The court ruling breaks Apple's "commission wall," and mobile game developers will reclaim $19.5 billion in revenue in the future

The Zhitong Finance APP noted that mobile game developers may gain billions of dollars in additional revenue this year due to a court ruling that allows them to escape the constraints of Apple's (AAPL.US) App Store rules.

Industry analysts at Aldora Intelligence, led by Joost van Dreunen, estimate that $4.1 billion in revenue will shift from Apple to developers based on data from the top 25 mobile game publishers in 2024. This means that a significant amount of money spent annually on virtual currencies and items in games will flow more into the pockets of mobile game creators.

With the reduction of online sales commissions, developers will earn more revenue.

As a result of the long-standing dispute between Epic Games, the developer of Fortnite, and Apple, U.S. District Judge Yvonne Gonzalez Rogers ordered the iPhone manufacturer last month to allow developers to sell goods outside of the Apple Store. The App Store charges a commission of 15% to 30% on most transactions.

Wedbush Securities analyst Michael Pachter stated that developers could earn up to $19.5 billion more in the coming years, money that would have otherwise gone to the App Store. Game companies may use these funds to attract new players, who may spend more on digital goods such as items that help advance the game.

Pachter said, "These developers will earn more because Apple will earn less; that's just how it goes."

Some developers have already begun offering incentives to guide players to make external purchases bypassing Apple. In 2020, Apple removed the popular shooting game Fortnite after Epic Games linked to a site offering discounts on V-Bucks virtual currency.

Adam Smart, global product director at market research firm AppsFlyer, stated, "Apple has always had this concern: if you offer discounts on purchases outside the App Store, they will take down your app."

Aldora estimated in a report on Wednesday that the commission rate mobile game developers pay to the App Store will decrease by one-third to around 20%.

Aside from Epic Games and the occasionally vocal Microsoft, mobile game developers have been reluctant to discuss the impact of commissions on their business. Major publishers such as Take-Two Interactive Software, Electronic Arts, Roblox, Scopely, and Supercell, a subsidiary of Tencent Holdings, have all declined to comment on the court ruling.

Microsoft, which owns King’s mobile gaming business, announced plans last July to open its own store, but that plan has been delayed. Microsoft stated in court documents that the company has been "hindered by Apple." Take-Two (TTWO.US), which achieved mobile business revenue of $730 million last quarter, has created web stores for popular games such as "Empires & Puzzles" and "Zynga Poker."

The company's CEO Strauss Zelnick told analysts during a recent earnings call that its direct-to-consumer store "has become an important and substantive part of the business." He added that recent rulings reflect a trend towards a more open app distribution ecosystem—"which is a positive signal for us."

Like other mobile game publishers, Zynga experienced a downturn in the early 2000s. After Apple implemented privacy policy changes in 2021, it became more difficult for mobile game developers to find app audiences, leading to an overall industry revenue decline of 7%.

The rulings will benefit not only app developers. Payment management companies like Xsolla and Stash have established direct-to-consumer web stores for mobile gaming companies, charging commissions that are much lower than those of app stores.

Xsolla has created a calculator on its website that allows developers to calculate the additional revenue they could earn based on the proportion of business they shift from Apple to its payment system, which charges a 5% fee.

Stash co-founder Justin Kan stated, "This is a competitive industry vying for the same customers," adding, "If there's a way to significantly change profit margins, you can't ignore it."