Gaming stocks rise after judge ruled Apple in favor of Epic
A Zynga logo, the American social game developer who operates social video game services.
Pavlo Gonchar | LightRakete | Getty Images
Gaming stocks like AppLovin and Zynga rose Friday after a federal judge said Apple can’t force developers to use in-app purchases, an issue that has long been a sticking point for mobile app companies.
U.S. District Judge Yvonne Gonzalez Rogers in Oakland, California issued an injunction saying Apple can no longer prohibit developers from inserting links that drive users away from Apple’s store, where the company generates 15 to 30% of gross sales .
The lawsuit came in a lawsuit from Epic Games, the developer of Fortnite.
“This enables companies to dramatically increase their sales and reduce their cost of goods,” said Dan Burkhart, CEO of Recurly, which processes subscription transactions for app developers. “Gaming companies are sure to be one of the biggest beneficiaries of this. Streaming media, entertainment and publishing – these categories will all benefit greatly. “
Shares in AppLovin, which owns multiple game studios, closed 8.85%, while mobile game developer Zynga rose 6.28%. Playtika, an Israeli games company with numerous popular iOS apps, rose 6.08% and Roblox, a game app for children, closed 1.77%.
In the past few weeks, Apple has made several changes to its App Store rules that allow some companies to access lower commission rates or avoid mandatory 15-30% cuts. Earlier this month, the company announced that content subscription apps could provide a link to their website so developers can better convert potential iPhone customers into subscribers.
Game stocks weren’t the only ones to bounce back after the injunction. Other companies that pay revenue to app store owners, including Spotify, Match Group, and Duolingo, also rose on the news.
Apple shares lost 3.31%.
SEE: That ruling could be a long-term victory for Apple