Why Google offered $147 million to get Fortnite on the Play Store

Documents show Google's $147 million bid to keep Fortnite on the Play Store, shedding light on its concerns and ongoing antitrust case.

By Abhishek Chandel
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Why Google offered $147 million to get Fortnite on the Play Store

Why Google offered $147 million to get Fortnite on the Play Store

Newly revealed court documents have shed light on a massive $147 million deal Google offered Epic Games in 2020 to get the hugely popular Fortnite game on the Google Play Store. The record-breaking offer provides rare insight into how desperate Google was to retain its control over the Android app market in the face of a growing threat. Epic's refusal kicked off an antitrust lawsuit accusing Google of monopolistic practices regarding the Play Store and app distribution. The ongoing trial could significantly impact Google's future conduct of its lucrative app business.

Fortnite's Launch on Android

Fortnite exploded in popularity when it first launched in 2017, amassing over 350 million players globally across PC, consoles and mobile.

In 2018, Epic Games made the controversial decision to release Fortnite on Android directly through its website, bypassing the Google Play Store. This allowed Epic to avoid paying Google's standard 30% commission fee for in-app purchases.

In response, Google removed Fortnite from the Play Store in August 2018, though Android users could still get the game directly from Epic. This kicked off escalating tensions between the two companies.

Google's Dependence on App Store Revenue

Google to add Play Store's app permissions section back after removing it -  BusinessToday
Credit: businesstoday

According to newly revealed internal documents related to Epic's ongoing lawsuit against Google, senior executives were extremely concerned about the precedent Epic's move could set.

Google depends heavily on Play Store commissions as a revenue source - it brought in $11.2 billion in 2019 alone. Documents show Google feared developers bypassing the Play Store could severely threaten its earnings.

One internal memo said Epic's decision posed a “contagion risk” to Google's business if other major developers like Activision, Valve, and Blizzard also abandoned the Play Store. Analytics projected a potential revenue loss of up to $6 billion in the next two years if this happened.

The Unprecedented $147 Million Offer

To combat this massive threat, documents revealed Google approved an unprecedented $147 million deal offered to Epic to get Fortnite on the Play Store.

No developer had ever received close to such a sum before. The proposed 3-year deal would provide Epic special benefits like prime store placement and marketing funds.

"This was an extraordinary, one-of-a-kind deal," testified Google executive Purnima Kochikar.

Epic Declined and Sued Google

However, Epic Games ultimately rejected Google's record-breaking offer in 2020. Instead, it filed a landmark antitrust lawsuit against Google, accusing it of monopolistic practices related to the Play Store.

The trial is ongoing. If Epic wins, it could significantly change how Google conducts business with the Play Store and app developers.

The huge rejected offer provides rare insight into how important Epic's decision was seen as a threat to Google's essential app store revenue streams. It reveals Google's fear of losing its tight grip over the lucrative Android app market.

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Source: The verge

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