
Google will lose $50M or more in 2018 from Fortnite bypassing the Play Store - doppp
https://techcrunch.com/2018/08/10/google-will-lose-50-million-or-more-from-fortnite-bypassing-the-play-store/
======
gkoberger
The framing of this article feels weird to me. Google offers a service
(distribution), and it just so happens Fortnite doesn't need it. It also
completely ignores how much Fortnite will lose from people who don't install
it because they can't figure out how.

A better way would be "Fortnite is big enough to bypass Google and still make
$180MM", rather than acting like this is Google's fault. I mean, the fact that
phone OSes get a cut of everything on their platform is already an insane
racket.

~~~
izacus
In a few years the media (which has always been very pro-Apple) has
internalized the idea, that all your software MUST come from a single
corporation controlled walled garden and pay tax to them. The whole concept of
being able to install software from a source you choose is now so foreign that
they'll speak against it when possible.

And unfortunately, this seems to be the case with a lot of HN commenters as
well.

~~~
dbt00
I've been running open source, free, libre, etc software since the mid-90s. My
firewall is openbsd. my laptop runs linux. I use emacs for most of my software
editing. I want you to understand that I am a big open source weenie, and have
been for decades.

I think asking consumers to evaluate risk of installing third party apps and
manage permissions is insane. My phone runs iOS. My family the same. The
volume of malware in the Play Store alone, much less in the sideloading
community is mind boggling. If I ran Android I would only install software
that I had written myself or come from a trusted vendor, and only use a
browser (probably not Chrome even, but Firefox) for any third party content.

Any anti-walled-garden screed has to grapple with the fact that in the real
world, the walled garden protects people from mass data theft and
infiltration. Windows used to be like this, before many more users switched to
Mac (which is harder, but not impossible) to backdoor. Replicating the
internet security environment of the late 90s but on our phones would be a
disaster for the technology-using world.

~~~
adrianmalacoda
There's something to be said for having a known good source of software that
you can trust. GNU/Linux of course follows the same model, where you're
expected to get the majority of your software from the distro repository. So,
I don't think this model is inherently antithetical to free software.

I'm a free software nerd and I run LineageOS-sans-Google on my mobile device.
I get the vast majority of my software through F-Droid, which works like a
GNU/Linux distribution - they build all packages from source and sign with
their own key. Only time I would sideload a package is if it's not available
in F-Droid (because it's proprietary - although I've since found out about
Yalp and use that instead) or if I'm building it myself. It works well enough
for me.

I think the objectionable part of a walled garden, at least to a free software
nerd, is the walled part. I appreciate the option of being able to step
outside if I feel I need to.

------
jpdus
I have mixed feelings about this. On the one hand, I am still a big fan of
Android´s openess (at least compared to the walled garden that is iOS) and I
think it should the right of every company or developer to NOT use a closed
platform to distribute its app.

However on the other hand, this move by Epic sets a dangerous precedent:
Factually, Google get´s economically punished for being more open than Apple.
This does not feel right for me.

From a business point-of-view (when sideloading becomes more common) the
"right" move for Google would be to fork AOSP, make new Android versions as
closed as iOS (while still distributed for free) and prevent any sideloading.
No sane CEO who is measured by increasing shareholder value could justify
stayig open if this jeopardizes the revenues without providing major benefits.

I, as a user, think this is a sad and alarming development. However,
apparently most comments and media do not share this opinion? Are there any
reasons why Google _deserves_ no revenues while Apple get´s 30%? When there
are none, this situation can't be sustainable from an economic point of view.

~~~
Pissompons
> From a business point-of-view (when sideloading becomes more common) the
> "right" move for Google would be to fork AOSP, make new Android versions as
> closed as iOS (while still distributed for free) and prevent any
> sideloading. No sane CEO who is measured by increasing shareholder value
> could justify stayig open if this jeopardizes the revenues without providing
> major benefits.

The problem here is that while Google controls the software, it doesn't
control the hardware. All the real power is in the hands of the OEMs.

If Google wanted to close Android, they'd need to either:

\- Leverage/convince all the OEMs into adopting the closed fork

\- Watch as they lose control completely when someone else makes a dominant
fork

\- Watch the Android ecosystem crumble as everyone throws out their own fork

I don't think this would work because the OEMs have no incentive to do it.
They don't get any cut of the Play Store profits so they have no interest in
its success. To the contrary, Samsung at least has its own store. Plus,
Android's openness is one of the things differentiating it from Apple. If they
closed it down, they have the compromised privacy of a Google device with the
closed platform of an Apple device. Apple's closedness then ceases to be a
problem and they can differentiate with their privacy-friendliness.

~~~
scarface74
_\- Leverage /convince all the OEMs into adopting the closed fork_

You mean like they already force OEMs to use thier closed source apps and
force them not to make any phones that are use Android forks?

------
vosper
> In the process, it’s costing Google around $50 million this year in platform
> fees, according to a new report.

It's not _costing_ Google anything, and they're not losing money on this
either. It's revenue that they might have expected to earn, which they're now
not going to be earning.

~~~
asdkhadsj
Also, what solution would there be? Allow other companies to bypass Google's
revenue system in this area? How much will they lose from other companies who
want to be treated equal to Fortnite.

 _edit_ : This is a question folks, I'm not sure why you're down voting a
question.. ya'll are touchy as hell lol.

To put it differently, since I think my first attempt just confused you all in
mass:

If Google were to lower it's take from 30% to 15% _(fake numbers)_ , for
everyone, so that Epic would use their business - would that gain them money
or lose them money?

It's a question, yikes ya'll.

~~~
Drakim
I don't understand the framing of this conversation. Does other companies owe
Google money by merely existing?

~~~
TremendousJudge
No, it's the same writing that frames piracy as "costing" money to the
developers. If something costs you some money there's the implication that you
had the money, and then you didn't have it after that something happening. As
much as they'd like to believe it, projected earnings aren't money you
actually have

~~~
bena
I'd say that the piracy does cost developers something. Not every pirated copy
is a lost sale, but there are some number of people who are capable of buying
software that instead choose to pirate it for any number of reasons and would
buy it if piracy was not an option.

I wouldn't say it's a high percentage, but it's not insignificant.

I'd count that as a lost sale.

But I do agree that this is a different situation. This is just a high profile
application that has decided to forgo something completely optional.

~~~
mcphage
> I'd count that as a lost sale.

It's a lost sale, but that's still not a _cost_. It's just money they never
got. If it had actually _cost_ them, then I'd expect it would take away money
they previously had, like I say lunch costs me $15 because after the
transaction I'm down $15 (but up a lunch).

At best, it's akin to opportunity cost.

------
bdz
CEO of Epic

>The 30% store tax is a high cost in a world where game developers' 70% must
cover all the cost of developing, operating, and supporting their games.
There's a rationale for this on console where there's enormous investment in
hardware, often sold below cost, and marketing campaigns in broad partnership
with publishers. But on open platforms, 30% is disproportionate to the cost of
the services these stores perform, such as payment processing, download
bandwidth, and customer service. We're intimately familiar with these costs
from our experience operating Fortnite as a direct-to-customer service on PC
and Mac.

[https://www.eurogamer.net/articles/digitalfoundry-2018-fortn...](https://www.eurogamer.net/articles/digitalfoundry-2018-fortnite-
on-android-doesnt-use-google-play-confirmed)

And another interesting quote from him

>If you look at it, the stores on the smartphone platforms actually do very
little. They’ll put ads up in front of your game. When you search for Fortnite
on iOS you’ll often get PUBG or Minecraft ads. Whoever bought that ad in front
of us is the top result when searching for Fortnite. It’s just a bad
experience. Why not just make the game available direct to users, instead of
having the store get between us and our customers and inject all kinds of
cruft like that? It’s a general criticism I have of the smartphone platforms
right now.

[https://venturebeat.com/2018/08/03/tim-sweeney-epics-ceo-
on-...](https://venturebeat.com/2018/08/03/tim-sweeney-epics-ceo-on-fortnite-
on-android-skipping-google-play-and-the-open-metaverse/2/)

~~~
ksec
How about the 30% of store tax must cover the cost of developing, operating
and supporting their Open Platforms Operating System? Along with payment
processing, download bandwidth, and customer service?

Google doesn't charge them a cent for using Android. As a matter of fact if
you don't like the Google Store, Maps, and Search it has to offer for free,
you could have forked the whole thing and tidy up all the loose end and call
it something else.

~~~
Pissompons
> How about the 30% of store tax must cover the cost of developing, operating
> and supporting their Open Platforms Operating System?

> Google doesn't charge them a cent for using Android.

Why should Epic care about Android's development costs? They don't pay
Microsoft a cent for Windows, why should they pay Google for Android?

Google chose this business model, software developers certainly have no
obligation to support it.

> Along with payment processing, download bandwidth, and customer service?

Epic has all this infrastructure already, they need it for their PC customers.
Why overpay for Google's?

~~~
Eridrus
> Why should Epic care about Android's development costs?

He seems to care about console makers' costs and considers their 30% there
reasonable, but he does not seem to consider them reasonable here.

> Why overpay for Google's?

I don't think he's under any obligation too, but it's interesting to see
platforms like Steam gain traction despite not handling most of the investment
in the platform, and that's on Windows where you can get an installer.

~~~
krn
> He seems to care about console makers' costs and considers their 30% there
> reasonable, but he does not seem to consider them reasonable here.

Because the absolute majority of Android devices are not made by Google, just
like the absolute majority of Windows devices are not made by Microsoft. What
if Microsoft took away 30% of revenue from all software developers publishing
on Windows Store?

~~~
ksec
>Because the absolute majority of Android devices are not made by Google, just
like the absolute majority of Windows devices are not made by Microsoft. What
if Microsoft took away 30% of revenue from all software developers publishing
on Windows Store?

And you have to paid for Windows License? Somewhere along the line someone
will have to paid. Open Source isn't free.

Of course it is perfectly fine for EPIC to avoid the 30% charge. But to judge
Google charging 30% as unreasonable while you are getting the ecosystem for
free, and than compare the cost of console maker is just being hypocrite.

This is speaking as someone who doesn't like Google even before the first
iPhone shipped.

~~~
krn
> And you have to paid for Windows License? Somewhere along the line someone
> will have to paid. Open Source isn't free.

Open source _is_ free. Android is based on Linux, just like Ubuntu, and
smartphone manufacturers are major contributors to AOSP[1].

[1] [https://www.androidpolice.com/2012/04/26/key-android-
enginee...](https://www.androidpolice.com/2012/04/26/key-android-engineer-
weighs-in-on-manufacturer-contributions-to-aosp-and-update-rollouts-you-might-
be-surprised-whos-on-top/)

------
windows_tips
That's a strange definition of lose. A third party doesn't contract with
someone for their product launch, and that is considered a loss of money?

~~~
benmowa
"Unlike Apple, which only allows apps to be downloaded from its own
storefront"

So as i read it, the argument being made is: if Google had chosen the same
path as apple did in their app store, Google would not have missed this
opportunity.

~~~
windows_tips
So you're saying this publisher would have used Google's store, even though
they didn't when they had the choice, if Google had locked down its phone?

------
opencl
It's wild how a company distributing an Android app in the exact same way that
they already distribute the PC version of the same program has blown up into
this huge and controversial news story.

~~~
Impossible
Yes, there are no headlines saying "Valve will lose $600M or more in 2018 from
Fortnite"...

~~~
jandrese
[https://thenextweb.com/gaming/2018/08/07/fallout-76-and-
fort...](https://thenextweb.com/gaming/2018/08/07/fallout-76-and-fortnite-
pave-the-path-for-ditching-steam/)

It is really impressive that these companies have been able to justify a 30%
cut for running a hosting service with stripped down search engine and payment
processor. It's like they say in real estate: Location Location Location.

------
plicense
"Unlike Apple, which only allows apps to be downloaded from its own
storefront, Google’s platform is more open."

Oh the irony. Android is more open than iOS and yet its Google that EU found
to be at fault with Android. How is this not a classic example that, if
anything, Android provides a more open platform?

~~~
annabellish
Apple aren't doing anything to prevent competition with their platform. Google
are/were. It's that simple.

iOS is a closed platform, and Android is a more open platform, but that's 100%
orthogonal to Apple or Google's _business practices_. Closed platforms are not
illegal, while anticompetitive behaviour is.

~~~
kodablah
> Apple aren't doing anything to prevent competition with their platform.

This is a categorically false statement. I can point to a lot of places where
Apple are doing quite a bit to prevent competition on their platform. I mean,
browser engine choice is the easiest to see of dozens of ways Apple is doing
something to prevent competition on their platform. Did you mean something
else by your statement I do not understand?

Even if you mean "with their platform" vs "on their platform" as if users can
go somewhere else, that's a far cry from "aren't doing anything" as they are
in fact doing lots of things.

~~~
annabellish
I do mean with their platform, which is why I wrote that and not on their
platform.

Only offering your software on your hardware isn't anticompetitive. It's the
default for almost everything - your smart fridge isn't anticompetitive
because you can't install a different web browser, your modem/router isn't
anticompetitive because you can't switch to openwrt, your smart toothbrush
isn't anticompetitive because you can't install custom firmware, et cetera.

What is anticompetitive on Google's end has absolutely nothing to do with the
software, and everything to do with the licensing. Google have a couple simple
rules that make their behaviour anticompetitive. If you want to ship an
Android phone with google apps, then:

1) You may not ship any android phones without google apps 2) You may not ship
a phone with google apps and a default search engine which is not Google

So, if you're a new manufacturer, Smasung, and you wish to make an Android
phone, you have two choices:

1) Use Google Apps and immediately get an extremely mature operating system
with a very large software library, but you may not compete with google. Not
even that you may not use _that device_ to compete with google. You're not
allowed to make any Android-based devices which compete, even if those
themselves don't use google software.

2) Develop API-compatible replacements for everything in Google apps, or you
can't access the android ecosystem because of how tightly integrated things
are. Note, some of these APIs are not clearly documented and have mysterious
behaviour. This option is thus only really available to megacorporations who
can afford to sink a couple years of development into the project before
selling a single device.

This is fundamentally different from what Apple is doing, which is simply
selling a product.

~~~
kodablah
> Only offering your software on your hardware isn't anticompetitive

I'd say that it has been upheld that only offering your software on your
platform has been ruled as anticompetitive if you are large enough. Same with
prioritizing your results on your platform, etc. Regardless of if that
platform is hardware or any other restricted area with a majority presence.

> your smart fridge isn't anticompetitive because you can't install a
> different web browser

Unfortunately, I'm afraid if you have the vast majority of the fridge market,
and you lock out development for it, you very likely will be accused of
anticompetitive behavior.

> This is fundamentally different from what Apple is doing, which is simply
> selling a product.

Yes, that is very true it is fundamentally different and the specific part
about the Android licensing is anticompetitive for those reasons and Apple
would not be subject to those rulings. Many of the other software installation
practices that Google/Microsoft have been ruled anticompetitive for, however,
are very similar to what Apple is doing and only their smaller market share
prevents the violation. But we shouldn't pretend that Apple isn't doing
anything to prevent competition here, just not in the way that Google did with
the most recent Android ruling. Apple does plenty to prevent competition with
their platform as do most companies. To say it does nothing is wrong.

------
seanalltogether
On the other hand, Epic will lose out on the easy-to-access money that users
have available on the Play Store through gift cards or google pay.

The only reason I downloaded Hearthstone on my ios device was so I could use
store credit to purchase packs. Otherwise I would have just remained a solely
F2P player.

~~~
SketchySeaBeast
It's incredibly pain free to spend money on the google store. Just throw your
fingerprint on there and who knows how much you've spent.

~~~
jsgo
the fingerprint reading API (not sure the name in Google's world) isn't
dependent on Google Play Services, is it? If it isn't, in theory they could
still implement it to be the confirmation for purchasing I'd imagine.

~~~
SketchySeaBeast
Totally. I'm just saying google play is convenient.

------
mrgoldenbrown
Next week on techcrunch, "Nintendo steals $50m by distributing games via
cartridge and bypassing the Steam store."

------
ssalka
This article title bugs me because it implies that Google _inherently
deserves_ to make $50m from a game that they neither developed nor previously
offered through the Play Store.

IMO, they're not losing _anything_ - they're just not gaining the extra
revenue they would have gotten had Epic chosen to go the "usual" route.

------
MiddleEndian
I think this is a good trend. Not that I have much of an opinion on how much
Google makes off any particular game but I'm glad people are willing to
install programs on their devices without getting anyone's permission.

------
ghostbrainalpha
What's crazy to me is that the 30% fee is standardized across every app in the
exact same way.

As an Indi game developer, the 30% fee is totally worth the trade for help in
discovery. The play store has received about $1000, for their distribution
service with my game.

But a game like Fortnite receives almost the __identical servic __e from
Google and is charged 50 million? Sure some costs scale, like bandwith.... so
its not _exactly_ apples to apples, but WAY to close in my opinion.

Would Fortnite be on the Play Store if Google charged 5%, or even 10%. The
real issue is the unreasonableness in this pricing structure.

------
Skunkleton
I can't imagine that 100% of the people interested in fortnite for android are
willing to sideload the apk. I would be surprised if this wasn't having a net-
negative impact on the total number of android users. I wonder if this is just
to avoid paying a percentage on in-app purchases? What else could it be?

~~~
skeetmtp
It will be available on samsung galaxy apps store, so for all Samsung users
(quite a lot) no need to side install an apk.

~~~
miguelrochefort
Probably less discoverable there than on Fortnite's website to be honest.

------
znebby
It was my understanding that Google / Apple do not charge a fee on in-app
purchases which are not platform specific and which use third-party payment
processing.

Never having played Fortnite, I assumed that in-app purchases are specific to
your account and would carry-over if you moved from Android to iOS. Is that
not the case?

------
lunaru
The funny thing about Google as a Gatekeeper is that it's already a Gatekeeper
via search. Even in a world where there are no 30% distribution shares, most
products still live and die by their ranking on search results for either
brand searches or long tail keywords. It's not uncommon to see brands buying
their own name as keywords just to rank #1 on search results pages that are
more and more fully loaded with ads above-the-fold, including competitors who
buy keywords against well know brands.

The Play store is just additional icing on the cake. They're not losing sleep
over the one unicorn exception known as Fortnite. 99.9% of other companies do
not have the word of mouth to overcome the various gates, whether it's Google
or Apple or Steam.

------
SketchySeaBeast
I wonder what sort of deal Samsung has - it's featured prominently on the
Galaxy Apps main page.

------
Freestyler_3
Rather have no mandatory middleman, fortnite made the right choice.

However the article is leaning towards a "google shouldn't allow this to earn
more money" kind of view, but how much is this on the total that google makes
from being a middleman?

------
kodablah
Alternatively, how much does Google gain by having a platform that allows
companies to bypass the Play store? Myself, a tiny and possibly
unrepresentative data point, counts as one customer who chooses them
specifically for this reason.

------
m52go
I hope this becomes a trend but there should be an easy way for non-savvy
users to check keys & hashes to make sure they're not duped with tainted
binaries.

------
solarkraft
"Google will lose"

what?

They won't gain from that particular source. They'll still make _fucking
BILLIONS_.

 _Epic Games_ will _save_ 50M$.

------
mkhalil
I wonder if this becomes a norm in the Android freemium gaming community, will
they start advertising more Android ads to iPhone users. Maybe even start
offering free "trade-up" program if they spend enough.

If a user spends $1000, and 30% goes to Apple, that's $300 that could of
bought the user a dedicated gaming device that will allow them to avoid that
30% tax.

I love Apple, but 30% for in-app purchases is something I will never find
comfortable.

I get the exposure, but a game like Fortnite already has enough exposure.

Will freemium gaming companies eventually produce their own device to avoid
this 30%.

Only time will tell, but I can say that if I had a game generating $300
million in revenue, and 60 million went to Apple, I wouldn't mind spending a
few million in research on how to get out of paying that 60 million for the
next year.

~~~
miguelrochefort
> If a user spends $1000, and 30% goes to Apple, that's $300 that could of
> bought the user a dedicated gaming device that will allow them to avoid that
> 30% tax.

How many iOS users willing to invest $300 on a low-end Android device to play
Fortnite in order to start saving 30% after spending over $700 in in-app
purchases do you think exist in the world?

~~~
charlesdm
Probably a significant amount

~~~
miguelrochefort
If you're rich enough to spend $1000 on mobile games, you probably don't care
about a 30% saving.

~~~
charlesdm
But the company selling you those services does. Do you think the consumables
are any cheaper just because they're not paying the 30% App Store fee? Think
again

------
phobosdeimos
I wonder how much Google regrets not being a walled garden like iOS.

------
gok
I wonder how many people won’t buy Fortnite hats because getting their CC out
is so much more friction than just charging it to your Google account.

------
Teknoman117
Amazon Video / Prime Video takes the exact same approach. You have to sideload
Amazon's app store to install the player.

~~~
learc83
Looks like it's on google play right now, and I have it installed and don't
remember sideloading.

~~~
Teknoman117
Interesting. It wasn’t always there.

[https://www.amazon.com/gp/video/splash/sd/t/appstore](https://www.amazon.com/gp/video/splash/sd/t/appstore)

------
baybal2
Well, biggest apps are the ones strongarming platform vendors. Weixin, for
example, threatened to quit apple app store because of in app purchases.
Apple's Chinese C-levels were personally sent to Shenzhen appeasing Tencent
when they began intentionally degrading weixin's functionality for users with
Chinese IPs.

------
0xakhil
I understand the perspective of most of the comments here. Yes, google is not
really loosing 50 million bucks. But, isnt a major fraction of what would be
spend on fortnite is a lost income which otherwise would have been spent on
playstore? And this lost income would be significant since fortnite is
massively successful?

------
zakkeg
I doubt this would change anything for Epic Games because of Tim Sweeney's
opinions on stores but what is a good revenue split between developers and
Google?

------
zakkeg
What would be a reasonable split between Google and app developers? Or is
there a better method that Google should use, like charging X% for individual
services?

------
jaxondu
Just curious why in China there are several app stores for Android (Tencent,
360, Baidu etc), while the rest of the world uses mainly Google Play Store?

~~~
lern_too_spel
The Google Play Store is outside the great firewall and therefore probably
unusable in China. Phone makers aren't going to ship phones with unusable app
stores, so they need to use alternatives. It's the same reason UC Browser and
QQ Browser are so popular in China.

~~~
jaxondu
I'm curious why there aren't more app store outside China, as evidently from
China example, the app store business is sustainable, and Android outside
China has a bigger market.

~~~
lern_too_spel
Samsung, Motorola, Amazon, etc. have tried. The trick is to convince all the
developers to publish on your app store, so the users will use your app store.
They're not going to bother if the phones also have the Google Play Store. The
phone manufacturers need to include the Play Store or users won't buy the
phones. There is a large first mover advantage.

------
Hnrobert42
Did anyone else get a weird pop up add that you couldn’t x out of?

------
microcolonel
Great! For the odd app or two which can actually feasibly pull this off, it is
good that it's on the table. I'm sure Google is not losing sleep over this
(after all, they miss out on the expenditures as much as the revenues). "Lose"
is really the wrong way to put it: it wasn't theirs to begin with.

------
PunchTornado
Can't google just block installs from websites in a future android update?

I don't want my kid to install apps from websites...

~~~
wvenable
By default it is blocked although it's usually one of the first things I turn
off. I always have at least one or two apps that aren't on the play store.

I hope that Google doesn't block this feature and turn entirely into a walled
garden.

~~~
freedomben
As soon as they do, they die with users like me. I am pretty tolerant of the
eco-system lock in because I can so easily opt-over the wall when I want to.
If they change that, I'll go to the next platform that respects my ability to
make choices for myself, even if they don't match what some people in power in
California thinks I should choose.

~~~
wvenable
If they make that change, there won't be another platform to jump to.

