Epic Games CEO criticizes app store business model, calling it “parasitic”

Epic Games CEO criticizes app store business model, calling it “parasitic”

THE Epic Games has historically had an excellent relationship with Apple. One of the main franchises of the developer, Infinity Blade, can be credited as the one that first showed the world that mobile devices like the iPhone could be a potentially excellent platform for "serious" video games, with a level similar to those found in the best consoles. For this reason, the company was stamped on several keynotes by Ma to demonstrate its latest creations and impress the public.

The friendship, however, may have gone a little sour after a speech by the CEO and co-founder of Epic Games, Tim Sweeney, in a lecture that was part of the Devcom conference (in Cologne, Germany). I say this because, although the executive criticized the app stores generally, it became very clear that the focus of their dissatisfaction on App Store it is precisely the store with which the developer has the most links.

Tim Sweeney of Epic GamesTim Sweeney, CEO of Epic Games

Basically, Sweeney's critique has to do with the business model predominant in app stores like App Store and Google Play, where 30% of all profit from app sales goes to the respective company that owns the store. Although Apple is making efforts to offer alternatives to this model and to attract more developers, the CEO said that the "unfair" system and the share of revenue captured by companies like Apple and Google is a "parasitic loss".

The system is very unfair at that moment. These app stores take 30% of their revenue for distribution, which is strange because MasterCard, Visa and other companies responsible for financial transactions keep 2% or 3% of their revenue. So they are pocketing a huge profit from their work and are not doing much else to help us.

In addition, Sweeney said that the model is basically unsustainable these days, when app production has become such a multimillion dollar business that it is impossible to compete with industry giants.

There was a time when there were only a few launches every week, so there was a good chance that you would be near the top of the bestseller list; today, however, that list dominated by a few games with marketing budgets in the $ 100 million range. There is no space for ordinary developers to compete. So what they have to do to spend money on user acquisition via Facebook, Twitter, Google companies are paying something around $ 3 per installation to get users to install a free game, and that is really horrible.

Finally, the CEO stated to the public that developers “cannot accept this as the status quo"And" everyone should be angry about this so that they are constantly looking for other solutions and better ways to reach players ".

As much as Sweeney's critics are well-founded and worthy of attention, it is impossible not to notice a curious fact: Epic Games also has a digital store to call its own, the Unreal Engine Marketplace in which developers can sell “extras” as plugins, environments and materials to be used in the Unreal Engine, a famous graphic engine also developed by the company. And guess what business model adopted by the store? Yes, 70/30, like the app stores criticized by the executive.

Anyway, the CEO's speech incites a very important discussion and that there is no indication of cooling down in the near future. I tend to agree with him in parts: although the comparison with MasterCard and Visa is, in my eyes, unreasonable (after all, these companies process a colossal amount of transactions per day, allowing the fees charged to be much lower), the owners of the stores, like Apple and Google, need to think of better ways to attract and keep medium and small developers on the scale, these days, it is extremely unbalanced on the side of the giants. If offering a higher percentage of profits to these professionals is a good strategy, that is another discussion.

What do you think?

via AppleInsider