Epic vs. Apple (& Google) – A right Battle Royale pt IV.

Google sticks its oar in.

• Google’s move to tighten up on who can dodge its app store commission goes hand in hand with a more open environment on Android for competing app stores which I suspect is aimed at deflecting growing claims of monopolistic abuse while earning more than ever from Google Play.
• Google has said that it is going to clamp down on apps that circumvent its payment mechanism meaning that by September 30^th 2021, all payments on Google Play will have to use its payment mechanism.
• Google has said that this will affect less than 3% of app developers on Google Play but this is disingenuous as the percentage of revenue that is affected is far higher.
• Subscription-based services are now some of the highest revenue-generating apps on Android and it is these sorts of services that have been using alternate payment mechanisms (e.g. Netflix and Spotify).
• This move will be met with considerable dismay by the newly formed “Coalition for App Fairness” which consists of 13 developers including Epic Games, Spotify and Match Group who are pushing for greater competition for payment mechanisms.
• This is exactly what Google is claiming that it will provide by making it easier for alternative app stores to compete with Google Play.
• It is already possible to install alternative app stores but unless they come directly from the manufacturer, users have to go through a complex process that involves enabling installations from untrusted sources.
• This obviously puts many non-tech-savvy users off and I suspect that it is this that Google will be addressing in Android 12.
• However, these moves will benefit Google far more than app developers as:
  • First, competition. The few app stores that have made it onto Google’s Android devices have found life to be extremely difficult.
  • Google Play is the default choice on the device and it’s the only one that the vast majority of users know.
  • Alternatives like Aptoide have found it difficult to compete and even Epic Games with its massive hit Fortnite was unable to make headway on Android.
  • This is why I think that Epic Games recently capitulated and returned Fortnite to Google Play (see here), albeit temporarily.
  • Second, versions. Android is so fragmented that Google has stopped openly disclosing what percentage of its user base on Android are running which version of Android.
  • The last time that this data was openly available, a new version of Android would reach just 17% penetration in the first 12 months of being available.
  • By contrast, iOS will reach around 90% penetration of the new version within 90 days of release.
  • Consequently, it will be many years before all of Google’s userbase will have easy and simple access to multiple app stores.
  • Even the what is certain to be a long-running dispute between Epic Games and Apple will have been sorted out by then.
• The conclusion here is clear.
• Google is cementing its grip on developers and the olive branch it is offering will not help developers in any meaningful way.
• It is becoming clear that the only way developers will achieve a cut in the revenue share they pay will be through a victory by Epic Games against Apple or a mass rebellion where all the developers club together.
• This is what the “Coalition for App Fairness” is all about but it will need far more members before it has any real clout.
• This is the dilemma that developers face because a mass rebellion against the established app stores will put their livelihoods at risk.
• There are no easy answers.