By Chand Bellur
August 16, 2020 at 4:01 p.m. PT
- Apple recently banned Fortnight from the App Store due to its violation of in-app purchase rules.
- The App Store won’t allow cloud-based gaming platforms, such as Google’s Stadia and Microsoft’s xCloud.
- In 2018, American consumers spent almost $15 billion on gaming apps.
iOS Currently Most Popular Gaming Platform
If you build it, they will come. In this case, Apple created a smartphone with industry-leading performance, and developers delivered the games.
As it stands, the iPhone is the most popular gaming device on the market. It eclipses Xbox and PlayStation in terms of users. Of course, the iPhone has an advantage in being an almost-essential device, but virtually every iPhone model costs more than an Xbox or PlayStation console.
Looking at the most popular iOS games, however, it’s clear that the platform is for casual gamers. Candy Crush is the most popular iPhone game, followed by Subway Surfers and Fruit Ninja. These are cute games for people who aren’t into the intensity of console or desktop games.
Apple’s Assault on Cloud-Based Gaming
Market hegemony presents a massive opportunity for Apple to step up their game. Competitors like Google and Microsoft can offer a desktop gaming experience via cloud-based technology. This distributed architecture turns the smartphone into a thin client, while a server does the heavy lifting. Apple has nothing like this. Even worse, they’re actively preventing their users from enjoying this experience by preventing App Store approval of Stadia and xCloud.
Apple’s strategy is about preserving App Store profitability. Cloud-based gaming either works on a subscription model (xCloud) or as an embedded app store (Stadia). Neither of these models are profitable for Apple. In fact, they undermine both Apple Arcade and the sale of individual apps by small game developers.
The Cupertino company will only approve these platforms if they sell individual games as apps. Embedded app stores and gaming subscription services, except for Apple Arcade, are not permitted in the App Store.
Apple claims that consumers are at a disadvantage with embedded app stores and game subscriptions. Both users and Apple can’t review individual games embedded within apps. Microsoft likens xCloud to Netflix, which faces little scrutiny from Apple. In fact, Apple only takes 15% of Netflix revenues, while most other vendors are subject to a 30% cut. There are also apps selling interactive content, embedded within the application. Microsoft contends that Apple is capricious, allowing less threatening developers to sell interactive content within an app.
Google’s Stadia faces a much deeper issue. The product features an embedded app store, which clearly violates App Store policies. Instead of a subscription-based service, Stadia is a portal where users purchase cloud-based games a la carte. Although this violates policy, Apple’s rejection of Stadia could cause gamers to defect to Android.
App Store Removes the Most Popular Game in the World
Apple’s desire for App Store profitability seems to undermine user freedom. Recently, the Cupertino tech giant removed Fortnite, the world’s most popular game, as the company sold in-app credits directly to the consumer, bypassing Apple’s 30% cut.
Apple has a right to make money; however, the App Store is a monopoly. iOS and iPadOS users have no choice but to purchase and install apps from the company store. This is unique to the Apple ecosystem. Android users can install apps over the web, as can Windows and even macOS users. Apple claims their walled garden protects consumers; however, macOS users are free to install apps over the Internet (for now, and with many scary warnings.)
Apple’s Gaming Manouvers Will Lose Customers
Apple has done much to build brand loyalty. Their devices, designed and manufactured with exceptional quality, enjoy tremendous popularity among consumers. They support devices with updates for four or more years, whereas many competitors end support after 18 months. For the most part, their software “just works”; however, the company realized higher quality under Steve Jobs’ leadership.
There are also many aspects of Apple’s ecosystem that are unappealing. They neglected the Mac for years, creating some of the worst devices with crash-prone Fusion drives and keyboards that broke easily and cost as much as a brand new Windows notebook to fix. Anti-competitive practices in the App Store now limit user choice to a shocking extent. iOS and iPadOS users can no longer install the most popular game in the world. Apple has actively blocked a “killer app” for the sake of App Store profitability. Blocking cloud-based games withholds the best mobile gaming experience from Apple customers.
Gaming is one of the biggest industries on the planet. Apple’s recent moves may see once-loyal iPhone users defect to Android. After all, with cloud-based gaming, Android now has the best gaming experience. They can also install Fortnite, although only through the web, as Google Play also banned the app.
As we approach the end of this week, Apple’s future looks less bright. Banning the most popular game in the world is counterproductive. The blowback will be worse than capitulating to Epic Games’ reasonable demands.
A growing number of third-party developers are challenging the App Store monopoly. Congress is getting involved. Amazingly, Apple can get away with this, especially given what happened to Microsoft in the 90s, for simply bundling Internet Explorer with Windows.
The political will to reign in anti-competitive behavior has weakened. However, Apple’s bold and visible monopolistic practices may see action to open up anti-competitive marketplaces, such as the App Store.