(Bloomberg) -- Thousands of games are featured on Apple Inc.’s App Store under the same “freemium” model used by Fortnite, a senior executive at the iPhone maker testified, signaling that the outcome of a lawsuit brought by Epic Games Inc. could have broad ramifications for other game developers.
Phil Schiller, Apple Fellow and former senior vice president of worldwide marketing, disclosed Monday that 17% of the estimated hundreds of thousands of games on the App Store are in the freemium model, meaning the games are free to download but include in-app paid upgrades. That’s the category of game Fortnite is in. The trial was sparked after Apple removed Fortnite from the App Store for replacing Apple’s in-app-purchase system, which takes up to 30%, with its own in-house payment solution.
Schiller said 75% of the games are free downloads, while 6% require a payment to download.
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Epic sued Apple last year amid a backlash against the technology giant-- with billions of dollars in revenue on the line -- from global regulators and some app developers who say its standard App Store fee of 30% and other policies are unjust and self-serving.
In his testimony Monday as Apple’s first witness, Schiller discussed the development of the company’s Small Business Program that slices the App Store commission in half from 30% to 15% for developers who generated less than $1 million in revenue during the previous calendar year.
Schiller said that about 90% of developers qualify for the program, but that only tens of thousands of developers have joined it, which required an application and approval process. Schiller said he pushed for a revenue split lower than 15% for those developers, but that he got pushback from the company’s anti-fraud team. He said the team was concerned about money laundering and fraud from the program.
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