Semiconductor stock Nvidia (NASDAQ:NVDA), a powerhouse in the graphics processing units used to power video games, is enjoying a modest bump in early trading on the Nasdaq Stock Market this morning. As of 10:18 a.m. ET, Nvidia shares are up 2.1%.
You can probably thank Apple (NASDAQ:AAPL) for that. And Fortnite.
You've heard about the legal rumble that erupted between Apple and Fortnite maker Epic Games in 2020, right? How the former enjoyed charging the latter 30% of revenue every time a gamer made an in-game purchase using an iPhone -- but the latter didn't enjoy this nearly so much?
When Epic rebelled against this payments system, and introduced a method permitting gamers to pay it directly for in-game purchases (cutting Apple out of the loop), Apple retaliated by banning new Fortnite downloads from its App Store, setting the stage for an "epic" lawsuit against Apple. Ever since, it's been impossible to download Fortnite on an iPhone or iPad -- but thanks to Nvidia, you may not need to anymore.
As Gizmodo reported yesterday afternoon, Epic and Nvidia have teamed up to exploit a loophole to Apple's Fortnite app ban. By subscribing to Nvidia's GeForce Now service on Safari, gamers will soon be able to use Apple's Safari browser on their iPhones to play Fortnite via Nvidia's service. In this way, says Gizmodo, GeForce Now subscribers should have "full functionality" playing Fortnite on an iPhone or iPad. Indeed, Gizmodo notes that GeForce Now is "specifically optimized for mobile devices."
At last report, GeForce Now boasted 12 million subscribers -- and was growing 33% annually. Nvidia's opportunistic alliance with Epic to get around Apple's Fortnite ban promises to boost that subscriber number even more. As Techacake.com confirms, "Fortnite is [still] the most popular battle royale game in 2022," with as many as "4 million concurrent players every day," and "more than 80.4 million Fortnite monthly active users."
Granted, not all these users will now immediately begin playing Fortnite on Apple devices. (In fact, GeForce Now's Fortnite service is actually only in beta right now, with a waitlist to sign up.)
Granted, too, most GeForce Now subscribers who do sign up won't be paying subscribers, having signed up for the free version of the service instead. Still, investors can probably safely assume that Nvidia will add at least some new subscribers from this move -- subscribers it wouldn't have gotten but for the Apple-Epic legal kerfuffle. That's an incremental positive for Nvidia stock, and a decent justification for today's modest rise in stock price.