Epic Games to Charge 12% Fee for App Sales From Alternative iPhone Store

Epic Games in February said that it would launch an Epic Games Store on the iPhone in the European Union, and today the company held an event at the Game Developers Conference (GDC) to provide additional information on the upcoming store debut and the fees that it will charge for apps distributed through its marketplace (via 9to5Mac).

For games distributed through the ‌Epic Games‌ Store, Epic will collect a 12 percent share of revenue, which is the same fee that it charges on Windows and Mac machines. Apps will get 100 percent of the revenue they earn for the first six months, with Epic taking no cut, and there are no fees for apps that offer in-game purchases and use their own payment processing method.

A game sold through the ‌Epic Games‌ Store will need to pay both Epic's 12 percent fee, and Apple's 0.50 euro Core Technology Fee (CTF) for each "first annual" install after one million installs. Apps distributed through the App Store under Apple's updated EU business terms will pay the CTF and a commission of 10 to 17 percent, down from the standard 15 to 30 percent cut that Apple takes.

‌App Store‌ apps making under $1 million annually will pay 10 percent under the ‌App Store‌ Small Business Program, and that's also the fee that Apple charges for subscriptions that customers keep for over a year. More successful apps earning over $1 million and new subscriptions are subject to a 17 percent fee. Note that Apple also charges an additional three percent fee for using the in-app purchase payment system, so developers who distribute through the ‌App Store‌ and use in-app purchases will pay 13 to 20 percent.

As an example, an app with fewer than one million downloads that is distributed through the ‌App Store‌ under the new business terms would pay the CTF and 10 percent fee, a total ultimately lower than the CTF + 12 percent fee that the ‌Epic Games‌ Store would collect. From ‌Epic Games‌:

"The Epic Games Store has a 88/12 revenue split for developers who distribute paid-for apps on PC and Mac and that will continue on mobile platforms. Developers do not pay Epic anything to distribute free apps. If developers offer in-app purchases, they can choose to either use our payment processing system with the 88/12 revenue share or use a third party payment processor and keep 100% of that revenue, just like they do today."

‌Epic Games‌ CEO Tim Sweeney has called Apple's EU changes and fees a "devious new instance of Malicious Compliance" and has promised that ‌Epic Games‌ will continue to "argue to the courts and regulators that Apple is breaking the law" even as it prepares to launch the ‌Epic Games‌ Store.

The ‌Epic Games‌ Store is set to come to the iPhone in the European Union before the end of 2024. It will not be available in the United States and other countries.