Arguably, the most profitable industry on the planet right now is the gaming industry. It makes more money in a year than the music and television industries combined. Such a promising market is one of the main reasons many technology giants are investing in gaming.
Microsoft, Sony, and Nintendo are the big three giants in the gaming world right now. These three companies make the most money in the industry and launch games of the highest standards. Everyone is aware of the consoles that these companies release and they make a large part of their profit.
Xbox, PlayStation, and the Nintendo Switch are household names all over the world. It’s hard to find any competitor for these goliaths of the gaming world. However, a new report suggests that one technology company has actually been among these three in revenue for a long time.
Apple makes more money in gaming than the likes of Microsoft, Nintendo and Sony combined, according to a recent report published by Visual Capitalist, a website focusing on business and its trend. It’s safe to say that everyone is shocked by how Apple makes more money than the big three companies without releasing any games.
The technology giant made a whopping $13.5 billion in gaming revenue, in the year 2020. On the other hand, the big three companies, alongside Activision Blizzard (the proprietor of the Call of Duty franchise) made just $6.5 billion in gaming revenue in 2020. Such a huge gap in profits is surprising to see because Apple doesn’t make consoles or games.
So, the question that comes up is how does the technology company make such revenue from gaming? According to Venture Capitalist, the main reason for this gaming revenue for Apple is the fee it charges developers. The company will get 30% of all the in-app purchases, subscriptions, and any other applicable fees from developers.
Due to this heavy fee, Apple has made more money than a lot of dedicated gaming companies. Every company that makes games for mobile has to put them on the App Store to make them available for purchase. Afterward, the technology giant takes 30% of any money spent on popular games, like Genshin Impact, from the original developers.
Hence, no matter who makes games, Apple will always get a cut of the revenue. Companies have tried to bypass this payment method by asking players to purchase things from third-party websites. Fortnite was banned from the App Store because Epic Games made its very own system in-game and Apple didn’t like that very much.
Even though Apple won most of the similar cases, Epic Games did get a win out of this situation. Companies could now direct players to other payment methods and Apple could do nothing about it. Furthermore, investigations against Apple’s storefront policies have also been initiated in countries like the United Kingdom, with the Competition and Markets Authority (CMA) even ruling the company’s approaches as “anti-competitive”.
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