Apple under fire for making tens of billions of pounds from gamers who appear to have become addicted to mobile phone apps
Apple is under fire for making tens of billions of pounds from gamers who appear to have become addicted to mobile phone apps.
Court documents show that Apple made a staggering 64 per cent of its gaming revenues from just one per cent of smartphone gamers in 2017. These gamers spent an average of $2,694 (£1,985) annually.
Gambling experts said the figures were a ‘red flag’ and alleged that Apple is profiting from the kind of business tactics used by gambling firms. The figures emerged in a legal case over allegations that Apple has abused its power to take excessive commissions from third-party mobile phone apps.
‘Red flag’: Apple’s Tim Cook, with Laurene Powell Jobs, its founder’s widow
US Judge Yvonne Gonzalez Rogers said: ‘From what little evidence there is in the record, these consumers frankly appear to be engaging in impulse purchasing and both parties’ profits from this sector are significant. The Court…notes it as an area worthy of attention.’
Betting giants have faced relentless criticism for targeting a small number of consumers who become addicts and end up spending more than they can afford.
Apple, run by chief executive officer Tim Cook, takes 30 per cent commission on all purchases in games downloaded from its App Store. It does not publish figures for revenues from the store, but data provider Sensor Tower estimated it made revenues of $38.5billion in 2017. The court document revealed that gaming made up 76 per cent of App Store billings, or $29billion, suggesting that high-spending gamers netted $18.7billion for Apple in 2017.
Matt Zarb-Cousin, director of Clean Up Gambling, said: ‘This is a business model where you need to find people who will become addicted, and get them to spend their money until they have spent it all.
‘There are very similar features that we see in gambling, with behavioural addiction, and creating the sort of products that are more immersive. Social gaming uses a lot of the same tactics that the gambling industry uses.’
The court documents revealed that Apple has specifically designed its platform to cater to customers who spend large amounts of money on gaming. The judgment said: ‘The App Store is primarily a game store and secondarily an ‘every other’ app store.’
Dr Rachael Kent, an expert in the digital economy and a lecturer at King’s College London, said: ‘That is a huge sum for one person to be spending each year.
‘It is quite shocking, and it tells you that this is a regular practice. It is a red flag. With the figure being so high, it definitely raises concerns around gambling, addiction and compulsions.’
Gambling giants face tough new regulation in the Government’s Gambling Act. Children’s charities are particularly concerned that gaming apps – which do not require age verification – can be dangerous for children.
Barnardo’s co-chief executive, Lynn Perry MBE, said: ‘It cannot be right that some children are at risk of spending hundreds of pounds while gaming. There is a need to curb techniques that reward children for spending more and more time and money on gaming platforms, increasing the risk of addiction and related mental health problems.’
Apple did not respond to a request for comment.