Apple's App Store dealt blow by judge in the Epic antitrust case
Shares of the major video game companies jumped Friday after a judge ruled that Apple Inc. must give apps the option of directing customers to alternative payment methods.
The verdict would allow game makers to bypass Apple’s 30 per cent fee and use cheaper payment processors, which should boost profit margins. Epic Games Inc., the privately held maker of Fortnite, filed the lawsuit against Apple, and the iPhone maker countersued.
Epic’s rivals would all benefit from the change if it’s upheld in a possible appeal. Zynga Inc., which makes Words with Friends, surged 9 per cent in intraday trading. Activision Blizzard Inc. and Electronic Arts Inc. rose more than 2 per cent. U.S.-traded receipts of France’s Ubisoft Entertainment SA also rose, and Take-Two Interactive Software Inc. erased most of its loss from earlier in the day.
The largest game publishers have shifted substantial portions of their budgets to mobile projects in recent years. EA makes some of the biggest smartphone games, including ones based on the Simpsons and Star Wars franchises, and spent more than US$2 billion in April to acquire Glu Mobile, which makes a Kim Kardashian game. Activision’s Candy Crush games generate US$1 billion or more annually.
Investors won’t see the fruits of Friday’s court ruling immediately, said Michael Pachter, an analyst at Wedbush Securities. Games will need to be retooled to accommodate alternative purchase mechanisms, he wrote in an email: “This is complicated stuff.”