Apple employee testifies that the company made at least $100 million from Fortnite
The ongoing Epic v. Apple trial continued today with interesting testimony from Michael Schmid, head of games business development for the App Store. Bloomberg reported today that Schmid said that during the two year time period before Apple kicked Fortnite out of the App Store last year, the game earned $100 million in commissions for Apple. Schmid wouldn't give an exact dollar amount and wouldn't state whether the commission earned by Apple was over $200 million stating that it would be "inappropriate" for him to answer.
The game was removed from the App Store after Epic, in a bid to get around the 30% cut of App Store in-app revenue collected by Apple, created its own in-app payment platform for Fortnite players to use when purchasing currency for the game. This violated Apple's own rules and resulted in the expulsion of the game from the iOS app storefront.
Apple says that it has collected at least $100 million over a 30 month period by hosting Epic Games' Fortnite in the App Store.
According to app analyzer Sensor Tower, Fortnite users spent nearly $1.2 billion on Fortnite purchases made through the App Store last year. Apple's 30% cut on this revenue came to approximately $354 million. Epic is trying to show that Apple makes outrageously high profits from the App Store to prove its point that Apple is a monopoly.
Schmid, who headed Apple's dealings with Fortnite developer Epic Games, confirmed his prior comments about the amount of money Apple spent to promote the game. Schmid today repeated that Apple spent $1 million to help market Fortnite during its last 11 months in the App Store. Lauren Moskowitz, Epic's attorney, called the ratio between the amount of money that Apple received from the game and the $1 million it spent to promote it a "good deal" for Apple.
The amount of money that Apple collected from in-app purchases made by Fortnite players over the last 30 months amounted to at least $100 million. But that is small potatoes compared to the $22 billion that Apple took in from App Store commissions last year alone.
Apple CEO Tim Cook expected to testify on Friday as the trial comes to an end next week
Other companies watching the lawsuit with rapt attention include Netflix and Spotify, both of which have had very public battles with Apple over what has become known as the Apple Tax.
Friday figures to be a big day in the courtroom as Apple CEO Tim Cook will take the stand. This news got out after the judge approved Apple's request to allow the 60-year old executive to be the first witness to be sworn in on Friday. That day, Apple is expected to wrap up its case and on Monday both firms should give their closing arguments.
Since the Epic v. Apple case is being heard as a bench trial, there is no jury seated and the final decision will come from Judge Yvonne Gonzales Rogers. On Friday, Apple co-founder, the late Steve Jobs, is likely to be mentioned in testimony. Epic's legal team has mentioned multiple times how Jobs initially felt that the App Store would not earn Apple that much money when he first introduced it in July 2008.
But as we now know, the App Store has become a real money maker for Apple. Epic is possibly trying to show that Apple had to turn to monopolistic behavior in order to make the App Store what it is today. Based on publicly released figures and testimony from Apple Fellow Phil Schiller, through June 2017 Apple has collected at least $20 billion which is not bad considering Jobs' lukewarm forecast for the App Store back in 2008.
Whenever Judge Gonzales Rogers makes her ruling, it is bound to have wide repercussions throughout the mobile hardware and software communities.