Epic Games Says Google Pay Phone, Game Maker To Avoid $ 1 Billion Hit On App Store


Fortnite developer Epic Games revealed details on Thursday that Alphabets has signed Google with phone makers and other leading video game companies to lose $ 1.1 billion (roughly Rs.8,185 billion) in annual app store profits avoid.

Epic launched Fortnite in 2018 through its website and a partnership with cell phone maker Samsung, bypassing the Google Play Store, which charges developer fees of up to 30 percent of their sales.

Google feared that other companies would copy Epic and blocked that opportunity by erecting illegal hurdles, alleged Epic in an antitrust lawsuit filed against Google last year.

Google said the lawsuit was unfounded and misrepresented business negotiations. A trial is not planned.

Among the new details a judge failed to edit, Google estimated up to $ 6 billion (roughly Rs 44,646 billion) in Play revenue in 2019 and $ 1.1 billion in profits would be at risk in 2022 alone If Epic’s approach spreads and alternative businesses succeed, lead to the lawsuit.

But Google avoided the feared hit.

In 2019, the company launched the Premier Device Program for pay phone manufacturers to ensure Play Store exclusivity and limit the appeal of partnerships similar to Epic’s with Samsung, according to the newly released details.

Premier Partners got 12 percent of Google’s search revenue from their phones, compared with 8 percent traditionally, according to the filing. Some partners, including Lenovo Group’s LG and Motorola, also received 3 to 6 percent of Google’s “Play spend”.

Separately, in 2019, Google approved an attempt known as “Project Hug” to spend “hundreds of millions of dollars” on over 20 top developers in marketing and other perks to keep them on the Play Store, according to the details. The “vast majority” accepted Google’s offer by December 2020.

According to the lawsuit, Google called the new deals internally a success in order to stop “contagion” from developers who bypass the Play Store.

© Thomson Reuters 2021


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