When Epic Games complained about Apple App Store charging 30%, tensions rose between the two companies. Last Friday, Apple (NASDAQ:AAPL) said it terminated Epic’s App Store developer account.
Fans of the incredibly popular game, Fortnite, are stuck. They will have no new app or updates available. Epic is playing a dangerous game. It made $3 billion in profits from Fortnite in 2018. It probably makes billions now. Getting cut from Apple App Store will end Epic’s revenue source. It is in no position to negotiate the costs it must pay to list its game on the storefront. If it wants special treatment or lower rates, that will not happen.
Epic violated the App Store guidelines by using its very own payment system. And if it does not conform, revenue will dry up completely.
Facebook (NASDAQ:FB) chimed in by saying, at a companywide meeting, that Apple has a unique stranglehold as a gatekeeper. CEO Mark Zuckerberg complained that Apple would not let Facebook notify people on iPhone devices that it collected 30% from in-app purchases in a new feature on the Facebook app. Just as Epic must abide by Apple’s rules, Facebook must do so too.
Facebook faces enormous revenue losses ahead when the next Apple iOS strengthens its privacy protection. With Facebook in no position to bargain, Apple is in control. Investors should hold Apple stock.
