Today, when we think of some of the biggest names in the game industry, Sony, Microsoft, Activision-Blizzard or even Nintendo come to mind.?
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However, Apple has managed to earn more money from gaming than the operating incomes of all these four gaming companies combined, in 2019.
As reported first by the Wall Street Journal, Apple¡¯s operating profits from games in 2019 totalled $8.5 billion, (based on WSJ analysis), exceeding the other four companies¡¯ combined gaming operating incomes in the same year.?
This revelation was made during the recent antitrust trial against Apple. The exorbitant revenue was made possible thanks to the 30 percent cut it received from the developers on the games sold on its App Store. The report highlighted that it had a massive market share of over 55 percent along with really high-profit margins.?
Apple further stated that the claims were not exactly that and the actual figures were actually much higher than that. According to the report, gaming-based figures was around $2 billion more than the operating profit generated from games during the same year by Sony, Activision, Nintendo and Microsoft. Data from other gaming companies were taken from company filings, whereas an analyst estimated the revenue figures for Microsoft.?
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This is due to the fact that operating margins discussed in the trial didn¡¯t include numerous joint costs that were associated with the App Store. The analysis included all of the game-related revenue but just a small section of the possible costs.?
According to analysts, gaming makes up the bulk of App Store revenue, based on data from Sensor Tower that estimated Apple received $15.9 billion in revenue from the App Store for the year -- 69 percent of this figure was from gaming. Data from court proceedings revealed App Store had an operating profit of $12.3 billion for the year -- a fifth of the total operating profit.
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In the ruling of the Epic-Apple lawsuit, judge Yvonne Gonzalez Rogers highlighted that while Apple enjoyed a considerable market share of over 55 percent and extraordinarily high-profit margins, Epic failed to prove that Apple was an ¡®illegal monopolist.¡¯ Epic Games has now appealed the decision.?
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