Here's How You Capitalize From the Apple vs. Epic Court Ruling

Epic versus Apple, what's going to happen next? On this topic, we got two amazing guests discussing. So, returning guest from 12 hours before when we recorded our last podcast, Eric Seufert, founder of MobileDevMemo and a growth expert. Is that a correct way or or media strategist? Yeah, that's fine. That That's okay. I That's That's how I describe myself. Yeah, aspiring stand-up comedian and a pretty good DJ. Yeah, that's That's probably the best way to to describe. Uh and then, for the first time, we got Chris Hewish, president of Xsolla, joining the podcast. Welcome, Chris. Thanks, Misha. Thanks, Eric. Pleasure to be here. Awesome. So, let's just dive in and talk about what has happened. Now, the legal case between Epic Games and Apple is arguably one of gaming's biggest storylines from the last few years, and we've definitely been covering this on the podcast methodically. So, it all began just in August of 2020 when Apple removed Fortnite from the App Store following

the violation of Apple's in-app payment policy. The case has progressed actually really quickly, especially during the COVID times. Uh it focused on the Epic's argument of Apple's iOS business practices and stating that they're anti-competitive and filled with insist inconsistencies and touting a monopo- mono- monopolistic approach to mobile's most dominant ecosystem. I can hear that I'm not not native English. Anyways, as of last week, only 13 months later, Judge Rogers issued a permanent injunction resulting in two key takeaways for the for the uh for the tech giants. So, for Apple, the company must allow iOS apps to offer payment options beside the ones subject to Apple's 30% fees within the next 90 days, and I think we're like 10 days deep already. Essentially, these payment methods link outside of the core app experience. And for Epic, according to the verdict, Apple's business practices are not monopolistic. Epic must pay

Apple 30% of the revenue gained from their non-App Store approved payment methods, which totals around 3.5 million. Not going to break the bank for for Epic. And Fortnite will continue to be banned indefinitely due to a breach of contract. So, reading through these two verdicts, Epic definitely lost. But let's let's talk about let's talk about this. Eric, was this an unexpected ruling? Um no, I don't think it was unexpected. I think, you know, my get my sense was that the general consensus going into this, and probably even from the very beginning, was that Epic was not going to be successful um in getting what they wanted, right? They wanted specific things. They wanted the Epic Store on iOS. They wanted alternative payments for Fortnite in Fortnite in the app. And and they wanted to, you know, a a host of other things. They they kind of had sort of 10 a list of 10 things that they that they wanted. Um

and and that they were, you know, using the legal legal process to sort of um to to to try to to to sort of uh force Apple to grant to them. And, you know, ultimately they sort of got nine of those 10. Or sorry, they they didn't get nine of those 10, right? The the sort of the the judge ruled ruled against them on nine of those 10 counts. Now, the suit always seemed kind of weak to me, and I think to most people that I spoke to about it. It In reality, I don't, you know, it it felt a bit phony that, you know, this idea that they were out there fighting for the little guy, fighting for, you know, the the sort of uh the the sort of universe of developers that that can't stand up to Apple while they can. I mean, they really they just wanted to make more money. And I mean, that's that's evidenced in the the the sort of the large penalty that they had to pay to Apple. That penalty wasn't pulled out of thin air. That was the money that they made in that period when they had that alternative payment system in Fortnite. So, obviously there's a ton of money at stake, right? So,

I think most people, I believe, you know, kind of most reasonable people that I spoke to, you know, kind of people that are plugged in, thought that Epic would not be successful. They were not successful. Um now, what was maybe surprising, and I think, you know, it it was it was kind of shocking that the judge um issued that injunction. So, the injunction is is kind of separate from the ruling. The injunction was a specific thing that says, "Hey, Apple, you must allow app developers to include a link in their apps to um to payment systems, right? You must You must uh allow app developers to make users aware of these alternatives for payment because otherwise, you know, you're steering them into your you're steer literally steering them into your the the sort of sole payment system that you make available to them." Um but, you know, that already was kind of happening, right? So, we had, you know, uh 2 weeks before that or over the period of 2 weeks before the ruling, we had kind of three separate um moments when App Store policy was was was changed through regulation or changed

through some kind of settlement, right? We had the class action lawsuit that was filed against Apple um you know, by a class of app developers where uh you know, wherein um they agreed um to allow developers to communicate with with users um you know, even if the the sort of even if the contact details were were sort of sourced from the app. Which before that was not possible and and um it was just it it was kind of seen as a more of a gray area, but the the actual wording of the policy said you you may not do this. Um and then you had the South Korean legislation that said, you know, you know, these these companies must um offer up sort of alternatives. Um they can't they can't have total control over the ecosystems. And then you had the Japanese uh Fair Trade Commission which which uh they in a settlement Apple agreed to allow reader apps to have that link. Uh you know, one one uh link to uh sort of an alternative means of paying for you know, in-app content you know, outside of the app, right? So, not None of this was None of this

covered inside the Apple alternatives. That's That's never been sort of a consideration here. But, you know, things were moving in this direction. So, really what Apple what Apple's being forced to do in this with this injunction is take that concession that they already made as a result of the FTC the Japanese FTC investigation and make it applicable to all apps. So, including games, right? But, as we discussed in Twig yesterday, the App Store is the game store. Games are what is the the meat of the App Store. I mean, I think people get confused by you know, reader apps and talking about um Netflix doesn't have to use IAPs and all this stuff. And And yeah, that stuff's important, but the app the revenue that Apple makes from the App Store 70% games. And so, when you kind of think about it from that lens, you know, I I understand why they're sort of not just capitulating totally and saying, "Okay, well, alternative payments in the app, that makes sense." So, just sort of sort of just to kind of wrap this up and and kind of put a point on it. What happened with the injunction? I think that was kind of surprising if you had told me that that was going to happen in the very beginning of the trial, I would have said, "Wow, that's that's unexpected." I think, you know, going into this, you know, two a week ago, I

would have said, "No, that's that's already happening." So, maybe it happens in the injunction, maybe it happens with some other sort of like regulatory pressure, but we're already seeing movement in this direction. Um so, I I would say that yeah, just depending on when you ask me, yes, I would be surprised. Um but, you know, what what what has happened now is that people can link to alternative payment methods that don't exist in the app, right? So, we're not talking about anything in the app. There's no possibility to put alternative payments in the app. It's all out of app, and now developers can link to that from within the app and make users aware that they exist. Mhm. And Chris, I mean, Xsolla must be really really happy with this this decision because big part of your solution is offering those different payment system outside the existing mobile ecosystem, correct? Yeah, absolutely. You know, we're we're very happy with this decision. Um it's something we've been discussing and planning for for quite some time. And you may not know this, but we actually uh Xsolla handled payments for Epic when they had a standalone APK for Fortnite on Android.

Um so, we've been doing this from the beginning and we're now helping actually some really big companies leverage this decision to their advantage. Are there are a lot of companies moving to that direction? Like has has the Do I mean it's only been what? A little bit over than a week? Probably No, actually even less than a week since this injunction came in. Like is there being more inbound traffic? I mean, I saw your your your CEO tweet that we are hiring and linked to to this news newsletter. So, I would assume that this is very good for business. It is very good for business. And you know, interestingly a number of companies we've been working with for since well before this to put up uh whether it's crossplay games or top-up pages or whatever it might be on on the web. Um you know, so there's been some activity around this already. And we've seen extremely good results from it. Um but this just opens it up even further. I think, you know, what we're what we're seeing right now is a lot of companies that were on the sidelines who were big

enough, had the resources, and the you know, the desire to sort of monetize off the App Store, um but they were kind of unsure, they were scared of violating uh Apple's rules and guidelines and impacting their main business. Um we're seeing a lot of those companies now take their own internal legal reviews, get the green light, and now you know, are now coming and and looking for a solution to to take advantage of this. Got it. And by the way, you mentioned two services, crossplay and top-up. What What What do you mean by those? Sure. So, you know, crossplay is is when you have a game you take your game from the the App Store and you put a web version up, whether it's on a web page or it's a PC version, whatever it might be, and you have cross-play where players can play across the platform. And what that does is is it allows you to sell stuff on the web or on the PC version that actually goes into the account on mobile as well, right? So, that's tried and true, that's been done for a long time, that's always been

within the guidelines and and okay to do. And then you have top-up where you skip putting a game up on the web and you just put a page up there where you can offer currency bundles or, you know, whatever transactions you want where people can buy stuff on the web and it actually goes into their mobile account. Uh up until now, you haven't been able to steer players from your app to those web pages, right? You've had to reach out to them in different ways and and companies have been doing that. Um but now it's a legitimate easy way uh to actually let your players know about it and and drive a substantial amount of business that you don't have to then pay that 30% fee on. Got it. So, in terms of examples of games that do this, so Plarium Plarium's uh Raid: Shadow Legends, for example, has a PC SKU. You can download the client and you can play the same game on PC and, you know, if you're monetizing that, they probably take the good 95% of every every penny they get. And then, on terms of top-ups, if that sounds crazy to you, like, who does top-ups? Go to

Supercell store and check out. You can buy yourself uh anything in Clash Royale or any of the games and that is essentially what you mean by top-up pages. That's exactly right. Okay, perfect. So, totally legal elements that big companies are using as it is, but sometimes when we use these acronyms, we go like, what is a top-up page? What is a cross-play? And so forth. Uh anyway, let's switch gears a little bit, Eric, and and talk about, you know, the best way for developers to really capitalize on this because, as Chris said, now there's a lot of inbound traffic inbound towards towards yeah, to making most out of it as it's been greenlit to do this. So so what how should how should developers and publishers approach this? Well, yeah, I mean I have no doubt that um you know, Chris's phone is ringing off the hook. I think part of part of that um you know, that that action plan involves securing a payment provider. I mean this stuff is it sounds trivial, but it's it's it's not. Um right? And and the other thing is, you know, you've got to

figure out So there's a couple of things that are a little bit unclear and you know, Chris, I would love to hear your your thoughts um on on the specifics of the ruling cuz cuz if you read the ruling or the injunction, um it's written like it's it's written like like someone who has no real kind of uh you know, kind of practical operational knowledge of the App Store, but learned a lot about it, right? And some you know, uh made some decisions, right? It's not if if you would go and speak to another app developer in the way that the the injunction's worded, you would be you you wouldn't be making sense, right? It's It's written It's obviously written by an outsider. And so the way the way some of the things are worded are are awkward and clunky, right? So the injunction specifically says that, you know, you can include a link or Apple can interfere with, you know, the link or metadata buttons um that lead to some sort of alternative payment system. Now, there's no real clarity there on what that means, right? So there's a couple and I mean some some some questions that have come up in the

mobile dev memo slack are like one, okay, well, then can that be a web kit view? Can I pop a web kit view within the app? My guess is probably no, right? And my guess is you're probably safer having it off app anyway because if you think about the way that the App Store team is going to police this, well, anything in the app they can see, anything off the app they're probably not going to click out, right? And then go and view all the packages they're offering on some sort of website. So my guess is that you can't do a web kit view. But does it have to be like a text URL link, or can it be an actual, like they said, metadata buttons? I have no idea what that means. That's a meaningless phrase just But But maybe that means I can have a button that's skinned like the purchase button that leads to iTunes Connect for the payment processing. I can have it skinned exactly the same way, and when you click that, that pops that opens Safari or whatever and and goes to some sort of website, right? Where I'm where I'm selling stuff. So, that's a that's another open question. I feel like that's the kind of stuff that'll just get kind of like litigated through app rejections. You'll hear

about people on Twitter, "Oh, my app got rejected cuz I skinned the button and it's got to be a link." Apple's never going to clarify that. There's just They just don't do that, right? So, that's another open question. Um would love to hear your thoughts. So, what do you think, Chris? Yeah, I I totally agree with you, Eric. I think, you know, when I looked at this, I feel like there's a lot a lot of groundwork has been laid in with the idea that this is going to be litigated both in the courts through Apple's own sort of processes, and then also through just legislation, right? I think the judge sort of laid the groundwork, but as with a lot of rulings that happen in cases where there's new precedent and law that's kind of being explored, it still needs to be tested, litigated, and see what happens in the real world. And we're taking an approach, you know, a little bit more on the the side where we feel our partners aren't going to get into trouble, which is let's focus on a web shop, you know, let's create something that can really connect your app with the web and and let you power up your

commerce that way and build deeper relationships with your players. Um but we're really leaving it up to our partners to sort of push the boundaries of, "Okay, are they going to try to pop something up in app, right, that is questionable?" And at the end of the day, that that's just going to take some real-world uh examples to to explore. Mm. So, as soon as we see those those bans coming in, then we kind of start figuring out what the boundaries are. Okay. Well, I think but but you know what's what's interesting here is is like you know, 5 years ago, right? Or you know, maybe maybe less, but let's say 5 years ago, like where would you hear about that kind of thing, right? Like you would hear it like, oh, you know, this app's getting rejected cuz there's a whatever cuz for whatever reason. And it's not a it's not a clear violation or a clear application of App Store policy. It just happened and how would you hear about that? You heard about it at GDC. Or you'd hear about it at, you know, you hired someone from company X and they came in and said, oh, well, one time we did this thing. Like now, I mean, you've got the Mobile Dev Memo Slack. You've got, you

know, a pretty active, you know, kind of app developer community on Twitter. You know, you've got the the um you know, you you've got the Deconstructor Fun Slack. You've got a number of slacks that are where this information gets shared very quickly. Right? And so, I feel like at at least, you know, before it was this very opaque sort of like Byzantine process. And now it's like, well, okay. Yeah, it still is, but we at least hear about the failures and can can can sort of like deduce from, you know, well, okay, I heard that this person tried this and this person I mean, a good example is with the ATT pop-ups. Like how do we know what's acceptable? Apple is not very clear about it, but, you know, in the Mobile Dev Memo Slack, I've seen, you know, 30 different variations of someone obviously pushing the boundaries and getting slapped on the hand, right? So, at least we can go through that sort of process of deduction by reduction, right? Um in these open communities now, whereas that like wasn't really the case like 5 years ago. Um but I think, you know, to to the question this guy is asking, how to prepare for it? Well,

first is get the web shop set up. I think the other thing is think about how this impacts your economy, right? because, you know, I I made the point on Twitter the other day. It's like, well, okay, if you start having to incentivize the click out to the web with discounts, you're just eroding whatever benefit you would have gotten, right? And that's that's obviously, you know, going to going to, you know sort of sort of impacts the the the benefit of this. But, you know, some people respond, "Well, you could just bundle stuff." And so, you don't reduce the price, you just add more. So, well, that's going to blow up your economy. Right? You need to be very thoughtful about that. You can't just bundle a bunch of stuff together and and then charge the same price. That's that's going to have real impacts on your economy. There was a there was a conspiracy theory. Oh, finally I can talk about conspiracy theories. No, I'm just kidding. About Hearthstone and that that if you purchase the card packs in Battle.net, like you would play it on PC, the gotcha would be better that if you do the same purchases on iOS or Google Play. Like, this is a total conspiracy theory, but at least I saw that often times. And if I would have been buying card packs, I'm like, like, it's going to be just a little bit of a better drop if I pay the same

amount of money but in the PC skew. So, just saying, that could be the best strategy if you have gotcha in your game to kind of just incept that in Reddit that there might be better drops. But, anyway. That's a good conspiracy theory. Yeah. Yeah, I mean, I love I love a good conspiracy theory. I I actually bought into that on Apex Legends, my my game, where I'm like, all right, you know, if you buy the battle pass, you get a little bit better of a you know, matchmaking. Yeah. But, um no, I'm not saying that's the case. That's just just a joke. Just a conspiracy theory. I mean, I spent my money. But, um no, look, you know, I think when it comes to the economy, there's a couple of things that people should start to think about. Um you know, not just rushing to, "Oh great, we can offer better discounts, you know, off of the app on the web." Uh instead, look at it as and we're seeing this from our own data from partners that we have already been working with for a year now. We're running web shops.

Uh it's a great opportunity to start converting some of your non-spenders into spenders. So, we're actually seeing an increase. It's in spenders. You know, initially the the was, "Great, we'll migrate our way off. we'll give some special offers, capture, you know, a bigger revenue share from our big spenders, but we're actually seeing that all players are taking advantage of it. And because going out of the App Store and doing these alternative payment mechanisms, you're able to offer many more payment options, right? Which can capture a good 30% of your players who may not have PayPal or credit card, who may come from territories that are, you know, not or unbanked, right? And they're using alternative methods to to purchase. You know, these players want to spend and they haven't been able to through the App Store. So, we're seeing that companies are able to capture those players and convert them into spenders. So, you're getting kind of two benefits here. You're getting increased margins by not paying that 30% tax, and then you're also increasing your spender base by getting all these, you know,

non-spenders who want to spend converted into spenders with their local payment methods. That's that's really interesting. You mentioned different payment methods and that kind of let me I'm going to I'm going to hate the word conspiracy theory, but another one where I was talking to a big Asian developer and they were talking developer publisher and they were talking about their success in Southeast Asia that is traditionally really low monetizing countries. And they were like, well, you're just not seeing what we're seeing cuz we're using um other alternative payment methods and they explained but naturally I've never been to Vietnam. Not not naturally, it's not like I didn't want to go to Vietnam, but I haven't been to Vietnam, so I don't know what kind of payment methods they use and they just talked about it. I already forgot, but is that something something gross that that you've seen before that that companies are using alternative payment methods especially in in developing economies? Absolutely, you know, we we see it all over. I mean, Brazil is a great example, Southeast Asia is a great example, a lot of the emerging markets, right? In

Africa and and India. And I mean, you have big big active player bases there and you have people that want to spend, but you know, I mean this is this is this one is starting to fade a little bit. It still is a real thing. Uh but you you know, cash kiosks, you have people that go to these like ATMs and deposit cash into their Steam account on PC, right? The same thing with with mobile, they could deposit it into an account that can be used in mobile this way. And you know, you have super apps that are coming along now that have payment mechanisms within them that can link out to a game. So, there's a lot of different ways right that people can spend and you know, in a tier one kind of territories, we get a little, you know, we're a little used to and a little blind to the fact that not everybody has a credit card. Yeah. And um it truly is a big opportunity for for companies and and it's not just hypothetical. Like I've actually seen the data on how much of a lift this is providing and and we estimate that it that it can increase your your revenue

by about 30% uh and that's that's how much is being left on the table by missing out on on these players. Okay, so top up pages can lift up your games revenue by by 30%. Yeah. Yeah. How much how long does it take to to make a top up page? Like it doesn't look that difficult. No, I mean, you know, different different people, I can only speak for ourselves and I and by the way, I don't want to be a a salesy guy on the show here, but for us, we can get it up up and running in no time. We we have a system that basically points at your app page, scrapes the metadata and it'll automatically create a page for you with pricing, with links, with the whole the whole thing. So, um you know, and then it so in no time at all. Okay, yeah. Yeah, that that's that's what it looks like when I when I, you know, research a little bit these pages. Like it it's not very custom, if you will. Like, you know, I'm not blown away. There could be a lot more things done. Like it doesn't show you the best packages and whatnot. It's kind of like, you know, Yeah. I mean, that that's the basic way, right? You know, you can actually, you

know, what I'm really curious to see is how how developers and publishers are going to lean into this and start to build out, you know, kind of a community hub, right? And where they can really start to engage with their players you know, I think on the on the mobile side, you haven't necessarily seen those communities the way you do on PC, right? And to me that's that's an exciting opportunity. So. Yeah, I think that to me there's like two kind of interesting things that get unlocked here, right? So, it's like one is you know, like the Supercell approach. It's like well, if you've got a portfolio with multiple games and you're pushing people to this web store, you can sell them packages that apply to the whole portfolio. It doesn't have to be like single game packages. And and I think you know, you see a lot more developers with the capacity to do that. And post kind of ATT, everyone has been thinking about like how do we build identity? How do we build an actual, you know, sort of um system that, you know, players can can use that tells us who these people are when they play our games, right? If

they're playing multiple of the games cuz cuz we need that information and we lose it with with with the loss of the IDFA. So, that's one thing. You know, another thing, you know, just having this this place where you can buy stuff that applies to the entire portfolio, right? It doesn't have to be just one game. The other is, you know, the App Store is like hasn't really been changed since like 2014. That was the last big makeover it got. And you know, you've got awesome tools like Geeklab um for like ASO uh purposes, but we don't have really anything for like price testing, right? Like you have um you know, the the you have just sort of the normal ability to AB test. But what you get with a web and why the web is so compelling versus just apps have to go through like a review process and there's actually like development you know, you can't push an app update, you know, instantly like you can with a web page change. It's like you can just test everything. It's so much faster to do testing on the web, right? So, you could test package pricing, you could test uh the bundling, you could test the display, you know, of of of packages against each

other. You could test color codes for, you know, the button's red, does that lead to higher conversion than yellow? And you can do all that kind of testing in like just in real time instantly without having to push an update, right? Which is just makes that testing process so much faster and more robust. Uh, could you also do like player acquisition that directs you directly to the top up page? Like just show ads of the top up page to your existing players, you know, using Yeah. You could do retargeting that way. Yeah, yeah. Just Like the the whole the whole reason why a lot of UA budget had been shifting to the web anyway is for that reason. Like you can get and not not for games. Like this is for like subscription apps and stuff. But because you can do that like the conversion funnel was so brutal for a lot of these like subscription apps that the App Store was just insufficient in terms of like giving you testing ability, right? Like in order to in order to optimize the conversion like the App Store just wasn't it it just didn't it just didn't provide you with with enough um

uh, you know, with with the sort of like sufficient surface area, right, to do testing. Cuz it's like, okay, I push an update, gather some data, in a week I push an update. And so like a lot of these subscription apps started pushing to the web because their funnel is so involved that they could and and they could do like, you know, and and it'd be like a 20 pay a 20 sort of step process. You could set up like a page for each one of those steps and then change the ordering, change the wording on a specific page, and and and whatever else. And I think and that and so people are driving spending their their UA money to drive people to the web to do that funnel onboarding and then drive people to the app. Well, now you can do the same thing with the storefront, right? It's not doesn't have to just be within the app where you're sort of constrained by just the just this the the the sort of like um the lack of tooling and and the general sort of like slowness of doing any sort of App Store update. You can do everything in kind of real time with the website. And that's that's super powerful to to companies that I want to dedicate resources there. Mhm. Chris, how how common is this like like these portfolio bundle packages? I've never seen anything like this before. That sounds really interesting

and then price point testing, especially price point testing within different countries. Like that should be pretty interesting. Like how do you find the perfect price point for Brazil or you know, Vietnam or Philippines? Like we understand already the price points in in the tier one countries. Like how how much companies are doing that? And then the number three is like is there any we talking getting being done where you target existing players and get them to the top up page that being set up? Yeah, you know, I think um definitely the the ability to do this Sorry, I'm trying to break down your three questions. Sorry, I just I just I just like throw too many questions often times. So let's just only one like portfolio bundle packages. Like is that being done? Yeah. So portfolio bundle packs, you know, yeah. I mean that's that's I think that's really interesting and a great example of where this can go. Um I personally haven't seen that happening yet because uh at least from from our experience, it's been more companies putting single games up, right? We are We have a number

of partners that are actually rolling their portfolios out over the coming months. So we can check back in on that and when it comes to the different the pricing, definitely we've seen testing on pricing especially for some of the more engaged players. And when it comes to the different countries, one of the benefits that that we haven't talked about in in addition to regional pricing, which definitely is is a thing, is also testing being able to change the the layout of the different payment options. Like what are the top three payment options that you're showing so you can test which ones are actually going to work best in a region, right? So not only can you test pricing, but you can test which of the payment options for that region are the most engaged for gamers, right? So you know, I there's so many ways that you can benefit from this. And then we haven't even talked about some of the real, you know, sort of advanced web commerce type of behaviors like behavioral pricing, right? Getting to

know the player and offering different pricing based upon the player's spend history, you know, with yourself and your your portfolio. So, there's a lot of opportunity here. Some of it's already being done, but most of it is white space to be leaked into. For sure. I mean, the portfolio bundle packages sound really interesting. They should call that the Super Package since you you really came up with that. So, that's the new product. Like get cross-promotion. People are doing that. I think that's already happening. Yeah. Um but yeah, okay. So, let's let's move forward and let's talk about like what was before because I mean, this is like like we've discussed, this is nothing new. It's just more accepted right now because the Spotifys and Netflixes and other subscription services, they were able to monetize uh outside iOS, outside Google Play before. And my question is like, why wasn't this done by by gaming companies? Like I think Super, you wrote something about this. Do you like to kick it off and move to Chris? Yeah, I mean, it's it's not like there's a couple of things, right? I mean, first of all, you know, with the game um

for the most part, they monetize via IAPs, right? And so, that's like an in-the-moment thing and, you know, any kind of friction there is going to be a little bit disruptive, right? I think, you know, the other thing is um it it hasn't really been that long that we've had these kind of iconic uh brand-driven, you know, games companies, right? So, Supercell was doing this, Fortnite was doing this, Roblox does this, right? I mean, all these companies were doing this. Um but you know, I think if you get to that point where you're and I I do think it's prob- there's probably like I don't know. If you think about the universe of companies that can probably do this to like great effect and really transform their business, it's probably not that many, but they're the biggest. And so it's a meaningful portion of like the sort of uh you know, I was talking about the the games app the app store is the game store. It's probably a meaningful chunk of that revenue. Um but I think you know, as we get more and more of these games like this only going to get more and more relevant, right? So like, you know, a Supercell doing this that makes total sense. Like a Flappy Bird doing this, no one's going to click out, right? So I I

think you know, you you've just got there's a whole it's a stratified market and there's like people that can do this and people that can't. If you think about the second order effects of this, you know, you start to see companies that that see an opportunity to build unified storefronts across all the properties, across all their platforms, right? And you know, a couple months ago I wrote this like kind of three-part series about the future of the future of mobile content platforms. And I made I made the argument that like you won't think about the platform as as one-to-one related to the hardware form factor. You'll think about the platform as this sort of cloud source of content that is that you can connect to via any hardware form factor. I can connect via my desktop, I can connect via my phone, I can connect via my tablet cuz that's what consumers are starting to demand. No one thinks about oh, the iPhone is where I watch Disney Plus. No, I watch Disney Plus on my TV, I watch it on my phone, I watch it on my tablet, I can watch it on my desktop. And that's what people are demanding. Well, that store that unified storefront is is a is a big part of that, right? And now that, you know, this is you know, now that I can within my app link to that, it just makes progress in that direction a lot smoother and probably accelerates it.

Mhm. Chris, what's your what's your take on on this? Like what I mean, cuz you've been it's not like Pixel launched last week. Like you've been doing this for for a while. Like how was it done before and and can you speak on that? Yeah, definitely. And and yeah, to that note, we've been around 16 years. Um and when I think you when you look at Spotify, Netflix, companies like those, as Eric pointed out, they also they already had a strong presence or they have a strong presence beyond just mobile, right? They're not viewed as just a mobile product. And they have a great web presence. Um their content is consumed all over the place, right? It's not just consumed on the on the one piece of hardware. So, that really allowed them to engage with their users off platform really easily. And when you're looking on the game side of it, I think there's a parallel there. Well, I would say that these were cross-platform products, right? To to go back to that earlier comment. So, if you look at games that have have been

cross-platform, there have been game companies already doing this. And the ones that can take advantage of it, I think, are the ones that have those communities that are large enough where they exist and want to consume the content everywhere, right? They're not just, like you said, Flappy Bird. You know, you don't have a lot of people going online trying to find Flappy Bird communities, right? Or, you know, talk about events and Not anymore. what's coming up. But, you do in other games, right? Supercell, obviously, you know, their games. You know, Nexters with Hero Wars. You know, these are all examples of of people that have a big enough game and community that the community is engaging content everywhere. So, that makes it a lot easier to hit them up on the web because they're already over there. And um you know, it's been surprising, honestly, that more developers haven't done this. You know, I think it's an opportunity that that there's a lot of upside with little little downside, little upfront cost. And now we're going to see more of it. Mhm. You mentioned some of these these big publishers. I mean, the the Nexters

and the other Supercells. So, do you think that this benefits the most these big publishers with large cross-platform games and, you know, significant portfolios? Or, I mean, is there anything for the the sort of a small to mid-size publishers? What do you think, Chris? Yeah, absolutely. I mean, I think it it benefits developers and publishers of all sizes, but to different degrees, right? And on different time horizons. Um you know, I think from our perspective, the common benefit relates to developers finally being able to create a bridge between their apps and their presence on the web and where they can do all of their commerce, they can work their community, and they can market, right, their apps in ways that they haven't been able to do before as as Eric had kind of mentioned. Um and basically it's a great opportunity for mobile devs to earn significantly more money and develop those deeper relationships with their players through the data that they're going to be have access to that they wouldn't before. And um you know, but all of this does require

resources and bandwidth, right? Uh so which then to answer the question means that the obvious initial winners are the larger developers and publishers who have the resources, who have the bandwidth. And by that I mean they have team members, right, who can actually do the work to take advantage of this. And that's something as I said before we've we've been doing for a while. And uh you know, what we're seeing with some of these when when they do it right, uh we're actually seeing revenue bumps that are upwards of 40%, right, coming out of this for for a lot of the big companies. And um this is all been done under the current sort of restrictive uh and now illegal anti-steering practices. Um and these these these are the enterprise companies, right, that we're talking about. And they can drive traffic back and forth. Um but, you know, when you you have asked about the mid-size and smaller devs, and they can benefit as well, right? This isn't just I think the immediate opportunity and I'll look away from my notes here and just talk about you know, the immediate opportunity is obviously

the big ones who can move quickly. But smaller devs, they can definitely benefit from this, right? Um you know, they they can it's an area I want to see evolve, but the tools are out there where they can act just like a big company and they can get their presence up on the web very easily at low cost. Um and they can start to operate outside of the platforms. And and the parallel I'll make here is, you You we've been doing this on PC for quite while and we've seen a lot of indie devs who would be like, you know, small mobile devs who have seen success by operating outside of the App Store, you know, off of Steam. Some of them are off Steam completely like Battle State Games with Escape from Tarkov. You know, that's an indie dev that's having AAA success and they're they're not even on right the platform. They're doing it all just straight straight from the web on their own. So, you know, they're doing that because they're able to work directly with the community. They have very you know, very unique sort of pre-order packs that

they're selling. So, you know, there is opportunity for the small devs. My biggest question is just do they have the resources internally, the people to take advantage of it, right? And So so Tools are there. Yes. So, basically the question is like how do you drive I mean, is the question like how do you drive traffic to your the top up pages or your your cross play games or what's the what's the challenge for the small ones? Yeah, I I think that's definitely it, right? You know, the big companies can spend, right? They can buy ads to drive traffic over there. They can they can reach out to their database that they already have of users, right? That they've been gathering. For the small for the small devs, they're going to have to take a page out of kind of the indie indie PC side of it where you're building your community, you're engaging, you're getting out there talking about your game much more, you're getting into the forums, right? You're you're just becoming a salesman for your game, right? And being very social about it, involving your players

more, you know, in in what you're doing. You know, to to Eric's point of AB testing, now you can invite your players to come and help you AB test, right? So, it's a little bit more of that being social, build your community aspect that maybe we haven't seen in mobile before. Yeah, I think it's I think it's interesting because I mean, we've seen the rise of Discord as a sort of a a de facto forum for for a lot of this. Reddit has been huge as a as a forum. It's sort of like these, you know, old school like web-based forums. Like you see Discords and Reddits and and then the third one is influencers. Like there's plenty of influencers that play your game and I think there's a there's a way to sort of a use those channels to drive then traffic to not to go to your app and and purchase, but actually purchase from your own uh top-off pages. Yeah, 100%. I mean, my son my son is a huge fan of Bloons TD 6 and he's watching, you know, uh you know, a Sunday and some of the other influencers play that all the time. So, case in point.

Yeah, yeah. It's just if there's discount codes, then those influencers can kind of, you know, push those because now you can do that. If if you have your own pages, you the uh it's it's just like it's like Instagram influencers selling, you know, diet pills. Like minus 10% off uh from from your next card pack when you use, you know, I don't know, code word. I I don't know. Anyways, so let's move on from the diet pills. Like um Eric, what do you think is going to be the effect on the app ecosystem as a whole? Like cuz this is it When when this news originally broke, a lot of people were sharing it on on, you know, the mobile dev memo slack and the OF slack. There was a lot of conversation like, "Wow, this is big." Is this big? Or like what's going on? It's big. I think it's big in the sense that, you know, things are moving in that direction. This is like one more uh you know, it's it's uh it's just kind of one more domino to fall. I think, you know, a lot I think companies will make use of this. They will make money on this. It'll be important to them. I think um

what I see as like the more sort of disruptive change will be and I the inevitable change is Apple's just going to have to offer in-app alternatives. Like this is going to have to happen. And I think, you know, we talked about it in Twig yesterday. My my sense is they have like an accountant or like a team who's just saying, "Okay, we know that this is eventually we're going to have to get to that point eventually. Let's resist it as much as we can because if we can delay it by 12 months, we make this much more money. If we can delay it by 18 months, we make this much more money." And so really it's just a matter of like the preserving that revenue for as long as they can. But I think everyone sees that that's the that's the end point here. And so that to me will be the really big moment, but you know, this is still an important change and I think um I you know, I imagine that, you know, every developer and I certainly, you know, speak to a lot of them who are have started this process, but every developer is looking into this, right? And because it just makes sense. It's a no-brainer. Why would you not do this? It makes zero sense to not do this. Oh, well, that's a that's a crazy ad for

Xsolla. Um the So So Chris, what do you What do you think will will Google follow suit? Will Google follow suit? Yes. Yeah, I definitely I do. You know, interestingly, Google's already been working on some things to make it easier uh for third-party app stores, right? To operate uh kind of on par with Google Play. Um you know, so I think Google's definitely thinking about this. They've always had a little bit more of an open-minded approach, obviously, to their their ecosystem. Um you know, last year in fact, Google had said that, and I quote, um some developers have given us feedback on how we can make the user experience for installing another app store on the device even better. And in response to that feedback, we'll be making changes in Android 12 to make it even easier for people to use other app stores on their devices while being careful not to compromise the safety measures, yada yada yada, right? So, Google, you know, they're already welcoming third-party app stores. Uh

they recognize that that's been happening on Android and they're making it easier now. Um you know, a few months ago, website XDA found documentation that indicates third-party app stores will be able to update apps on Android 12 without constant user app user interaction. So background updates are you know just like you would get in the Google Play Store. And and this effectively allows third-party stores like the Epic Games Store, you know, for instance, to function much like the Google Play Store does today. And instead of the user getting pop-ups during the install or having to manually update apps from a third-party store, they'll this will all be automatic. So this is a huge thing and I know it's not directly related to payments. It's it's updates, but I think it shows the mindset of where Google is. So I I can't imagine that they wouldn't follow on this or may they may even, you know, take the reins and jump ahead of it and, you know, garner some goodwill because you know, we haven't really even talked about all the legislation that's coming and the the court of public opinion. So you know, it seems like Google's a little bit more open to to all of this.

Yeah. What what do you think, Eric? Yeah, I mean that's certainly true. I although I um I thought with Google you could link out to alternative. Is that not right? Chris? That you can link out? You can not through Google Play, right? Okay. Yeah. Okay, I thought I thought you could. Well, then I'd imagine that this this has to be applied to them. Mhm. Yeah. You know. Do you guys think in the future like when we consider PC gaming? Like you always have to download the big client not the big client but the sort of like a store client first like whether it's the Battle.net or it's the the Wargaming Hub or any of that. Like you you first download that and then it gives you the option of the games from that publisher like the Perfect World has the similar type of thing. Like is that sort of a future that's going to be on mobile? So if I want to play Supercell games, like the best way is to download the Supercell app where I log in with my Supercell ID and then it opens up me the the whole portfolio of Supercell and their investment portfolio. It's like has like 25 different games and they're

all linked to Supercell. Is that is that where we heading or what do you guys think? I don't think so. I mean that would violate the the no app stores in the App Store rule. I mean, if they if they allow alternative app stores if Apple does, then maybe. But, I think that's um it's you know, part of it is also just cuz that sounds like an arcade app, right? And and Apple's, you know, historically has said, I mean, that's just part of the the guidelines, but they've also just rejected those, right? You can't do that. Um you know, if they have if they're forced to allow alternative app stores, then maybe, but I mean and you know, alternative app stores are available on Android and no one really does that. I I don't think that that's just that's you know, that's like it's I think it's it's a harder marketing prop, like a harder like, you know, sort of direct response advertising proposition and also like um it's just that's not consistent with how people consume content on mobile right now. So, maybe that changes over time, but like, you know, if if that was a thing, I think you'd see it on Android and you just don't. Yeah, okay. I was just thinking because that's that's always

an interesting way to interact with PC games, where you have to go through their own kind of store page before you get into the game. They show you a couple of ads, you know, everything that is going on while they download the update to a client and you're in the view of that publisher window and it tries you cross-promote and sell different kind of packages. So, seems like a missed opportunity on mobile, but I understand it's just not allowed. At least not on iOS. All right. Cool. Uh last part. Yeah, Chris, you wanted to Actually, I do want to clarify. Sorry, uh Google on Google Play, you can you can reference third-party payments, right? And and all of that. Sorry, I was talking about just embedded in itself, but you can on Google Play, you can link out and and reference these other payment methods. Right. Yeah, that's what I was talking about, which is the the link, right? Yep, yep, yep. Yep. Perfect. All right, let's move on to the last piece and that is, you know, Epic's intent behind the whole suit was to prove that Apple was in violation of that of the antitrust laws and they did not achieve that. So, do you think that Epic will continue this

pursuit and you know, after all Apple sees this as a win, Epic sees this as a loss. I don't think Tim neither of the Tims is very happy to to lose. Both are look to be pretty much a winners. So, where is this heading? Uh Eric, do you want to start? Yeah, I mean, I don't I think what my sense is that Epic knew this was not like a winnable lawsuit, but they they just wanted to like move the conversation forward and in a very public way that shed a big, you know, spotlight on Apple's practices and they accomplished that. I mean, they got a ton of documents pushed out into the sort of mainstream press, right? Via discovery and in a way that, you know, there's the Apple or there's a Spotify versus Apple, you know, kind of suit that was ongoing in in or that actually like was was sort of ruled on in in in the EU. They just haven't sort of issued sort of like I said a rem- remedies yet, but I guess in that suit that it just, you know, someone was explaining to me on on

Twitter. I don't I don't understand the specifics of it. I'm not a lawyer, but they weren't allowed to push those discovery docs into the into the into the public view. It's it's it was, you know, I guess privately litigated or whatever um cuz it went to the EU. So, we didn't get to learn anything in that suit. It it all happened behind closed doors and this one we got to learn a lot, right? I mean, every week there was a, you know, sort of new set of emails that were getting published and it was very interesting and and going back to the you know, to Steve Jobs, right? Yeah. Um my favorite my favorite was the uh the one where Tim Sweeney emailed um maybe Phil Schiller or something and it was this long email. It was you you should change your App Store practice, blah blah blah blah and like Tim Cook just uh and I guess he received it, too, and he just messaged like, is this the guy that came to one of our rehearsals for rehearsals for WWDC? He didn't even know his name. But um you know, that was funny, but you know, we got to see all that stuff and and um and so that's really I think the the the major achievement of this is just like hey, you know, The Verge and Wall Street

Journal and New York Times published about this, you know, five times each and now consumers like, "Wait a minute, I didn't know the App Store worked like that. I thought I just downloaded apps and whatever." Um, so so I think that was the major achievement here. I don't think that I don't think that, you know, they they thought that they were going to sort of win any sort of like concrete concession for themselves. Um, and you know, they and and you know, they obviously had to pay some money and um and you know, they petitioned to get Fortnite put back on the store in in Korea and they said no. And they said no. So then, you know, they But you know, they they they in terms of like ROI on this is probably pretty low. Um, unless you take like a really broad view. Um, but you know, maybe they think about it differently than I do. They have a lot of money to spare. So. What do you think, Chris? Yeah, I mean, I think um, I mean, they'll definitely continue to fight it. Obviously, Tim has already said that. Um, you know, I know that there's mixed feelings uh, even at Epic about is this a win or a loss. And uh, at the end of

the day, it helps all of us. Like you said, discovery, we get to see what's going on. Uh, it actually opens up some of the abilities for for devs to actually profit more and build better relationships with their players. But you know, what I'm kind of and I'm going to veer off a little bit into some real future think here and and Rishka, you love a good conspiracy theory, so you know, um you know, with taking that long view, I think another way to look at this is um, you know, what what are we looking at here when you look past the iPhone, right? This could be existentially critical to the some of the plans that that Tim Sweeney has when he's starting to think about the metaverse. And I know that's such an a played out world word, but when you think about the new technologies that are coming, right? That uh, Epic sees as crucial to an open and interconnected ecosystem, you know, such as, you know, like I said, the metaverse. You know, these technologies are likely going to be led by Apple and and their hardware. And that would require, you

know, interacting with Apple's ecosystem. And you know, in this context, I could see if that ecosystem is closed off, that it becomes a blocker to some of the sort of real future aspirations that Epic may have, you know, beyond just games and apps on the App Store. But just content being consumed in this open metaverse kind of way. And if Apple, you know, whether it's with their glasses or whatever it might be, right, is a leader in this, then I could really see why why you would play a super long game to try to to break that open, get them designated as a monopoly, so that they can't find different ways to either control the data, put taxes on the ecosystem, whatever it might be, right? So, you know, that's kind of your conspiracy theory long view perspective to to to digest. Well, you know, I mean, that's that's a great point. And like I agree 100%. I mean, that's the battle that's being fought now, right? It's like Facebook and and Apple. I mean, Facebook, you know, for a long time has realized we

got to own the hardware. And that's what they're doing, and that's what Apple's doing. And I think a lot of other you know, companies are going to throw their hat in the ring. I think one though one issue and and probably where Epic lost the most on this is that they're in a in any any trust case, you you start with a definition of a market and then you argue from that position. And neither company had their definition of the market accepted. And the what the judge said was, you know, the market we're talking about is mobile games transactions. Right? And so, given that scoping, um you know, like it's it's hard to it's like it might be hard to extrapolate this out and say, well, this applies to the metaverse, right? Now, what I think though, we are moving in that direction, but that's probably going to come about less from like lawsuits and individual companies sort of like battling each other and more just like broader regulation. And we see that with the open app markets act, right? I mean, that where they defined app store was very broad and much broader than mobile app stores, right? And if that, you know, I don't think it's going to pass, but I feel like that's a starting point. And if

something like that does pass, and and I made this point on on Mobile Dev Memo, that is going to it's going to apply to the next generation of like big content platforms, right? It's not going to really apply not not in a practical way to to mobile because I think that that's already that the sort of the dynamics are in place there. Um and it'll change things, but I think fundamentally mobile stays the same. But then you talk about the metaverse, you talk about these other new sort of like platforms, maybe something related to like crypto, but all that stuff is still, you know, in the formative stages. And so I think like a a big, you know, sweeping regulation like that would would then make those more competitive going forward. And and that's exactly what Facebook and Apple and and others are thinking about right now. All right. So, while everybody is playing checkers, Apple and Epic is playing chess. But most importantly, what what we discussed in this podcast is really how to capitalize on these these changes that are coming in as as these two companies and and I mean, the whole ecosystem is battling it out like who can control control the data, control the payments, and through that control the metaverse.

Uh anyway, so thank you very much, Chris, for for joining. And Eric, as always, much appreciated. And Chris, what's the best way to to reach you? Sure. So, I mean, you can hit us up at exola.com, xsolla.com, and there's a number of ways to contact us on there. Uh [email protected] is is our email. Um Yeah. Awesome. And as Eric said, there's everybody is putting their own payment options in. So, there's the phone is ringing nonstop. And and if you don't reply right away, you're busy. Never too busy for our friends. Thank thank Thank you so much, Chris, and thank you everybody for listening. All All right, Mishka, thank you.