Epic Games buys artist community ArtStation, drops commissions to 12% – TechCrunch

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On the same day as Fortnite maker Epic Games goes to trial with one of the most significant legal challenges to the App Store’s business model, it has announced the acquisition of the artist portfolio community ArtStation — and immediately lowered the commissions on sales. Now standard creators on ArtStation will see the same 12% commission rate found in Epic’s own Games Store for PCs instead of the 30% before. This reduced rate is meant to be an example to the broader community of what a “reasonable” commission should look like. This could become a point of comparison with the Apple App Store’s 30% commission for more prominent developers like Epic as the court case proceeds.

ArtStation today offers a place for creators across gaming, media, and entertainment to showcase their work and find new jobs. The company has long relationships with Epic Games, as many ArtStation creators work with Epic’s Unreal Engine. However, ArtStation has also been home to 2D and 3D creators across verticals, including those without Unreal Engine. The acquisition won’t change that, the team says in its announcement. Instead, the deal will expand the opportunities for creators to monetize their work. Most notably, that involves the commission drop. For standard creators, the fees will drop from 30% to 12%. The commission goes even lower for Pro members (who pay $9.95/mo for a subscription) — from 20% to 8%. And for self-promoted sales, the fees will be just 5%. ArtEngine’s streaming video service, ArtStation Learning, will also be free for the rest of 2021, the company notes.

However, the slashed commission is perhaps Epic’s most critical change to ArtStation because it gives Epic a specific example of how it treats its creator communities. It will likely reference the acquisition and the commission changes during its trial with Apple, its own Epic Games Store, and its similarly low rate. Epic’s move had already prompted Microsoft to lower its cut on game sales, too, having recently announced a 30% to 12% drop.

In the trial, Epic Games will try to argue that Apple has a monopoly on the iOS app ecosystem and that it abuses its market power to force developers to use Apple’s payment systems and pay its commissions on the sales and in-app purchases that flow through those systems. Like several other more prominent app makers, Epic Games would instead use its payment systems to avoid the commission — or at the very least, be able to point users to a website where they can pay directly. But Apple doesn’t allow this, per its App Store guidelines. Last year, Epic Games triggered Fortnite’s App Store expulsion by introducing a new direct way to pay on mobile devices, which offered a steep discount. It was a calculated move. Apple and Google immediately banned the game for violating their respective app store policies. And then Epic sued.

While Epic’s fight is technical with both Apple and Google, it has focused more of its energy on the former because Android devices allow sideloading apps (a means of installing apps directly), and Apple does not. Meanwhile, Apple argues that Epic Games agreed to Apple’s terms and guidelines and then purposefully violated them to get a special deal. But Apple says the guidelines apply to all developers equally, and Epic doesn’t get an exception here.

However, throughout the U.S. antitrust investigations into big tech, it was discovered that Apple did make special deals in the past. Emails shared by the House Judiciary Committee as a part of an investigation revealed that Apple had agreed to a 15% commission for Amazon’s Prime Video app at the start when typically subscription video apps are 30% in year one, then 15% in year two and beyond. (Apple says Amazon qualified for a new program.) Plus, other older emails revealed Apple had several discussions about raising commissions even higher than 30%, indicating that Apple believed its commission rate had some flex.

Ahead of today’s acquisition by Epic Games, ArtStation received a “Megagrant” from Epic during the height of the pandemic to help it through an uncertain period. This could have pushed the two companies to discuss further deeper ties from now on. “Over the last seven years, we’ve worked hard to enable creators to showcase their work, connect with opportunities and make a living doing what they love,” said Leonard Teo, CEO, and co-founder of ArtStation, in a statement. “As part of Epic, we will be able to advance this mission and give back to the community in ways we weren’t couldn’town while retaining the ArtStation name and spirit.”

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