing Apple’s Rising Gaming RevenueIn 2020, Apple generated an estimated $13.5 billion dollars in gaming revenue—even though the tech giant doesn’t actually make any games or gaming consoles.
So how does Apple generate all this money from gaming? A key driver of Apple’s gaming revenue is the 30% fee it collects from all app spending, including in-app purchases, subscriptions, and premium app fees.
a majority of Apple’s App Store revenue comes from games. And because of hefty fees, Apple made more profits off of games than some of the most reputable gaming companies who designed them.
For example, in 2019, Apple generated $2 billion more in operating profit than Nintendo, Microsoft, Sony, and Activision Blizzard—combined.
Why Apple’s Dominance is a ProblemThe 30% fee is a financial burden for game developers who sell large volumes of in-app purchases. So, in an attempt to bypass Apple’s in-app payment systems, some developers have tried to redirect users to external payment platforms (a competitive tactic called envelopment).
Epic Games tried a version of this by integrating their own payment system into Fortnite. However, Apple then removed Fornite from the App Store, citing violations to the terms of their agreement. In response, Epic Games countered with a lawsuit, accusing Apple of monopolistic practices and antitrust violations.
While Apple ended up winning a majority of the court case, the tech giant was ordered to update their App Store policies, meaning Apple could no longer prohibit gaming companies from directing customers to alternative means of payment.
Man some of you are in for a rude awakening. There's an entire generation growing up on touch screens and Roblox and they will not graduate to Halo Infinite and $70 game remakes.