While the current status quo perpetuated by Apple is clearly harmful to many individual businesses, it can also have a significant impact on whole industries.
One such industry is mobile gaming.
In recent years, the global mobile games market has seen strong growth, with some estimates showing an expected annual growth rate of 6.97% by 2027, resulting in a projected market volume of US$1.65bn by 2027. It also has a huge userbase, which is expected to reach 30.1 million, and user penetration of 43.2%.
Against the backdrop of a difficult economic landscape, the success of the British mobile games has been a bright spot. Unfortunately, further success is being undermined by Apple.
The App Tax
One of the largest issues facing this growing market is the reoccurring issue of Apples unjust App Tax. The gaming industry accounts for more than 60% of Apple’s App Store revenue. For mobile gaming companies and developers, each purchase their customers makes is subject to a 15-30% fee, depending on their projected revenue.
This cut comes directly from developers’ revenues, and leaves them with the difficult decision of whether this must be passed on to customers.
One company in this industry, and in discussion with CAF, is facing just this problem and believes there is a fragmented approach to the commission rate, and that more clarity is needed from Apple and Google, especially as their decisions effect both consumers and emerging businesses. However, they have requested to remain anonymous in fear of retaliation from the monopolists, underscoring how deep the issue goes.
Another huge issue facing the UK mobile gaming industry is transparency. The aforementioned company believes there is a great deal of ambiguity and uncertainty around app store terms, particularly around negative decisions from Apple and Google when apps go through review.
Government pressure has forced app store owners to change approaches to this, however, terms still remain unclear. For example, Apple removed the following sentence from its terms: ‘you may not contact customers.’ This has led to confusion on whether companies are now able to contact their customers, or if they will be subject to reprucussions down the line.
The retaliation this business faces from Apple and Google is removal from the app store, which would greatly impact this business’ bottom line, potentially even putting them out of business. Ultimately, threat from Apple and Google is so great, some businesses are scared to even associate with any organisation attempting to level the playing field.
The UK games market needs, and deserves, a fair environment to flourish.
This company would like to see the alteration to the 30% app tax, enabling the business to:
- Invest more in product development, making better games and creating improved user experiences.
- Invest in its business overall, increasing people capacity.