Sweeney: App stores are "pocketing a huge amount of profit" at devs' expense

Tim Sweeney has called out mobile app stores for taking too large a share of developer revenues in the industry's most competitive and punishing market.

The CEO of Unreal Engine creator Epic Games delivered a keynote speech on the future of graphics and games development at Devcom in Cologne today. While the majority of the presentation focused on the push for photorealistic graphics, improved augmented reality and ultimately a sci-fi style 'metaverse' we can all interact with, he took time to raise issue with business models in mobile.

"The system is pretty unfair at the moment," he said. "These app stores take 30% of your revenue for distribution... That's strange because Mastercard, Visa and other companies that handle transactions take 2% or 3% of the revenue. There's CDN, customer service and some other costs but it's very hard to see that these app stores actually consumer anything more than 5% or 6% of revenue for their operations. So they're pocketing a huge amount of profit from your order - and they aren't really doing much to help us any more.

"There was a time when there were just a few releases every week and you had a pretty good chance of being near the top of the charts, but nowadays the top of the charts are completely dominated by a few games with $100m marketing budgets. There's not really room for ordinary developers to compete. So what they have to do is spend money on user acquisition [via] Facebook, Twitter, Google Search... Companies are paying something like $3 per install to get users to install a free game, and that really sucks.

"This is a market failure. Gamers really want to find great new games, developers want to reach gamers and there's a lot of opportunity for discovery that isn't really working out in an effective way."

Sweeney went on to say the first step to rectifying this situation is "not accepting this as the status quo", adding: "We should be angry about this, and we should constantly be on the lookout for other solutions, and new ways to reach gamers."

Later reiterating his comments in response to a question from the audience, he described the engorged share taken by app stores as a "parasitic loss."

This is not the first time Sweeney has spoken out against a platform holder operating in a way he believes stifles developers and the industry. Famously, he slammed Microsoft for using the Universal Windows Platform to sabotage Steam and lock down the PC ecosystem, a platform he insisted must remain open to foster creativity.