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Mobile games sector unlikely winner after lose-lose Apple vs Epic ruling

Mobile game makers, in particular, may benefit from improved margins, if customers make payments on other platforms.

Apple Inc - Mobile games sector unlikely winner after lose-lose Apple vs Epic ruling
Image credit: Tada Images / Shutterstock

Anyone following the legal battle between Apple Inc (NASDAQ:AAPL) and Fortnite owner Epic Games can be forgiven for wondering who actually won.

Everybody else in the sector is the less-than-obvious answer to that question.

Friday’s court ruling was pretty much lose-lose for Epic and Apple – with the former’s case essentially thrown out and the latter left vulnerable by judge Yvonne Gonzalez Rogers opinion that Apple and Android hold a near-duopoly in the market.

Most significantly, the judge ruled against Apple in regard to Californian anti-steering competition rules which had prevented game developers and app makers from informing iPhone and iPad users that they can make payments on external platforms.

The ruling potentially opens up a more favourable market for the games industry as a whole, especially those that focus on mobile games.

For context, Apple generated around US$67bn from its slice of App Store transactions last year as it took 15% to 30% of every payment processed in the Apple platform.

“For the first time, app developers everywhere who flog their wares on the App Store can actually link customers to external payment pages, where Apple gets no slice of the pie. The injunction will be valid as of December, with Apple making no moves to appeal the decision so far,” stock research website MyWallStreet commented in its daily blog.

“This will be a big boon for subscriber-reliant businesses such as Spotify or Netflix, but also for the many game developers who rely on in-app purchases for revenue generation.”

“Although this does not automatically mean that users will sign up via external sites, it is a big step in allowing businesses to circumvent Apple’s expensive cut, and will likely result in better profit margins for all of these companies.”

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