Gaming stocks soar after judge rules Apple in favor of Epic

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A Zynga logo, the U.S. social game developer running social video game services.

Pavlo Gonchar | LightRocket | Getty Images

Gaming stocks like AppLovin and Zynga soared on Friday after a judge in California said Apple can’t force developers to use in-app purchases, an issue that’s long been a sticking point for mobile app companies.

Judge Yvonne Gonzalez Rogers ordered an injunction Friday, ruling that Apple can no longer prohibit developers from including links that drive users away from Apple’s store, where the company takes 15% to 30% of gross sales.

The ruling was the result of a lawsuit filed by Epic Games, developer of Fortnite.

“This allows for companies to dramatically increase revenues and reduce their cost of goods,” said Dan Burkhart, CEO of Recurly, which processes subscription transactions for app developers. “Gaming companies are certainly going to be one of the most significant beneficiaries of this. Streaming media, entertainment and publishing — these categories are all going to greatly benefit.”

AppLovin, which owns several game studios, climbed more than 10%, while mobile game developer Zynga rose about 9%. Playtika, an Israeli game company that’s had numerous popular iOS apps, jumped more than 9% and Roblox, a gaming app for kids, rose more than 4%.

In recent weeks, Apple has made several changes to its App Store rules, enabling some companies to access lower commission rates or avoid mandatory 15% to 30% cuts. Earlier this month, the company said that content subscription apps could provide a link out to their website, enabling the developers to better convert potential iPhone customers to subscribers.

Game stocks weren’t the only ones to rally on Friday. Other companies that pay revenue to app-store operators, including Spotify, Match and Duolingo, also rose on the news.

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