Did you know that platforms such as Google Play, the App Store, and Steam make 30% of whatever game developers earn from sales of apps? This isn’t limited to only the sale of the app itself, but extends to 30% of revenue earned from in-app purchases as well! Needles to say, that’s a lot of money game developers are shelling out to the companies behind these platforms. Many feel that this cut is excessive, and now, a new Estonian startup is coming together
Regarding the over-the-top fees for using Google Play, the App Store, and Steam, Ultra co-CEO Nicolas Gilot has stated that “There’s no reason why such a big fee should be taken. The business model is totally viable without that.” Ultra aims to prove this statement by charging only a 15% fee – literally half of the industry standard.
When it comes to platforms that provide game developers access to a large customer pool, the number is rather limited. Given this to be the case, Google, Apple, and Valve seem to believe they can charge whatever they want to charge developers hoping to leverage their massive pool of customers. Big game companies are already starting to fight back against these extortive rates. Just last month, Epic Games announced that the Android version of Fortnite would not be downloadable through Google Play
The challenge for Ultra is incentivizing users to download games through their platform in order to grow a solid user base. Given the nature of mobile apps, this might actually be a lot simpler than the apparent strength of its competition might lead you to believe. Developers already want to upload onto the platform simply due to the lower fees. In order to help push users to downloading the game through Ultra as opposed to one of its bigger competitor platforms, game developers could simply offer extra in-game perks to those users. How many gamers wouldn’t sign up for the platform to download a game if that meant they could earn a big in-game currency bonus? It’s a no-brainer – free to play players know that in-game currency is hard to come by and thus seize every opportunity to acquire a bit more.
Ultimately, the problem with Ultra might just be that its sole selling point against its competition is price. If they prove to be successful, it might just be a matter of time before a new competitor arises seeking to undercut them as well, pushing the industry into a price war in the mud where no one emerges a winner.
Featured Image Source: Moz
