Apple has third of gaming market's transactions in total, 7% of 'Fortnite' revenue

Posted:
in AAPL Investors edited May 4
The Epic v. Apple trial has revealed a slew of data points about the App Store that would otherwise be hard to come by, including margins and its share of the gaming market, JP Morgan says.

Credit: Andrew O'Hara, AppleInsider
Credit: Andrew O'Hara, AppleInsider


In a note to investors seen by AppleInsider, JP Morgan analyst Samik Chatterjee highlights some of the App Store details and data used as evidence in the opening arguments of the trial.

For example, Apple estimates that it accounts for roughly 23% to 38% of the total gaming transaction market -- with the remainder divvied up between other companies. Chatterjee says this data supports the view that Apple doesn't have monopoly power in the segment.

Additionally, during its opening argument, Apple highlighted the fact that its 30% commission on app and in-app purchases is an industry standard. Other companies that charge the same amount include Sony, Nintendo, Google, and Samsung.

One of Apple's main augments is how the App Store has benefitted developers. Since 2009, App Store developer revenue has grown 10 times. In December 2009, App Store annualized revenue was $1.2 billion. In 2019, that number had grown to $12 billion.

When it comes to "Fortnite" specifically, Apple's platforms accounted for only a minority share of the revenue. PlayStation and Xbox combined made up 75% of "Fortnite" revenue. Between March 2018 and July 2020, only about 7% of revenue in the battle royale game came from iOS.

Similarly, iPhone and iPad devices don't appear to be the only choice for "Fortnite" players. According to data provided by Apple, 95% of iOS users regularly use or could have used devices other than their Apple smartphones or tablets.

Apple also backed up some of its arguments relating to privacy and security. For example, it says iOS devices boasted the lowest percentage of malware infections. The mobile operating system accounts for about 2% of total malware infections, versus 39% for Windows, 27% for Android, and 33% for others.
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Comments

  • Reply 1 of 23
    genovellegenovelle Posts: 1,298member
    The Apple v. Epic Games trial has revealed a slew of data points about the App Store that would otherwise be hard to come by, including margins and its share of the gaming market, JP Morgan says.

    Credit: Andrew O'Hara, AppleInsider
    Credit: Andrew O'Hara, AppleInsider


    In a note to investors seen by AppleInsider, JP Morgan analyst Samik Chatterjee highlights some of the App Store details and data used as evidence in the opening arguments of the trial.

    For example, Apple estimates that it accounts for roughly 23% to 38% of the total gaming transaction market -- with the remainder divvied up between other companies. Chatterjee says this data supports the view that Apple doesn't have monopoly power in the segment.

    Additionally, during its opening argument, Apple highlighted the fact that its 30% commission on app and in-app purchases is an industry standard. Other companies that charge the same amount include Sony, Nintendo, Google, and Samsung.

    One of Apple's main augments is how the App Store has benefitted developers. Since 2009, App Store developer revenue has grown 10 times. In December 2009, App Store annualized revenue was $1.2 billion. In 2019, that number had grown to $12 billion.

    When it comes to "Fortnite" specifically, Apple's platforms accounted for only a minority share of the revenue. PlayStation and Xbox combined made up 75% of "Fortnite" revenue. Between March 2018 and July 2020, only about 7% of revenue in the battle royale game came from iOS.

    Similarly, iPhone and iPad devices don't appear to be the only choice for "Fortnite" players. According to data provided by Apple, 95% of iOS users regularly use or could have used devices other than their Apple smartphones or tablets.

    Apple also backed up some of its arguments relating to privacy and security. For example, it says iOS devices boasted the lowest percentage of malware infections. The mobile operating system accounts for about 2% of total malware infections, versus 39% for Windows, 27% for Android, and 33% for others.
    So, if their flagship game is a minor player on iOS why should they have any say in how our preferred Platform works, while they pay the same or higher commissions Sony and Microsoft? I wish there were a signature campaign calling for the boycott of Epic for threatening to destroy the function of our $1000 phones for their selfish greed and the will of China. 
    Trey_LanceBeatsspock1234h2pwatto_cobra
  • Reply 2 of 23
    Trey_LanceTrey_Lance Posts: 98member
    Again, I been pointing out Epic is largely owned by Chinas Tencent Media, which for people who spent time in Hong Kong And China like me, know that company is essentially controlled by Chinese communists.

    Nobody  find it odd that now Epic, largely Chinese owned is trying to hit Americas largest company Apple?


    spock1234EsquireCatsh2pwatto_cobra
  • Reply 3 of 23
    crowleycrowley Posts: 9,130member
    Again, I been pointing out Epic is largely owned by Chinas Tencent Media
    Really?  I hadn't noticed.  Maybe you should point it out a few dozen more times.
    foregoneconclusionbaconstangj2fusionmuthuk_vanalingamJapheyBeatsfastasleepwatto_cobraDetnator
  • Reply 4 of 23
    Trey_LanceTrey_Lance Posts: 98member
    crowley said:
    Again, I been pointing out Epic is largely owned by Chinas Tencent Media
    Really?  I hadn't noticed.  Maybe you should point it out a few dozen more times.
    Sorry but that is the whole key to this case. All this security or Gaming market stuff is just smoke screen.

    look at what China is trying to do to Tesla using “Weibo”(Also a company controlled by China) by planting people who is claiming Tesla
    brakes don’t work and trying to rile up the people.

    The Chinese communists are very calculating people, they smile at you but then stab you, they are essentially using our courts now trying to hurt American company for the benefit of Huawei and others
    edited May 4 Beatsspock1234EsquireCatswatto_cobra
  • Reply 5 of 23
    sflocalsflocal Posts: 5,825member
    crowley said:
    Again, I been pointing out Epic is largely owned by Chinas Tencent Media
    Really?  I hadn't noticed.  Maybe you should point it out a few dozen more times.
    Sorry but that is the whole key to this case. All this security or Gaming market stuff is just smoke screen.

    look at what China is trying to do to Tesla using “Weibo”(Also a company controlled by China) by planting people who is claiming Tesla
    brakes don’t work and trying to rile up the people.

    The Chinese communists are very calculating people, they smile at you but then stab you, they are essentially using our courts now trying to hurt American company for the benefit of Huawei and others
    Sweeney remains the majority shareholder.  Tencent owns 48.4% of Epic.

    As much as I can't stand Sweeney, I doubt he is bending-over and grabbing his ankles for China.  This is Sweeney having a personal beef with Apple and much less - if any - about China trying to ruffle Apple's feathers.
    muthuk_vanalingamfastasleepStrangeDayswatto_cobra
  • Reply 6 of 23
    Trey_Lance said: The Chinese communists are very calculating people
    That's more of a reason to doubt their involvement. What would they be hoping to achieve with such a flimsy case? It's easier to see it being motivated by individual ego than global political strategy. 
    watto_cobra
  • Reply 7 of 23
    tmaytmay Posts: 5,498member
    crowley said:
    Again, I been pointing out Epic is largely owned by Chinas Tencent Media
    Really?  I hadn't noticed.  Maybe you should point it out a few dozen more times.
    Sorry but that is the whole key to this case. All this security or Gaming market stuff is just smoke screen.

    look at what China is trying to do to Tesla using “Weibo”(Also a company controlled by China) by planting people who is claiming Tesla
    brakes don’t work and trying to rile up the people.

    The Chinese communists are very calculating people, they smile at you but then stab you, they are essentially using our courts now trying to hurt American company for the benefit of Huawei and others
    As much as I agree with you on China, the sad truth is that Tesla isn't known, at all, in the Industry for build quality, so I doubt that these brake issues were anything but the fault of Tesla. 
    BeatsStrangeDayswatto_cobra
  • Reply 8 of 23
    Trey_LanceTrey_Lance Posts: 98member
    sflocal said:
    crowley said:
    Again, I been pointing out Epic is largely owned by Chinas Tencent Media
    Really?  I hadn't noticed.  Maybe you should point it out a few dozen more times.
    Sorry but that is the whole key to this case. All this security or Gaming market stuff is just smoke screen.

    look at what China is trying to do to Tesla using “Weibo”(Also a company controlled by China) by planting people who is claiming Tesla
    brakes don’t work and trying to rile up the people.

    The Chinese communists are very calculating people, they smile at you but then stab you, they are essentially using our courts now trying to hurt American company for the benefit of Huawei and others
    Sweeney remains the majority shareholder.  Tencent owns 48.4% of Epic.

    As much as I can't stand Sweeney, I doubt he is bending-over and grabbing his ankles for China.  This is Sweeney having a personal beef with Apple and much less - if any - about China trying to ruffle Apple's feathers.
    If an entity owns 49 percent of your company, even not majority, trust me, your fortunes are tied to that entity . Don’t be naive 
    edited May 4 Beatsspock1234EsquireCatswatto_cobra
  • Reply 9 of 23
    Trey_LanceTrey_Lance Posts: 98member
    Trey_Lance said: The Chinese communists are very calculating people
    That's more of a reason to doubt their involvement. What would they be hoping to achieve with such a flimsy case? It's easier to see it being motivated by individual ego than global political strategy. 
    It’s a shot in the dark, using a proxy to hurt Apple, if they succeed, great , if not, on the next thing… The way you are thinking, brushing it off  is exactly why they are doing it.

    They won’t  and cannot confront  Apple directly because of all the jobs Apple produces in China but they also want to lessen Apple influence and help their own companies , what better than to use a stooge like Sweeney to take a shot 
    edited May 4 Beatsspock1234watto_cobra
  • Reply 10 of 23
    Trey_LanceTrey_Lance Posts: 98member
    tmay said:
    crowley said:
    Again, I been pointing out Epic is largely owned by Chinas Tencent Media
    Really?  I hadn't noticed.  Maybe you should point it out a few dozen more times.
    Sorry but that is the whole key to this case. All this security or Gaming market stuff is just smoke screen.

    look at what China is trying to do to Tesla using “Weibo”(Also a company controlled by China) by planting people who is claiming Tesla
    brakes don’t work and trying to rile up the people.

    The Chinese communists are very calculating people, they smile at you but then stab you, they are essentially using our courts now trying to hurt American company for the benefit of Huawei and others
    As much as I agree with you on China, the sad truth is that Tesla isn't known, at all, in the Industry for build quality, so I doubt that these brake issues were anything but the fault of Tesla. 
    The brake issue is a smear campaign, nothing more, the person who had the “brake  issue” was leading rallies like Trump, then they found out she used to worked for state media ….. maybe it was coincidence 
    edited May 4 BeatsEsquireCats
  • Reply 11 of 23
    22july201322july2013 Posts: 2,660member
    sflocal said:
    crowley said:
    Again, I been pointing out Epic is largely owned by Chinas Tencent Media
    Really?  I hadn't noticed.  Maybe you should point it out a few dozen more times.
    Sorry but that is the whole key to this case. All this security or Gaming market stuff is just smoke screen.

    look at what China is trying to do to Tesla using “Weibo”(Also a company controlled by China) by planting people who is claiming Tesla
    brakes don’t work and trying to rile up the people.

    The Chinese communists are very calculating people, they smile at you but then stab you, they are essentially using our courts now trying to hurt American company for the benefit of Huawei and others
    Sweeney remains the majority shareholder.  Tencent owns 48.4% of Epic.

    As much as I can't stand Sweeney, I doubt he is bending-over and grabbing his ankles for China.  This is Sweeney having a personal beef with Apple and much less - if any - about China trying to ruffle Apple's feathers.
    If an entity owns 49 percent of your company, even not majority, trust me, your fortunes are tied to that entity . Don’t be naive 
    I've never defended Crowley before, but there's a first time for everything. You used to say Tencent owns Epic. Now that you've been called out on that lie, you are qualifying it by saying "Tencent largely owns Epic." You don't need to "largely lie" to make your case. Just state the facts. Exaggeration doesn't help your case. Just speak calmly with an authoritative and accurate voice. I hate China more than you do, but I wouldn't overstate the facts like you do.
    Beatsmuthuk_vanalingamwatto_cobraDetnator
  • Reply 12 of 23
    sbdudesbdude Posts: 121member
    I hate China more than you do, but I wouldn't overstate the facts like you do.

    So much for staying away from hyperbole.
    watto_cobra
  • Reply 13 of 23
    crowleycrowley Posts: 9,130member
    sflocal said:
    crowley said:
    Again, I been pointing out Epic is largely owned by Chinas Tencent Media
    Really?  I hadn't noticed.  Maybe you should point it out a few dozen more times.
    Sorry but that is the whole key to this case. All this security or Gaming market stuff is just smoke screen.

    look at what China is trying to do to Tesla using “Weibo”(Also a company controlled by China) by planting people who is claiming Tesla
    brakes don’t work and trying to rile up the people.

    The Chinese communists are very calculating people, they smile at you but then stab you, they are essentially using our courts now trying to hurt American company for the benefit of Huawei and others
    Sweeney remains the majority shareholder.  Tencent owns 48.4% of Epic.

    As much as I can't stand Sweeney, I doubt he is bending-over and grabbing his ankles for China.  This is Sweeney having a personal beef with Apple and much less - if any - about China trying to ruffle Apple's feathers.
    I thought that Sony owns 10%, so not sure how Sweeney can be the majority shareholder if Tencent owns 48%?
    watto_cobra
  • Reply 14 of 23
    22july201322july2013 Posts: 2,660member
    sbdude said:
    I hate China more than you do, but I wouldn't overstate the facts like you do.

    So much for staying away from hyperbole.
    Were you complaining about the first half of my statement or the second? I can't read your mind.
    watto_cobra
  • Reply 15 of 23
    22july201322july2013 Posts: 2,660member
    In 2012 Tencent invested $330 million and got 40% of Epic, while in 2020 Sony invested $250 million and got 1.4%. Interesting.
    muthuk_vanalingamwatto_cobra
  • Reply 16 of 23
    Trey_LanceTrey_Lance Posts: 98member
    sflocal said:
    crowley said:
    Again, I been pointing out Epic is largely owned by Chinas Tencent Media
    Really?  I hadn't noticed.  Maybe you should point it out a few dozen more times.
    Sorry but that is the whole key to this case. All this security or Gaming market stuff is just smoke screen.

    look at what China is trying to do to Tesla using “Weibo”(Also a company controlled by China) by planting people who is claiming Tesla
    brakes don’t work and trying to rile up the people.

    The Chinese communists are very calculating people, they smile at you but then stab you, they are essentially using our courts now trying to hurt American company for the benefit of Huawei and others
    Sweeney remains the majority shareholder.  Tencent owns 48.4% of Epic.

    As much as I can't stand Sweeney, I doubt he is bending-over and grabbing his ankles for China.  This is Sweeney having a personal beef with Apple and much less - if any - about China trying to ruffle Apple's feathers.
    If an entity owns 49 percent of your company, even not majority, trust me, your fortunes are tied to that entity . Don’t be naive 
    I've never defended Crowley before, but there's a first time for everything. You used to say Tencent owns Epic. Now that you've been called out on that lie, you are qualifying it by saying "Tencent largely owns Epic." You don't need to "largely lie" to make your case. Just state the facts. Exaggeration doesn't help your case. Just speak calmly with an authoritative and accurate voice. I hate China more than you do, but I wouldn't overstate the facts like you do.
    Lie? I am from China, and if they own 49 percent publicly, trust me, they own you . If you chose to bury your head in the sand and think Sweeney is some type of warrior for the little guy, he is not, he is doing this for China 
    Beatsspock1234watto_cobra
  • Reply 17 of 23
    davidwdavidw Posts: 1,375member
    In 2012 Tencent invested $330 million and got 40% of Epic, while in 2020 Sony invested $250 million and got 1.4%. Interesting.
    Epic was worth much less back in 2012. So a $330M investment was 40% of their worth. While in 2020, $220M was only 1.4% of their worth. Epic is by no means a small developer that is hurt by paying a 30% commission to Apple or anyone. Just the fact that Epic can give up $20M a month of iOS revenue from Fortnight, for over 5 months now, just so that their CEO can make a fool of himself in public court, shows how little $100M means to them. Nothing was stopping Epic from keeping Fortnight on iOS and still fight Apple with their lawsuit. 
    Beatsmuthuk_vanalingamwatto_cobra
  • Reply 18 of 23
    Trey_LanceTrey_Lance Posts: 98member
    davidw said:
    In 2012 Tencent invested $330 million and got 40% of Epic, while in 2020 Sony invested $250 million and got 1.4%. Interesting.
    Epic was worth much less back in 2012. So a $330M investment was 40% of their worth. While in 2020, $220M was only 1.4% of their worth. Epic is by no means a small developer that is hurt by paying a 30% commission to Apple or anyone. Just the fact that Epic can give up $20M a month of iOS revenue from Fortnight, for over 5 months now, just so that their CEO can make a fool of himself in public court, shows how little $100M means to them. Nothing was stopping Epic from keeping Fortnight on iOS and still fight Apple with their lawsuit. 
    That increase I value of Epic in 8 years also shows you how much Apple App Store has helped Epic. People who stab the hand that fed them never end wel, well but Sweeney has China behind him now so maybe not.
    watto_cobra
  • Reply 19 of 23
    mattinozmattinoz Posts: 1,687member
    So having a basic level of respect for the customer and not just treating them as cash cow* turns out to be a profitable position.
    All these cases and anti-trust measures seem to be about retaining new versions of old business models that disrespect the customer instead of just tweaking the model.

    *Apple never forces you to buy but they do encourage a sometimes less than rational desire to buy.
    spock1234watto_cobra
  • Reply 20 of 23
    BeatsBeats Posts: 2,646member
    crowley said:
    Again, I been pointing out Epic is largely owned by Chinas Tencent Media
    Really?  I hadn't noticed.  Maybe you should point it out a few dozen more times.

    Why not? If just one person is educated per post, it’s worth the effort. Not sure why it bothers you. I hope he keeps repeating it since it’s true.

    It’s like when knockoff iPhone users want me to stop calling knockoff iPhones “knockoff iPhones”. 
    StrangeDayswatto_cobra
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