They embroiled google in yet another anti-trust controversy. This time, they have accused the company of interfering with the mobile gaming industry. According to a complaint filed by Epic Games and reported separately by Bloomberg and Reuters, Google paid Activision Blizzard and Riot Games millions of dollars to prevent them from launching their own stores for distributing apps, or more precisely, mobile games.
For earning money from mobile apps distributed through an app repository such as the App Store or Google Play Store, games are some of the biggest cash cows. According to Sensor Tower data, mobile games downloaded from the Play Store and App Store generated a whopping $6.4 billion in June alone. This is meaningful because Google (and Apple) earn up to a 30% cut from in-app purchases of game currency and other items such as skins and weapons.
As a result, it is understandable that Google would want deep-pocket gaming behemoths like Activision Blizzard and Riot Games to be restricted to the Play Store. According to reports, both companies discussed developing their own app stores for distributing mobile games and related products. As a result, Google would lose a sizable portion of revenue from its Play Store billing tax, which would be bad for business in the long run.
Google reportedly agreed to a three-year deal with Activision Blizzard in which it would pay the company $360 million over the course of three years for the company not proceeding with plans for its own app repository. Epic, which has recently been embroiled in a contentious legal battle with Google over Fortnite, claims that Google signed a deal with Activision Blizzard in 2022. Interestingly, Microsoft purchased Activision Blizzard in January of this year for approximately $70 billion, a deal that has been subject to regulatory scrutiny.
Epic claims that Google paid nearly $30 million to Riot Games. Riot is the creator of “League of Legends,” one of the world’s most popular video games. The Tencent-owned company already has several highly popular mobile titles under its belt, including “League of Legends: Wild Rift,” “Legends of Runeterra,” and “Teamfight Tactics.” Riot allegedly “agreed to launch its games on the Google Play store before they debuted on other app stores,” according to Epic’s complaint.
Google claims that the terms of the deal were misrepresented. Google claims that as part of Project Hug, it provided “incentives” to developers in order for them to keep early previews of their projects exclusive to the Play Store. Google did something similar in India, for which it was fined more than $100 million by the country’s competition watchdog a few weeks ago.