Apple says it’s competing with PlayStation, Xbox and Nintendo – News Couple

Apple says it’s competing with PlayStation, Xbox and Nintendo

On Friday, the company said in a regulatory statement that Apple products compete as gaming platforms with Sony PlayStation, Microsoft Xbox and Nintendo.

Previously, Apple only said it competed against Google’s Android in smartphones and Microsoft Windows in PCs to attract developers’ interest.

Apple’s competitors were an important topic in a high-profile antitrust trial with Epic Games earlier this year, in which Apple argued it did not have a monopoly because its App Store competed with other gaming platforms that also offered Epic’s Fortnite, an Epic Apple app that is banned from its store.

At the time, the company did not list gaming hardware as competitors in its SEC filings.

Ultimately, the judge ruled that Apple had no market monopoly over “mobile game transactions,” but ordered the company to change its business practices and allow developers to link to payment methods that Apple doesn’t manage. Epic Games and Apple are appealing the ruling.

The update in Apple’s annual filing also reflects how much money the company makes playing games on its phones and tablets.

According to the court ruling in the Epic Games trial, about 70% of all App Store revenue comes from game apps, which are generated by less than 10% of App Store users.

Apple is also increasingly working to meet the needs of players in product decisions. In September, Apple released new iPhone 13 Pro models with screens that can increase the refresh rate, which is a popular feature among gamers.

Apple App Store sales totaled $64 billion in 2020, according to a CNBC analysis. The Wall Street Journal reported earlier this month that Apple makes more money from games than companies like Microsoft, Nintendo, Activision Blizzard and Sony.

Risks from government legislation and investigations

Apple warned investors in its annual filing that it may have to make more changes to its App Store, which could reduce the number of apps downloaded and reduce the commission Apple charges.

The company said in filing with the Securities and Exchange Commission that Apple “is also subject to lawsuits and investigations related to the App Store, which have led to changes in the company’s business practices, and may in the future lead to further changes.”

Apple gets between 15% and 30% of paid software downloads, in-app purchases and subscriptions sold by third-party apps on its App Store.

Apple’s App Store is part of its services business, which reported $68.43 billion in sales in the company’s fiscal year 2021, a 27% increase from the previous year. Apple does not split revenue from components in the Services, which also include subscriptions, extended warranties, and advertising.

According to Apple’s filing, sales in its services business increased last year primarily due to growth in ads, the App Store, and the cloud. But Apple has warned that its advertising business could be hurt by increased scrutiny of other technology companies.

“For example, the company obtains revenue from licensing arrangements with other companies to provide its search services on the company’s platforms and apps, and some of these arrangements are currently the subject of government investigations and legal action,” Apple said in the filing.

Although Apple did not name Google, it has a lucrative licensing agreement under which Google will be the default search engine on iPhones. The Department of Justice cited “general estimates” that Google pays Apple between $8 billion and $12 billion annually as part of this deal as part of an antitrust lawsuit against Google.

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