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Not Having ‘Fortnite’ Could Cost Google at Least $50 Million This Year (Analyst)

When Epic Games brings its hugely popular battle royale game “Fortnite” to some Android smartphones and tablets later this month (it’s currently available on select Samsung devices only), it won’t distribute it on Google Play. Fans can download the game directly from Epic’s website instead, and market intelligence company Sensor Tower said that move could cost Google at least $50 million in platform fees this year.

In a recent Q&A, Epic said it believes gamers will “benefit from competition among software sources on Android.” Plus, distributing “Fortnite” on its own lets Epic avoid Google’s 30% cut.

“Avoiding the 30% ‘store tax’ is a part of Epic’s motivation,” said Epic Games CEO Tim Sweeney. “It’s a high cost in a world where game developers’ 70% must cover all the cost of developing, operating, and supporting their games. And it’s 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.”

“Fortnite” launched on iOS in March and it’s made more than $180 on that platform so far. Apple has made more than $54 million from the game via its own 30% cut of all in-app spending, Sensor Tower estimates. Once “Fortnite” is widely available on Android, Sensor Tower expects its launch revenue will closely mirror the first several months of the App Store.

“There is a chance that it will even surpass what we’ve witnessed thus far, based on factors such as the game’s increasing popularity, the growing impact of each new season’s Battle Pass on revenue (these release every 10 weeks), and the potential for players in countries where both Google Play and the iOS version are not available to directly download the APK and spend in the game,” said Sensor Tower head of mobile insights Randy Nelson.

“There is some concern that by circumventing Google Play, Epic may potentially make it more challenging for users to install ‘Fortnite’ on devices running older Android versions, where side loading of apps isn’t as straightforward as in more recent releases,” he said. “We expect this to have some impact on downloads of the game, but not to a large enough degree as to affect its revenue potential in the long run.”

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