Apple is not a gaming company. It never was, and never will be.
What it does, is only providing the platform where games can be played and shared.
But this business is reportedly on top when it comes to revenue.
Despite not developing consoles or major game titles of its own, The Wall Street Journal reported that Apple made $8.5 billion in operating profits from gaming in 2019. According to the post, this is more than Nintendo, Sony, Microsoft, and Activision Blizzard combined.
Apple earned that much money from providing third-party games a place in its App Store, by taking a $30 cut from each and every purchase made by users.
The news came to light following the lawsuit between Epic and Apple, which brought many details about Apple's operations, due to the vast amount of evidence surfacing during discovery and subsequently being submitted to the court.
The report claimed that the gaming-based figure is approximately $2 billion more than the operating profit earned during the same 12-month period by gaming heavyweights like Sony, Nintendo, Microsoft, And Activision Blizzard.
The data provided is based on companies' filings, while Microsoft's figure was from an analyst estimate.
Taking into account data from Sensor Tower, it's estimated that Apple received at least $15 billion in revenue from the App Store for the year, and that 69% of that figure derived from gaming. Using data from the court, it was implied the App Store had an operating profit of $12.3 billion for the year, accounting for almost a fifth of the overall operating profit.
Because of this, Apple is considered a major force in gaming, due to the fact that a bulk of its App Store revenue is made from people doing in-app purchases.
But during the trial, Apple said that the discussed operating margins were not right and were higher than reality.
Apple told the publication that the operating margins discussed in the trial were produced from analysis that didn't take into account numerous joint costs associated with the App Store.
As a result, the analysis included all of the game-related revenue but only a tiny fraction of the possible cost Apple had to spend during the period.
Regardless, Apple achieved this thanks to its significant 30% cut, which it takes from all purchases on the App Store. The cut is among the largest in the games publishing world, and it is something that Fortnite-maker Epic Games want to see change.
Epic Games claimed that Apple a monopoly over how software is sold on its devices by forcing developers and publishers to use its own in-app purchasing system.
During the trial, Apple pointed out that other platforms like Google’s Play Store use the exact same system.
While the Judge agreed with Apple, they did force the tech giant to offer other payment methods inside apps.
On September 10, Judge Yvonne Gonzalez Rogers' ruling noted that Apple did enjoy "considerable market share of over 55% and extraordinarily high profit margins," but Epic Games failed to prove that Apple is an "illegal monopolist."
While gamers reportedly spend an increasing number of money on App Store in 2020 and beyond, it should be noted that the earnings mostly come from users in China and the U.S. (31% and 26%, respectively).
The top 1% of these mobile gamers made up for over 64% of sales on the App Store, spending nearly $2,700 each year.
Going forward, Apple is expected to see less revenue, as the Chinese government has set a limit on how children can play online games.
