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Konvoy Ventures is a thesis driven venture capital firm focused on the video gaming industry. We invest in infrastructure technology, tools, and platforms.

Apple & Google are About to Hate Instant Games

The new way to circumvent the app stores

Instant Games Will Pioneer the Circumvention of the App Stores

Over the past four months there have been monumental shifts by the platforms attempting to appease the smaller businesses and earn some good will back from the gaming community. Google charges a flat 15% across the first $1m in revenue each year for all developers and Apple charges 15% for all developers who generate under $1m. This is an important difference between Google and Apple, because Google is giving everyone a discount while Apple is only giving small businesses a haircut. It is no surprise that Apple has the less friendly terms given they are still the gatekeepers to the whale spenders on mobile. Tim Sweeney, the CEO of Epic Games, is not as impressed by these changes, stating that this is to appease the masses while they continue to gouge their money makers at the familiar 30% rate.

He also is bold enough to state they are moving “in near lock-step” which can be interpreted as an implication of price collusion.

Google and Apple are being pressed on whether their platform fees are worth it. They are under assault from their top producers (e.g. Epic Games), other social platforms attempting to become game distribution platforms (e.g. Bytedance, Snap), and the ever losing battle with the plummeting human attention span (having dropped 50% from 2000 to 2015). The average human attention span is now 8 seconds, which is not helping mobile game developers keep their users engaged through the downloading and onboarding process required in the app stores.  

With this perfect storm against the dominant mobile games distribution platforms, I believe instant games are poised for a breakout couple of years. People have often dismissed instant / or browser games as difficult to monetize and often cite quite a number of failures in the arena.  I believe instant games are comparable to Virtual Reality, many failures out the gate as it was simply too early. VR was too expensive at the start and instant games often weren’t impressive enough at the start to grab a user’s attention. I think we will see the temptation from developers to experiment more and more off the app store and experiment distributing their titles without the shackles of the app stores.

Something that is important to note is that even if the users are pushed off the app stores to the browsers, both Google & Apple are not exactly losers given Chrome controls 64.2% and Safari controls 19.1% of the world’s browser market share. Therefore, if game developers do start drawing users to a browser-first experience, I am personally bullish on Opera’s ability to ride the instant games push given they had the foresight to launch Opera GX in 2019.  Opera GX now has 7m users, up 350% YoY, and is correctly positioning themselves to capture gamers in a post-app store world.  We will also see platforms, like Snap has, build out support for instant games. These apps will not be as pressed to utilize games as a revenue driver, but instead as a retention driver which will be better aligned with instant game developers.