Google’s trial against Fortnite’s Epic Games is revealing how Google negotiates deals with app makers. While it traditionally takes a cut from every in-app purchase, Google offered payments to maintain major developers in their store.
Epic was offered such a deal, totaling $147 million. Epic’s refusal must have meant it hoped to generate over half a billion in sales. The Verge says:
Google has confirmed in court that Epic was offered a $147 million deal to launch its hit game Fortnite on Android’s Google Play Store. The deal, which Google’s VP of Play partnerships, Purnima Kochikar, says was approved and presented to Epic but not accepted, would have seen the money dispensed over a three-year period of “incremental funding” (ending in 2021) to the games publisher. It was meant to stem a potential “contagion” of popular apps bypassing Android’s official store and, with it, Google’s lucrative in-app purchase fees.
Epic launched Fortnite on Android in 2018 directly through its website, avoiding the Play Store. That allowed it to sell Fortnite’s in-game currency, V-Bucks, without paying the commission required of Play Store apps. It relented in 2020, saying that “scary, repetitive security pop-ups” and other factors had put it at a severe disadvantage.
Other games, such as “Call of Duty”, was offered and accepted a payout of $360 million. Epic claims that this amounted to a bribe to prevent these developers from launching their own app-store. NY Post has more:
Google gave “Call of Duty” parent Activision-Blizzard a whopping $360 million in incentives in 2020 to launch its video game on the “Play” app store, according to lawyers in Epic Games’ antitrust lawsuit targeting Google’s Android app marketplace empire.
Lawyers for “Fortnite” maker Epic Games argue that Google relied on payments to game and app developers, known internally as “Project Hug,” as part of an effort to “bribe and block” potential competitors from launching their own app stores or otherwise challenging its monopoly.
Epic’s lawsuit is testing the limits of what is considered a monopoly. Android allows competing app stores, but they do not receive the same integration as Google’s own.
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