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The Epic Games Store is going to be pre-installed on millions of smartphones from a major EU carrier.
Many Bothans may have died, but the rebels now have the plans for the Death Star. The next steps are all about time and space and a smart strategy for dozens of X-Wing Starfighters, but we can see a clear path for third-party app stores to reach mass distribution and maybe even adoption.
And while that’s true in the EU today for Android, it’s also going to be true at some point in the near to mid-term future for the iOS App Store in Europe.
But it’s not just Europe.
South Korea’s on that path. Japan’s Fair Trade Commission is trending this way. And in the U.S. the proposed Open App Markets Act seeks to prevent app store operators from requiring exclusive use of their own payment systems and from unfairly promoting their own apps over competitors
Epic Games Store to millions of phones, maybe 100s of millions
Epic Games, the makers of Fortnite and long-time App Store rebels, are in business. Yesterday the companies announced a “long term partnership” to bring the Epic Games Store to millions.
From the Epic press release:
“As a first step in this partnership, the Epic Games Store will now be pre-installed on all new compatible Android devices on the Telefónica network in Spain, UK, Germany and Spanish-speaking Latam. Players will now be able to more easily download Fortnite, Fall Guys and Rocket League Sideswipe as well as third party games in the future. This is just the beginning, and over the next year the companies plan to expand the partnership and bring more benefits to mobile players across the Telefónica network.”
Epic Games and Telefónica have some history: the 2 companies partnered on “interactive music adventures” during Covid, with over 10 million players participating in a virtual concert and entertainment experience.
And Telefónica is not some tiny player. The company has almost 400 million customers in Europe and Latin America: 1 rich iOS-heavy region and 1 developing Android-centric region.
A dream come true for carriers
This is, of course, a dream come true for carriers.
Carriers have long felt underappreciated and undervalued. After all, their wires (initially) and wireless networks (now) are the highways and byways of the information age. Thousands of startups have made trillions of dollars from that interconnectivity, and the most valuable companies on the planet couldn’t exist without it.
And yet carriers are worth fractions of the companies that they enable.
Telefónica is worth less than $30 billion. AT&T is worth less than $200 billion. But Apple, Google, and Meta are all trillion-dollar companies, with Apple at a current valuation currently climbing within shouting distance of an almost-unbelievable $4 trillion.
So how can carriers monetize better?
By not just acting as the dumb pipes that they hate being called, and by taking an active role in the digital economy via — of course — taking their cut of in-app purchases. Globally, that’s worth easily $200 billion, and just Apple’s revenue after expenses in 2024 alone is likely around $8 billion.
Details haven’t been released, but this is the deal: some kind of revshare is happening between the Epic Games Store and Telefónica.
And the same could happen for other carriers, who would then have tremendous incentive to push the Epic Games Store — or whatever store they pick — as the primary app source for their customers.
And there’s plenty to pick from:
- Samsung Galaxy Store
- Huawei AppGallery
- Xiaomi Mi GetApps
- OPPO App Market
- VIVO App Store
- Amazon Appstore
Plus, of course a rag-tag bunch of other third-party app store competitors like Appland, GetJar, AltStore PAL, Setapp Mobile, and more.
The empire strikes back
Of course, distribution alone is no panacea. It’s also no guarantee of consumer adoption.
And the empire (AKA Apple’s App Store and Google’s Google Play) has massive advantages in scope and scale, in brand recognition, in ease of use, in embedding into people’s existing mobile experience, and just in basic muscle memory.
If you’re already using the official App Store or Google Play (and that’s almost all of us) the path of least resistance is to do nothing at all … to not switch to some new and unproven option. Especially 1 that may not have Instagram, or Awesome App #87, or whatever you want right now, or whatever randomly gets hot tomorrow.
The strength of the official app store is in the promise: “there’s an app for that.” That promise is unlikely to be true on the new rebel app stores popping up.
Still, there will be ways for the rebels to win mindshare and market share:
- Discounts (cheaper in-app purchases)
- Special offers
- Exclusive games … only available on …
- Vertical-specific options
- Geo-specific options
- Unique features
- Influencers
Epic Games Store: a crack in the wall
The thing is this: the Epic Games Store getting significant distribution is a crack in the wall. It’s the leading edge of the wedge.
The interesting part is what’s going to happen after, over the next few years. And in the next few countries and states to adopt legislation similar to the EU’s Digital Markets Act.
Ultimately, the trend is towards more openness in mobile in-app payments as well as app marketplaces.
Which is going to bring us to a very interesting new reality in terms of App Store Optimization, app marketing, in-app purchase pricing. There’s also going to be very interesting developments in vertical-specific and geo-specific app marketplaces.
All of which will also have an impact on privacy regulations and technologies like ATT, SKAdnetwork/AAK, and Privacy Sandbox (AAK is already explicitly third-party app store ready). Different app marketplaces will have different rules on all these things, and may actually use those differences as marketing tactics to appeal to different app publishers.
It’s going to be a very interesting world …
