The month of May brought with it plenty more mobile marketing news. Keep reading to hear our round-up of last month’s top industry updates.
Netflix Gaming Platform
It’s looking likely that Netflix is soon to be expanding its offering into gaming after multiple reports that the company has been looking to hire a new executive for the job. Rumors suggest that Netflix is building a “bundle” gaming platform similar to Apple Arcade. They also suggest that the games will be ad-free just like Netflix’s film and TV offerings.
The speculations around an Apple Arcade like model also offer forth the idea that the gaming platform will include both licensed Netflix IP as well as indie games from third party developers.
None of the rumors have been confirmed by Netflix, who have stayed quiet on the subject apart from revealing they’re “excited to do more with interactive entertainment”. They’re keeping their cards close to their chest, evidently.
Considering that Netflix already appreciate the value of video games, evident from the numerous shows they’ve produced based on video games, e.g. The Witcher and Resident Evil, it would make sense that they’d start to reverse engineer the process. Instead of waiting for the video games to create the series, they can produce video games from their own series or produce video games first to turn into series themselves. It’s a great marketing strategy, especially taking into account that Netflix has a whopping 208 million global subscribers.
Netflix already has a proven track record with interactive entertainment through their interactive shows such as Bandersnatch (an interactive episode of Black Mirror), You v. Wild and games based on Stranger Things, To All the Boys and La Casa de Papel.
It seems that Netflix’s overall plan for the gaming platform is still to be determined precisely. There seems to be no official approach as of yet, but they’re certainly making headway.
Will Apple Compete with Samsung over Foldable Smartphone?
Ming-Chi Kuo, analyst, claimed that Apple is working on a foldable iPhone with the intention of releasing it in 2023. This would be the first of its kind for Apple. The rumors project that Apple will ship between 15 – 20 million units of the phone in its first year alone.
Kuo predicts that the foldable iPhone will have an 8-inch display.
Samsung is the current market leader for foldable iPhones.
Kuo’s insights on the foldable iPhone more generally are that its purpose is to blend the smartphone and tablet in one device, but also become as they develop a smartphone-cum-tablet-cum-laptop three-in-one device. Apple is no stranger to cross-product devices.
Now that nearly every major smartphone manufacturer is releasing a contender to Samsung’s foldable iPhone, why would Apple not join in?
There’s plenty of criticism surrounding the rumors. Apple is not usually a brand to give into trends. Take touchscreen laptops, for example. Nearly every leading laptop manufacturer has one…except Apple. Because Apple is particular about which products it chooses to develop and release, opting only for the best of the best and avoiding gimmicks. And foldable phones are not necessarily a magical product without any issues. They cost a lot of money and are often more prone to breaking than your average smartphone.
However, despite all of this, would Apple be willing to get left behind? Foldable smartphones are the perfect way for brands to show off their capabilities and one-up each other. Apple could easily join in the battle.
Xiaomi, Vivo and OPPO will all be releasing contenders to Samsung’s foldable models this year. Samsung are already expected to launch the third generation of their models, Galaxy Z Fold 3 and Galaxy Z Flip 3.
Epic Games vs Apple Court Battle
Epic Games, the owner of video game Fortnite, has taken Apple to court this year for having a monopoly over the mobile gaming marketplace.
Fortnite tried to give iPhone users a discount on in-app purchases if they completed the purchase outside of Apple’s own payment system. The bypass of Apple’s payment system would prevent Apple from taking its 30% commission. This violated Apple’s rules, leading Apple to ban Fortnite from the App Store.
Epic’s Founder and CEO, Tim Sweeney, then decided to sue Apple in federal court in Oakland, California. He claimed Apple is a monopoly that abuses its power.
What will happen as a result of the trial?
There are two possible outcomes with drastically different consequences. If Epic comes out as the winner, the entire app market ecosystem as we know it will shift. It will offer another route for millions of companies to also bypass the 30% of their app sales that goes to Apple, while also strengthening the fight against Apple’s control. On the flip side, if Apple reigns supreme, it will further strengthen its control over the app market and make it harder for companies to stand up against it going forward.
The entire trial will revolve around the legal debate of whether Apple is a monopoly. The fact of the matter is that iPhones are necessary to reach customers, and Apple forces app developers to use its own payment system and pay its fees without a viable alternative, which is unfair. That’s Epic’s argument, whereas Apple’s legal defense is that iPhones are only one way to reach customers and its fees align with industry standards.
Epic released Fortnite on the App Store back in 2018. In just two years, Epic earned around one billion dollars from Fortnite and its other iPhone apps. However, 30% of that sum went to Apple.
Epic isn’t the only company to voice concerns over Apple’s control of the market or the App Store fees, but it is one of the only ones with enough money to challenge Apple in court. It has been valued at an epic (pardon the pun) $29 billion. Although that’s a staggering number, it still pales in comparison to Apple’s $30 billion revenue in a single month. The $29 billion does, though, allow Epic to dedicate hundreds of employees to work on the court battle, as well as the law firm Cravath Swaine & Moore and a PR consultant.
Epic would like for Apple to provide a competing marketplace for iPhone games where companies can use their own payment systems. Apple’s response was inevitably one of disagreement. It refused to agree to turn the App Store “into a public utility”. After all, the company has spent billions developing iPhones and the App Store, so their commission fees are just one of the ways they replenish their investment and monitor the space to keep it safe for both developers and users.
When Epic first sued, Apple changed the commission rates by dropping to 15% for developers that make less than one million dollars on app sales. Most app developers fall under this category, actually 98% according to Sensor Tower. Despite this, more than 95% of Apple’s app revenue comes from the other 2% of companies that pay the full 30% commission.