Apple’s (NASDAQ: AAPL) loss being the ‘little guy’s’ gain appears to be the bull case behind gaming stocks soaring on Friday.
That loss comes in the form of a federal judge issuing an injunction that means Apple can no longer stop developers from directing users away from Apple in-app purchasing.
Why is this important?
Well, Apple reportedly made $67 billion from App Store purchases in 2020 — the vast majority of which comes from the 15%-30% cut it takes from third party app developers who use the store.
The ruling above comes amidst Apple’s long-standing courthouse duel with ‘Fortnite’ developer, Epic Games. And now, for the first time, app developers who flog their wares on the App Store can actually link customers to external sign up pages, meaning that Apple gets no slice of the pie.
This will be a big boon for subscriber-reliant businesses such as Spotify or Netflix, but also for the many game developers who rely on in-app purchases for revenue generation. As a result, shares in the likes of Zynga, AppLoving, Roblox, and more are soaring.
Although this does not automatically mean that users will sign up via external sites, it is a big step in allowing businesses to circumvent Apple’s expensive cut, and will likely result in better profit margins for all of these companies.
If you’re an Apple investor though, don’t worry. This is far from the end of the world for the United States’ most valuable business. As well as this, the ruling judge in its Epic Games suit also ruled that Apple was not a monopolist and “success is not illegal”, meaning that no precedent has been set for condemning Apple’s App Store practices.
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Editor at MyWallSt
Jamie is the Content Editor here at MyWallSt. His favorite stock is Apple, which is also the first stock he ever bought. Jamie is not only a big fan of its products, but he believes that the tech giant has a whole lot more to give the world, and hasn't even scraped the surface of its potential.