Apple made more profit from games in 2019 than Nintendo, Sony and Microsoft combined

Nintendo’s buoyant position in the video game market is good news for longtime fans of the Japanese company. After weathering the storm of the Wii U era, Nintendo’s refocused ‘hybrid’ strategy has paid off, and the Switch remains one of the most popular tech products on the market, even after more than four years on sale. This week, the company launches the Switch OLED, an iterative update that should boost hardware sales as we move into 2022.

However, a recent report from The Wall Street Journal puts Nintendo’s success in perspective. According to the news outlet, figures released as part of Apple’s recent antitrust test reveal that in 2019, it made more operating profit from games than Nintendo, Microsoft, Sony, and Activision Blizzard combined.

The total was a whopping $ 8.5 billion, although it is worth noting that Apple has said that the operating margins discussed during the test were incorrect and therefore the figure is too high. Even taking that into account, it is clear that Apple is making a good sum from games, which is ironic when you consider that it does not produce any of its own.

The staggering figure is generated through the 30% cut Apple takes from all digital purchases through its App Store, which is used on millions of devices around the world, including iPhones, iPads and laptops. Even Nintendo is contributing to that figure, as several of its games: Super mario run, Animal Crossing: Pocket Camp and Pokemon go (Nintendo is co-owner of The Pokémon Company) – are available on iOS.

It’s worth noting that Apple’s digital sales ‘cut’ is believed to be the same as Nintendo’s on the eShop, and it is understandable that the platform owner should take advantage of every sale made on their platform. The difference here, of course, is that while Nintendo has sold an impressive 90 million switches in the last four years, Apple sold 196.9 million iPhones in 2020 alone. The number of iOS devices in active use today It will completely outshine the Switch install base, which explains the incredible profits Apple can make from gaming.

Apple’s position has recently been challenged by Epic Games, the maker of Fortnite, which filed a lawsuit against Apple, claiming it had a monopoly on how software is sold on its devices by forcing developers and publishers to use their own in-app purchasing system. Fortnite is free to play and relies on in-app purchases to generate profit, purchases that are subject to Apple’s 30% cut.

In the test, Apple pointed to the fact that other platform owners, such as Google and Microsoft, use exactly the same system. U.S. District Judge Yvonne Gonzalez Rogers agreed for the most part, but also ordered that Apple allow developers to offer payment methods within their own apps, payment methods that would bypass Apple’s App Store and prevent cutbacks. 30%.

This means that games like Fortnite could bring in millions for their publisher on iOS without giving Apple a single penny, and that could have long-term ramifications for other platform holders, including Nintendo.