Nintendo, Sony, and Microsoft all made a lot of revenue in the gaming industry, but none of them compared to Apple's 2019 earnings. According to a recent report, Apple is out-earning all of them combined due to its revenue share.

Despite the fact that Apple doesn't make games, the company earned $8.5 billion in operating profits from gaming in 2019. This number comes from the 30% cut from all purchases made on the App Store, with the developers of these mobile games taking the lion's share. The revenue share allows Apple to remain such a strong contender in the gaming sphere without developing games itself.

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According to a recent report, mobile gamers have spent $45 billion on App Store games in the 2020 fiscal year. Most of this spending came from China and the United States, with 31% of the revenue coming from China and 26% in the United States, respectively. The top 1% of these mobile gamers made up for over 64% of sales on the App Store, spending nearly $2,700 each year.

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From the $45 billion spent on the App Store in 2020 fiscal year, an estimated $13.5 billion went to Apple, showing increases year-over-year. According to these estimates, the $13.5 billion only accounted for about 5% of Apple’s overall revenue from 2020 which was around $275 billion. The biggest factor to Apple's overall revenue was in iPhone hardware sales, accounting for 50% of revenue in the fiscal year.

While Apple's 2019 earnings include money spent in Fortnite, the game has been taken off the platform since Epic Games filed a lawsuit against Apple in 2020. Despite losing the Fortnite V-Bucks money, which was making Apple about $354 million in revenue, Apple seems to be doing fine. Analysts are projecting that this mobile gaming revenue will just further increase as more games come to the platform.

Included in the 2019 and 2020 Apple sales figures is the service category which encompasses things such as Apple Music, iCloud, Apple TV, advertising, and extended warranties. These generated roughly $53.8 billion in sales for the 2020 fiscal year. Analysts are projecting that the gaming industry's global revenue is expected to nearly double from 2016's figures to $198 billion in 2024. The coming revenue growth for mobile games according to some projections will peak at $103 billion in 2024.

Considering Apple's revenue share is something Epic Games contested during its recent lawsuit with Apple, more companies may lean towards Epic Games' idea of revenue share. It's currently unclear which games contributed most to these sales figures. While some gamers may be shocked by Apple's profits in gaming, the platform's success goes to show why Google Stadia, Xbox, and more are looking to expand onto mobile in a big way.

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Source: Wall Street Journal