The Battle Royale over in-app payments: A game changer for the mobile gaming economy?

17 / 05 / 2022

With 2.8 billion players, mobile gaming is a huge. Continuous growth is expected, particularly driven by emerging markets with key mobile gaming payments.



  • With 2.8 billion players, mobile gaming is a huge industry generating 93.2 billion US dollar in 2021. Continuous growth is expected, particularly driven by emerging markets.
  • Today, mobile game distribution is closely tied to Apple and Google’s app stores. These digital storefronts’ service fees and developer guidelines influence both the economies of mobile games and the user experience, as well as payments.
  • Regulatory changes in South Korea, US and EU on app stores will open doors to alternative payment systems in mobile apps. This will have strong implications for the mobile gaming economy. The flexibility to enable alternative payment options will benefit developers and players. 

In August 2020, Epic Games announced Epic direct payment, a 3rd party payment system intended to facilitate in-game sales for its flagship game Fortnite on mobile platforms. Apple’s subsequent decision to remove Fortnite from the App Store triggered a yearlong lawsuit. This changed the mobile gaming payments landscape forever.

The high-profile case is emblematic of the turmoil currently taking place in the sector. After years of discord, Apple and Google’s app stores and their practices are being challenged.

At the heart of the battle are game developers’ freedom to choose how they handle payments and the possible implications for the future of the gaming ecosystem.

The dynamics of mobile game distribution

Video gaming is a massive industry. Globally, gaming generates more revenue than movie box office and music combined. Mobile games account for more than half of the industry revenue and nearly 70% of app store revenues

The distribution of these games is a complicated and costly business. To a great extent, the app stores enabled today’s thriving mobile gaming ecosystem by solving the problems of distribution and billing for developers. App stores helped game developers reach a global audience and brought millions of new players to gaming.

In-app billing through the app stores created a near-frictionless buying experience and kept the payment process consistent across apps, which reduced friction for users and helped drive conversion. It streamlined free-to-play not only as a viable business model but as the dominating one and fuelled many of the mobile games that are thriving today.

In return, the app stores are charging developers 15-30% of their mobile revenues. Furthermore, the app stores restrict users' pay for games and in-app purchases. For example, payments through third-party providers are prohibited, and developers are not allowed to communicate to their players about other payment options in the game. Failure to comply can lead to their game’s removal from the app store (as in the case of Fortnite).

Regulatory changes on the way

In the past few years, a growing chorus of voices from businesses and regulators are challenging the app store business models and practices. Pushes by governments on the regulations side is very likely to change the gameplay for mobile game payments.

South Korea paves the way

One of the world’s largest gaming markets, South Korea was the first country to request app stores to allow alternative ways to pay. In August 2021, the South Korean government passed a bill that prohibits "the act of forcing a specific payment method to a provider of mobile content". The law allows mobile game developers to implement alternative payment systems to accept payments from their customers in South Korea. The new regulation took effect in March 2022.

United States: Open App Markets Act

In September 2021, in the Epic v.s Apple lawsuit, a US court ordered that Apple should not prevent developers from informing users of other in-app payment systems. The same year, the Open App Markets Act bill, which envisions a more competitive app store ecosystem, was introduced.

The bill, which is being debated in Congress at the time of writing (April 2022), would prevent app stores with more than 50 million users in the United States from forcing developers to use the app store's own payment system exclusively. It effectively allows developers to circumvent Apple and Google’s current 15-30% charges for purchases made through the app stores. It also mandates that developers should be permitted to communicate directly with their users for legitimate commercial purposes.

EU: Digital Markets Act

In the EU, legislators are also implementing landmark regulations. The new Digital Markets Act (DMA) aims to “make the digital sector fairer and more competitive” by regulating the practices of big tech companies defined as ‘gatekeepers’. Under the DMA definition, both Apple and Google’s app stores will be considered as ‘gatekeepers’.

The Digital Markets Act stipulates that gatekeepers can no longer require app developers to use certain services, such as specific payment systems, to be listed in the app stores. If a gatekeeper violates these rules, it risks a fine of up to 10% of its total worldwide turnover.

The Digital Markets Act is expected to finalize in October 2022.

Latest from the app stores

Apple and Google are concerned the new regulations could jeopardize consumer privacy, result in poorer user experience, and put users who purchase digital goods from other sources at risk of fraud.

Following the new regulation in South Korea, Google announced that developers “will be able to add an alternative in-app billing system, alongside Google Play’s billing system for their mobile and tablet users in South Korea”. Google will “reduce the developer’s service fee by 4%”. Lately, Google also announced  it will be “exploring user choice billing”. This latest initiative will allow select companies such as Spotify to offer additional third-party payment options in their apps in select markets.

Apple also plans to allow developers to use third-party payment options in South Korea at a reduced charge. South Korea provided a test case for the rest of the world. With the anticipated introduction of Open App Markets Act and Digital Markets Act, similar rules may be introduced in US and Europe.

Benefits of alternative payment systems

Mobile game developers will likely have the flexibility to implement alternative payment options in apps within the next few years. This will be good news for developers.

Without a doubt, the current in-app billing systems of Apple and Google will still meet the needs of many developers, as they offer convenience for players and take the complexity of implementing payments out of the hands of game developers.

However, different profiles of developers, especially larger mobile game studios which have more development resources available, might want to take advantage of the new rules and benefit from the flexibility it will unlock. These potential benefits could include:

Increased margins: Lowered app store service fees will allow developers to retain more profits from sales. They can pass on the savings to benefit their customers. A strategic payment partner can also offer a competitive payment strategy that allows mobile games to scale globally while keeping the payment costs low.

Offer players their preferred payment methods:  Alternative payment methods prevail in many gaming markets. Developers will have the flexibility to offer the most relevant payment methods that are familiar to their players to increase conversion and player satisfaction.

Increased flexibility to customize the user experience: Developers can gain greater control over players’ buying journeys such as the user interface (UI) design. While the current in-app billing system offers the benefits of streamlined efficiency of paying, developers will enjoy more freedom of designing a payment experience that’s more integrated with the gameplay.

Better insights and capacity to build engagement: Developers will gain increased insights into their users, enabling them to act on important decisions such as game design or monetization strategy. In addition, they can handle customer requests such as refunds directly – it gives developers direct insights when something needs to be improved and keeps the player satisfaction high.

gaming mobile lady

The new mobile gaming payment experience

So what might the payment experience look like for mobile games with alternative billing? There are likely two main ways mobile game developers can implement: 

  • In-app links directing players to external payment interfaces
  • Payment within the mobile game’s native user interface

With in-app links, players are redirected to the developers’ website or to another site where they can complete the payment. This method is easy to implement and can be suitable to facilitate one-off purchases (e.g. access to play, upgrades) or paying for game subscriptions. In some markets, in-app links might be a first step (or even the only possibility) to access alternative billing, depending on the final settlements of regulation and responses of app stores. 

Payment within the game’s native user interface will offer players to check out with a third-party payment system in the app (just like we pay for physical goods in apps today). This can have further implications in the gaming context – it will allow developers to customize the purchase journey and offer a more connected experience with the gameplay to delight their players. It can be beneficial for games that monetize via in-game purchases. It can also enable an enriched payment experience for future gaming use cases on mobile platforms, such as VR/AR or what the future metaverse might bring. 

That being said, in the shorter term, the decision to adopt alternative payment systems will be an important strategic decision for many game developers – it will be a deliberate calculation of economic benefits and other trade-offs such as user experience. For all developers, it’s important to consider what their customers will prefer. This will help when customers are spending money on your platform.

The past couple of years has seen a rapid app development of mobile games and an increased number of global mobile gamers. Regulatory changes underway in many major gaming markets are likely to have significant implications for the future of mobile gaming payments experience and payments. One thing is certain: how mobile game developers handle payments in the future will be different from how they do it now—and we believe it will be for the better, for developers and players alike.

Learn more about the ongoing “battle royale” over game developers’ freedom to choose their own in-app payment system by sending us an email.

Jie Xue

Product Innovation Manager, Solution & Innovation, Worldline
As Product Manager Innovations at Worldline, Jie focuses on understanding emerging trends and their intersections with digital payments, with a consumer-driven approach. She leads various innovation initiatives at Worldline where she helps translate these market needs into proof-of-concepts or innovative product offerings, in areas such as video gaming and retail. Prior to Worldline, Jie has worked in startup and innovations space in Europe and China. She shares a passion for tech and emerging markets.