A “contagion” of defecting developers could have shaved billions off its Android revenue, Google feared.
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Google has confirmed in court that Epic was offered a $147 million deal to launch its hit game Fortnite on Android’s Google Play store. The deal, which Google’s VP of Play partnerships Purnima Kochikar says was approved and presented to Epic but not accepted, would have seen the money dispensed over a three-year period of “incremental funding” (ending in 2021) to the games publisher. It was meant to stem a potential “contagion” of popular apps bypassing Android’s official store, and with it, Google’s lucrative in-app purchase fees.
Epic launched Fortnite on Android in 2018 directly through its website, avoiding the Play store. That allowed it to sell Fortnite’s in-game currency V-Bucks without paying the commission required of Play Store apps. It relented in 2020, saying that “scary, repetitive security pop-ups” and other factors had put it at a severe disadvantage.
But in an antitrust lawsuit filed later that year — and currently being argued before a jury — it alleged its initial decision had thrown Google into a panic. It cited internal documents claiming Google feared a “contagion risk” if other game developers (including Blizzard, Valve, Sony, and Nintendo) followed Epic’s lead, and it claimed Google attempted to forestall it by offering special benefits or even buying Epic.
The “contagion” documents came up in court on Tuesday when Lawrence Koh, the now-former head of Google Play’s games business development, took the stand. They forecasted Google’s concerns that virtually all top game developers could defect from Play within a couple of years of Epic’s decision, costing Google a total of billions of dollars in revenue. Documents shown in court projected Fortnite’s absence could result in a direct revenue loss between $130 and $250 million and then a broader downstream loss of up to $3.6 billion if that massive defection took place.
Google’s position is that it was concerned about losing games on Play, but that there’s nothing nefarious about that. “We just wanted developers to choose Play,” Kochikar said in testimony — particularly when Apple’s iOS was an alternative. And getting games on the service, Koh testified, “was the investment we thought was worth all the dollars.”
Conversely, Epic is using these documents to argue that Google feared competition for Android app distribution and has maintained its Play store as an unlawful monopoly. This deal’s existence doesn’t prove that — but at the very least, it’s an interesting look at how Google sees its games business.
Sean Hollister contributed reporting.
