Financial News
Written by: Galois
2020-11-08 10:00
Last update date: 2020-11-08 10:00
Last week, the video game industry suddenly broke a piece of news that attracted high attention from gamers around the world. The headline was "Epic Games may return to Apple's iOS platform with a backdoor." This news is naturally relevant to the protagonist of the story, Epic Games (Epic), but In fact, it also has far-reaching enlightenment for the global game market worth hundreds of billions of dollars.
If Epic can bypass the traditional AppStore and return to the iOS and iPadOS user groups, the huge commercial interests in the global game market may need to be redistributed, to different degrees for Apple, a large number of game vendors, and Nvidia, which provides a bypass for Epic this time. Impact.
Nvidia has developed a new version of the GeForce Now cloud gaming service, which means that Apple users can replay games that were removed by Apple, such as Epic Games.
(Nvidia co-founder Huang Renxun, FACEBOOK picture)
According to the foreign media report, graphics chip (GPU) developer Nvidia has developed a new version of the GeForce Now cloud game service, which can be used in the browser Safari on iOS and iPadOS, which means that Apple users can play again until they are downloaded by Apple. Rack games such as Epic Games.
If the report is true, Apple's wishful thinking to block Epic will be difficult to start.
Although it is still unclear how Apple will respond, Nvidia is definitely one of the big winners in this matter. It has established a cloud gaming channel for game companies for more than 1 billion Apple fans. I believe it will be announced on November 18. The third quarter performance increased momentum.
The business grievance between Apple and Epic can be said to be the reality version of the Romance of the Three Kingdoms in the game industry, involving the interests of large App platforms, cloud data providers, game publishing, equipment, and developers. Almost countless tech giants such as Apple and Microsoft , Tencent, Google, Nvidia, Amazon, Sony, Nintendo, and all game companies are involved. Such a complicated relationship requires a commercial dispute between Apple and game company Epic.
Epic sues giant David Goliath
In August this year, Epic’s game was taken down by Apple for violating the iOS application rules. On the same day, Epic filed a lawsuit against Apple and Google’s two major App platforms, accusing Apple of monopolizing the payment method for iOS in-app purchase services and depriving all App developers of iOS in-app purchases provide any opportunity for innovation. Just a few days before Epic filed a lawsuit against Apple, the company had just launched a new round of financing at a valuation of $17.3 billion, but it pales in comparison with Apple's $2 trillion market value. No wonder the outside world has described it. This lawsuit is a contest between David and the giant Goliath.
Epic protested that Apple would split 30% of app developers’ first-year revenue. The proportion of fresh water was too high. After that, the annual share was at least more than a certain percentage. This puts a heavy burden on developers with fierce competition and shorter game cycles. One or two chicken-eating games that are popular with players, the game business is like a treasure, hoping to continue the successful business myth in the form of a series of games, so Epic has always tried to bypass the Apple App Store and Google Play store payment systems in innovative ways. It can expand the player base, and the second makes the charging method more business flexible, but its attempts have been stifled by Apple.
Epic has launched a lawsuit against the two major App platforms, Apple and Google.
(Profile picture)
However, as a representative of game developers, Epic is not a general one in the industry. It released the classic game Fortnite (Fortnite or Fortress Hero) in 2017. So far, the number of players has exceeded 350 million, making it the most popular game in history. One of the popular game series.
Although most of Fortnite players are not iOS and iPadOS user groups, but users of other game equipment vendors such as Sony PlayStation and Nintendo Switch, Epic is willing to divide the game revenue into equipment vendors because they need to invest resources in hardware. Every game console sold on the Internet loses one, but Apple does not need to sell at a loss when selling hardware such as iPhone, iPad or Mac computers. There is no reason to deprive developers of business opportunities to design innovative fee payment methods.
Fortnite (Fortress Night or Fortress Hero), the number of betting players so far has exceeded 350 million, making it one of the most popular game series ever.
(Online picture)
In fact, Epic dared to challenge the giant Goliath and set off a battle against Apple and Google. The shareholders and the industry behind it are also a huge community of interests. Tencent, which holds 48% of Epic’s equity, is already the world’s largest game publisher. It is firmly seated in the world's largest game market—the No. 1 in Mainland China, while other publishers such as Microsoft, Sony and Nintendo hope to use Epic’s victory to enter the Apple user group with great development potential.
These tech giants deeply understand that in the business world of online games, being able to build a broad player base is the key to business success. Therefore, the roles of the stalker and the hunted are reversed at any time, and David may not be defeated by Goliath.
Apple Google pressured, Nvidia stock price soared
In fact, the share system of Apple and Google has been controversial. It is estimated that the two major technology giants have felt a certain degree of public opinion pressure. There are rumors that Apple is studying the cancellation or reduction of the share ratio. This rumor has become another factor in the recent pressure on Apple's stock price.
Apple’s regulatory document submitted to the SEC on the 30th of last month stated: “If Apple reduces the application software revenue share in its service business, or exempts some applications from the 30% share, or even cancels it completely, it may be detrimental to finances and operations.”
Apple’s revenue sharing to App developers is an important source of revenue for Apple’s services. This part of the business generally includes iTunes, online entertainment libraries and software, digital content, AppleCare, Apple Pay and licensing.
According to Apple’s fourth quarter results announced at the end of last month, Apple’s services’ quarterly revenue was US$14.55 billion, an increase of 16.3% year-on-year, accounting for 23% of overall revenue. In the past few quarters, Apple’s services accounted for more than 20% of overall revenue, especially the iPhone. 12 failed to catch up with the launch in the quarter, dragging down Apple's total revenue in the fourth quarter to only grow by 1%. Apple services have become an important pillar supporting Apple's revenue.
Screenshot of "Remnant: From the Ashes" (Remnant: From the Ashes)
Regardless of whether Apple and Google will be the losers in the Epic lawsuit, Nvidia will find another way to help sales of its game and data business. It also provides a custom processor for the Nintendo Switch video game console, which may become the peak holiday season. Bestsellers.
Nvidia's stock price has risen for five consecutive days in the past week. It is one of the few strong stocks in the Nasdaq. It closed at $582.48 on Friday, which is close to a historical high, and has risen 170% in the past year.
The only worry is that there will be major adjustments after the recent announcement of good performance in technology stocks, and it may enter the market before Nvidia announces its quarterly results or face the risk of catching up to the middle.
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