Published on the 08/08/2018 | Written by Pat Pilcher

Local game industry looks on in awe, announces stellar predictions…

Epic, makers of the hit game, Fortnite, have flipped the bird at Google announcing they will release the Android version of the game on their website instead of via Google’s app store.

Epic’s decision appears to be financially motivated as Google takes a 30 percent cut on all downloads and in-game purchases. Given the sheer momentum of Fortnite, which generated US$318 million (NZ$472.3 million) during May 2018 alone, it has enough critical mass to continue to sell well, outside of the Google Play marketplace.

Releasing a game outside a mobile app store is an unusual move for a game developer. The platform is ubiquitous on all android devices (which is under examination after Google’s recent fines in the EU), it enjoys massive user traffic and apps must undergo quality testing so user trust is high. But 30 percent is a significant chunk so alternative apps marketplaces are a likely eventiality, and Epic has been emboldened with its success to date on other platforms.

Fortnite, is a multiplayer hunger-games style shooter, which has up to 100 players leaping out of a plane, landing on a small island. They fight each other until only one player is left. Items like weapons and wacky outfits get scattered around the island. As the game progresses, available land shrinks, forcing players closer until the last survivor is declared the winner.

The game hit the market a year ago as a free download for PCs, consoles and Mac. Its massive popularity stems from it being a free download that’s fun to play chatting with your mates across town. Offbeat in-game humour includes lots of wacky items plus the costumes. Players can also perform dance moves in-game. Fortnite has developed a strong following with gaming YouTubers and streamers playing live to millions of fans. Since its launch, Fortnite has brought in more than US$1.2 billion (NZ$1.8 billion) in revenue from in-app purchases such as costumes and dance moves. At the current monthly run rate, and an Android release poised, that is set to increase exponentially.

So will other developers follow Epic and dump Apple and Google’s app stores? How is the A/NZ gaming industry faring in grabbing a share of the gold?

According to Michael Vermeulen, NZGDA chairperson & lead game designer at Aurora44, the New Zealand game developer scene is growing fast: “A few years ago we said we believe that we can build our industry into a NZ$1 billion industry in 10 years. We’re now two years down the track, and I still strongly believe we can make this goal. We just need the right support and the right people. So far we’ve proven that we have the right people, and the government has noticed.”

According to a recent industry survey, the NZ game development industry generated NZ$143m last year, growing at a healthy clip with revenues up 43 percent on the previous year. Employment in the sector also rose 10 percent with NZ game development studios employing 550 full-time staff.

In Australia, a similar survey published in January by the Interactive Games & Entertainment Association said Australia’s gaming development industry employed 928 people full time, with 2016-17 FY revenues of A$118.5 million (NZ$130 million), 80 percent of which is derived from exports. The industry is also predicting rapid growth with 38 percent expecting to significantly increase revenues over 2018.

While Epic’s rumble with Google is unfolding in the US, it could have significance for local game developers as mobile gaming accounts for 44 percent of NZ games developer studio revenues, or NZ$63 million last year. 44 percent of Australian studios develop games specifically for Android. The app marketplaces are both a key sales channel and a significant cost.

That said, Vermeulen believes few developers will follow Epic to side-step mobile apps stores. “Epic Games is a subsidiary of Tencent, who recently acquired a majority stake in Grinding Gear Games in Auckland. Tencent is the largest games publisher in the world and also invests in many other industries. They control a very large portion of the Chinese games market. Basically what I’m saying is, they are able to sidestep Google and Apple because they are a massive company.

“Most developers don’t have the opportunity or influence to do that. In addition, most people playing games on mobile devices would still be getting their games and apps off the app stores, whether that’s out of convenience or trust. Cutting out the Google and Apple platforms wouldn’t be beneficial for most developers.”

Moving away from app store downloads could also lead to significant security headaches. Smelling an opportunity to make some easy money, cybercriminals could seek to develop fake versions of Fortnite (and other non-app store game titles). Given the lack of anti-malware apps installed on smartphones, this could, in turn, drive up the incidence of mobile malware and smartphone-related cybercrime.

With this reecent move, however, Tencent must also be assessing the opportunity to extend the direct model to others in its stable, and most likely, others.