Nobody will win the Apple versus Epic Fortnite battle, not even consumers

Posted:
in General Discussion edited September 2020
On August 13, Epic, developer of the wildly popular battle-royale game Fortnite, began baiting Apple and Google into legal battles. The game developer is playing a game, and it is a strategic one with all to play for.

Playing Fortnight on iOS with a game controller
Playing Fortnight on iOS with a game controller


The Apple versus Epic drama started when Epic announced that they would be permanently lowering the prices on in-game purchases for Fortnite. Players on console, Mac, and PC, would automatically get the discount on all future purchases.

Those on mobile platforms -- such as iOS and Android users -- were given two options for payments. Players would be able to purchase through Apple or Google's in-app payment systems, or they would be able to pay Epic directly.

Epic incentivized players to pay them directly by offering substantial discounts over buying items through the App Store or Google Play's payment systems. Paying through Apple or Google would negate the savings, and players would be charged pre-discount prices.

Then Epic justified the move by saying that companies like Amazon and Best Buy were allowed to receive direct payments from customers without going through Amazon or Google.

Of course, this was in direct violation of both Apple and Google's terms of service. While it is true that companies like Best Buy and Amazon do take direct payments, they also offer customers physical goods and services. Physical products are stored, processed, and shipped through their networks.

Yet, digital goods are different. Digital goods are housed within Apple's well-known, easily accessible App Store. Digital goods are monitored by Apple for suspicious activity to keep Apple's consumer base safe.



Apple, for example, requires all digital goods to be subjected to a 30% commission fee -- a rule that has been in place for over a decade. The fee covers the cost of bandwidth and the routine safety checks, plus a courtesy fee for allowing the app to be hosted on the App Store.

The 30% rule is relatively standard for digital services -- Google Play charges the same fee, as does Steam, Epic's primary desktop gaming competitor.

Unsurprisingly, within eight hours, Apple had kicked Fortnite off of the App Store, and later publicly encouraged Epic to work with them to bring the game back to iOS. Shortly after, Google Play also removed Fortnite, citing that they'd also violated Google's terms of service.

It was a calculated move on Epic's part. The CEO, Todd Sweeney, has long been critical of these commission fees. In July, he went on record calling Apple's App Store an "absolute monopoly."

Later, Fortnite tweeted that they would be premiering a new short animation titled "Nineteen Eighty-Fortnite," a less-than-subtle reference to Apple's 1984 Super Bowl commercial (and George Orwell's dystopian, social science fiction novel).

Fortnite Party Royale will premiere a new short: Nineteen Eighty-Fortnite. Join us at 4PM ET. pic.twitter.com/BWvndK3gDt

-- Fortnite (@FortniteGame)


Epic then announced that they had begun the legal process to sue Apple in response to the company removing Fortnite from the App Store, less than one hour after Apple had removed the game.

The complaint alleged that Apple had become a "behemoth seeking to control markets, block competition and stifle innovation." It claimed that the company's size and reach "far exceeds that of any technology monopolist in history."

Epic later filed paperwork against Google over alleged anti-competitive practices. Like its fight with Apple, the developer paints a picture of duplicity -- mocking Google's already ridiculed "Don't Be Evil" motto -- in its suit.

Understanding Epic's motivations are critical. While iOS accounts for a minority of Fortnite players, they account for a tremendous amount of revenue in the App Store.

In June, Finbold reported that Fortnite was the top earner in the App Store, averaging $2.75 million in daily revenue.

What happens next

Epic's lawsuit does not ask for a jury trial, and while only they can know their reasoning, it looks like they want the trial by jury to happen outside the courts. They want public opinion to go against Apple.

The suit does, though, keep repeating that Apple has "injured" the games company by its actions. Apple's lawyers are surely going to just spread their arms at that one. They'll point out that Epic has profited from the App Store for over two years.

Apple will doubtlessly say that Epic therefore knew the rules well enough to make money -- and now well enough to make certain that it was removed from the store on schedule.

Somewhere within Epic there is a game plan or maybe just a Gantt chart which laid out when it would be ready to launch the suit, when the video would be finished, and so when it had to be booted out of the app store.

You have to assume that the plan continues far beyond this stage, and that Epic has a strategy that it is following. It's an expensive strategy, with this amount of money being lost each day it's off the App Stores, but then all marketing costs money.

This truly could be a marketing expense, and if so, there will be more spent on the campaign later.

Apple may play its regular card for getting out of monopoly arguments and point out that Fortnite earns much more from its other platforms. Apple could also make a case that it is the one being injured, and even that it might be in retaliation for trade disputes.

Chinese firm Tencent owns 40% of Epic, and Tencent is one of the firms affected by the current US Administration's various policies.

But whether it tries that China defense or not, the way this has played out so far makes the next stage reasonably likely. Apple is going to win this legal case -- it's even likely that Epic will end up having to pay costs.






Even if that is not what will certainly happen, though, and even if it is not what Epic wants for any reason, the company knows it's likely and is ready for it. It will be ready to pay up if it has to, but it will also be ready to make its next move.

The question then is not really what that specific next move is, but what the overall aim of the game could be. If Apple is likely to win the legal battle, it is also likely to lose in the court of public appeal.

In a two-horse argument, you can win support by making people disapprove of your rival. If it ends up with Apple seeming like the bad guy, Epic will automatically be the good one.

That's the point when Epic will launch its own iOS App Store.



Keep up with AppleInsider by downloading the AppleInsider app for iOS, and follow us on YouTube, Twitter @appleinsider and Facebook for live, late-breaking coverage. You can also check out our official Instagram account for exclusive photos.
dewme
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Comments

  • Reply 1 of 91
    tmaytmay Posts: 5,498member
    Discovery won't be kind to Epic Games, should this come to trial. 

    https://gamingmonk.com/post/is-epic-games-founder-tim-sweeney-an-anti-consumer-hypocrite

    Just another hypercompetitive businessman, just another Spotify.

    Apple will ultimately, I suspect, be able to continue its current policy, but at a lower rate, and that will have to happen via legislation, which is extremely difficult to actually create. 

    MacQccornchipBeatsjdb8167macpluspluslolliverwatto_cobra
  • Reply 2 of 91
    SpamSandwichSpamSandwich Posts: 33,408member
    Games are not essential to life. Somehow we’ll all survive whether or not these Epic nitwits remain on the App Store.
    flyingdpmjtomlindocbburkmwhitethtmacplusplusspock1234lolliverjony0watto_cobra
  • Reply 3 of 91
    Rayz2016Rayz2016 Posts: 6,957member
    Somehow we’ll all survive whether or not these Epic nitwits remain on the App Store.
    Apple and Google certainly will. 
    MacQcdocbburkdonjuanspock1234lolliverjony0watto_cobra
  • Reply 4 of 91
    How would consumers not win? Say Epic wins and they get the fee reduced, the ability for direct payments, or more hopefully, we get full sideloading on iOS. For the first situation we could get cheaper apps, as developers could reduce the price of the apps themselves or the price of In App Purchases, something good for the consumer. For the second we got proof that it would be better for the consumer, as the price of V-Bucks was cheaper with the option for directly purchasing the V-Bucks from Epic rather than through Apple's processor. For the third consumers wouldn't be beholden to the App Store. Stadia and Xcloud would be usable on iOS, Much more open source development could occur on iOS because developers wouldn't have to subscribe to a $100 fee to host their apps on the store. Hell, with sideloading we could get app stores that actually show off more than regurgitate the top apps of each category.
    Pascalxx
  • Reply 5 of 91
    no winners? Are you mad? The clear winners are the [redacted] Laywers. There is work for the next decade on this case sitting there ready for the taking.
    frantisekBeatscpsrodonjuansvanstromjdb8167lolliverjony0watto_cobra
  • Reply 6 of 91
    How would consumers not win? Say Epic wins and they get the fee reduced, the ability for direct payments, or more hopefully, we get full sideloading on iOS. For the first situation we could get cheaper apps, as developers could reduce the price of the apps themselves or the price of In App Purchases, something good for the consumer. For the second we got proof that it would be better for the consumer, as the price of V-Bucks was cheaper with the option for directly purchasing the V-Bucks from Epic rather than through Apple's processor. For the third consumers wouldn't be beholden to the App Store. Stadia and Xcloud would be usable on iOS, Much more open source development could occur on iOS because developers wouldn't have to subscribe to a $100 fee to host their apps on the store. Hell, with sideloading we could get app stores that actually show off more than regurgitate the top apps of each category.
    Sideloading isn’t a win for consumers, it introduces significant security risks.

    aderuttertmayfrantisekBeatsigorskyaaarrrggghdonjuanmike1jdb8167randominternetperson
  • Reply 7 of 91
    The problem is Apple calling out to Epic to negotiate.  

    Do small developers get this kind of treatment?  They’re stuck with that 30% whereas the big boys might negotiate 15%.  Not exactly a level playing field...
    Beatssvanstromdysamoriajony0
  • Reply 7 of 91
    How would consumers not win? Say Epic wins and they get the fee reduced, the ability for direct payments, or more hopefully, we get full sideloading on iOS. For the first situation we could get cheaper apps, as developers could reduce the price of the apps themselves or the price of In App Purchases, something good for the consumer. For the second we got proof that it would be better for the consumer, as the price of V-Bucks was cheaper with the option for directly purchasing the V-Bucks from Epic rather than through Apple's processor. For the third consumers wouldn't be beholden to the App Store. Stadia and Xcloud would be usable on iOS, Much more open source development could occur on iOS because developers wouldn't have to subscribe to a $100 fee to host their apps on the store. Hell, with sideloading we could get app stores that actually show off more than regurgitate the top apps of each category.
    Are you mad?  You are only looking at Epic, and dreaming that all developers would be 100% on the up and up.  Here’s a big part of the down side: 1) it would allow any company making apps an opportunity to get your payment information without a check to see how secure they keep that info, and without the protection from unauthorized payments that Apple gives you.  2) Side loading apps and all these “app stores you talk about are also opportunities to get malware and viruses on your phone, going around the protections Apple has for us, making it far less secure, like Android with less google vacuuming of personal info.  Add that to your comment and you get a fuller picture.  It looks a lot more like Epic is just trying to push public opinion in their favor hoping for a reduction of the fees. If you want that kind of risk, buy an android phone and quit crying.   
    mark fearingaderutteromar moralesBeatsaaarrrggghmwhitethtPizzakoerierDogpersonFileMakerFeller
  • Reply 9 of 91
    On August 13, Epic, developer of the wildly popular battle-royale game Fortnite, began baiting Apple and Google into legal battles. The game developer is playing a game, and it is a strategic one with all to play for.

    It was a calculated move on Epic's part. The CEO, Todd Sweeney, has long been critical of these commission fees. In July, he went on record calling Apple's App Store an "absolute monopoly." 
    Its Tim Sweeney dammit. Sweeney Todd is Tim burton's movie starring Johnny depp
    edited August 2020 Beatsrandominternetpersonmacplusplusspock1234watto_cobra
  • Reply 10 of 91
    It's also quite possible they have no good long term plan. They wouldn't be the first business that shoots from the hip thinking not in terms of 2 or 5 years but ..."What can we do to get attention and if we win it'll be a very good quarter." The fact they are tied into the Chinese is interesting as it would be a nice broadside from Chinese interests to hit an 'American' asset without it being a direct attack, like kicking Apple out of China. But if anyone could prove they are acting on behalf of the Chinese interests they would lose their company. It seems like not so much a plan as a frat-boy party stunt. I can't imagine the legal analysis says this is a good idea or that they have any chance of winning it. So if it's not being done from a legal POV - then what POV are they acting on?  - - Actually, now that I think about this situation and my experience in tech and entertainment companies I'd bet this is a decision that was reached not with sound legal analysis or business intelligence but via the various sons of millionaires who most likely hold top positions and simply believe that they are entitled to anything they want. The 'Uber Boys' sort of folks who can't believe that anything can be denied them. 
    edited August 2020 aderutterDogpersonspock1234lolliverwatto_cobra
  • Reply 11 of 91
    docbburk said:
    How would consumers not win? Say Epic wins and they get the fee reduced, the ability for direct payments, or more hopefully, we get full sideloading on iOS. For the first situation we could get cheaper apps, as developers could reduce the price of the apps themselves or the price of In App Purchases, something good for the consumer. For the second we got proof that it would be better for the consumer, as the price of V-Bucks was cheaper with the option for directly purchasing the V-Bucks from Epic rather than through Apple's processor. For the third consumers wouldn't be beholden to the App Store. Stadia and Xcloud would be usable on iOS, Much more open source development could occur on iOS because developers wouldn't have to subscribe to a $100 fee to host their apps on the store. Hell, with sideloading we could get app stores that actually show off more than regurgitate the top apps of each category.
    Are you mad?  You are only looking at Epic, and dreaming that all developers would be 100% on the up and up.  Here’s a big part of the down side: 1) it would allow any company making apps an opportunity to get your payment information without a check to see how secure they keep that info, and without the protection from unauthorized payments that Apple gives you.  2) Side loading apps and all these “app stores you talk about are also opportunities to get malware and viruses on your phone, going around the protections Apple has for us, making it far less secure, like Android with less google vacuuming of personal info.  Add that to your comment and you get a fuller picture.  It looks a lot more like Epic is just trying to push public opinion in their favor hoping for a reduction of the fees. If you want that kind of risk, buy an android phone and quit crying.   
    Exactly. One reason I spend on the App Store and am willing to spend with my daughters games ETC is that I feel protected with my CC info being with Apple. Not with a million different third parties. I'd simply not buy stuff. It's pretty easy to to see that Apple using a trusted and easy pay system is one of the main reasons they so out earn other platforms that are massive in size compared. You break that trust - no more money on apps and digital dollars ETC.
    aderutterBeatsdonjuanPizzakoerierrandominternetpersonDogpersonlolliverjony0watto_cobra
  • Reply 12 of 91
    mjtomlinmjtomlin Posts: 2,490member
    How would consumers not win? Say Epic wins and they get the fee reduced, the ability for direct payments, or more hopefully, we get full sideloading on iOS. For the first situation we could get cheaper apps, as developers could reduce the price of the apps themselves or the price of In App Purchases, something good for the consumer. For the second we got proof that it would be better for the consumer, as the price of V-Bucks was cheaper with the option for directly purchasing the V-Bucks from Epic rather than through Apple's processor. For the third consumers wouldn't be beholden to the App Store. Stadia and Xcloud would be usable on iOS, Much more open source development could occur on iOS because developers wouldn't have to subscribe to a $100 fee to host their apps on the store. Hell, with sideloading we could get app stores that actually show off more than regurgitate the top apps of each category.

    The App Store is widely successful because of the way it is run, not in spite of it. The App Store is extremely consumer friendly because of its ease of use compared to what users had to do before to find, download and install apps on their own. Opening iOS to side loading will not bring the price of apps down - that's a great thought, but history has proven that prices would probably go up, due to the fact that they would probably sell far fewer copies due to lack of exposure on the always present App Store.

    If anything happens, more than likely it will involve services that users can subscribe to... Apple will be forced to allow developers to direct users to their websites where they can then subscribe without going through Apple's payment system. That will be the first step.


    tmayBeatsigorskypscooter63lolliverwatto_cobra
  • Reply 13 of 91
    BeatsBeats Posts: 2,642member
    On August 13, Epic, developer of the wildly popular battle-royale game Fortnite, began baiting Apple and Google into legal battles. The game developer is playing a game, and it is a strategic one with all to play for.

    Playing Fortnight on iOS with a game controller
    Playing Fortnight on iOS with a game controller


    It started when Epic announced that they would be permanently lowering the prices on in-game purchases for Fortnite. Players on console, Mac, and PC, would automatically get the discount on all future purchases.

    Those on mobile platforms -- such as iOS and Android users -- were given two options for payments. Players would be able to purchase through Apple or Google's in-app payment systems, or they would be able to pay Epic directly.

    Epic incentivized players to pay them directly by offering substantial discounts over buying items through the App Store or Google Play's payment systems. Paying through Apple or Google would negate the savings, and players would be charged pre-discount prices.

    Then Epic justified the move by saying that companies like Amazon and Best Buy were allowed to receive direct payments from customers without going through Amazon or Google.

    Of course, this was in direct violation of both Apple and Google's terms of service. While it is true that companies like Best Buy and Amazon do take direct payments, they also offer customers physical goods and services. Physical products are stored, processed, and shipped through their networks.

    Yet, digital goods are different. Digital goods are housed within Apple's well-known, easily accessible App Store. Digital goods are monitored by Apple for suspicious activity to keep Apple's consumer base safe.



    Apple, for example, requires all digital goods to be subjected to a 30% commission fee -- a rule that has been in place for over a decade. The fee covers the cost of bandwidth and the routine safety checks, plus a courtesy fee for allowing the app to be hosted on the App Store.

    The 30% rule is relatively standard for digital services -- Google Play charges the same fee, as does Steam, Epic's primary desktop gaming competitor.

    Unsurprisingly, within eight hours, Apple had kicked Fortnite off of the App Store, and later publicly encouraged Epic to work with them to bring the game back to iOS. Shortly after, Google Play also removed Fortnite, citing that they'd also violated Google's terms of service.

    It was a calculated move on Epic's part. The CEO, Todd Sweeney, has long been critical of these commission fees. In July, he went on record calling Apple's App Store an "absolute monopoly."

    Later, Fortnite tweeted that they would be premiering a new short animation titled "Nineteen Eighty-Fortnite," a less-than-subtle reference to Apple's 1984 Super Bowl commercial (and George Orwell's dystopian, social science fiction novel).

    Fortnite Party Royale will premiere a new short: Nineteen Eighty-Fortnite. Join us at 4PM ET. pic.twitter.com/BWvndK3gDt

    -- Fortnite (@FortniteGame)


    Epic then announced that they had begun the legal process to sue Apple in response to the company removing Fortnite from the App Store, less than one hour after Apple had removed the game.

    The complaint alleged that Apple had become a "behemoth seeking to control markets, block competition and stifle innovation." It claimed that the company's size and reach "far exceeds that of any technology monopolist in history."

    Epic later filed paperwork against Google over alleged anti-competitive practices. Like its fight with Apple, the developer paints a picture of duplicity -- mocking Google's already ridiculed "Don't Be Evil" motto -- in its suit.

    Understanding Epic's motivations are critical. While iOS accounts for a minority of Fortnite players, they account for a tremendous amount of revenue in the App Store.

    In June, Finbold reported that Fortnite was the top earner in the App Store, averaging $2.75 million in daily revenue.

    What happens next

    Epic's lawsuit does not ask for a jury trial, and while only they can know their reasoning, it looks like they want the trial by jury to happen outside the courts. They want public opinion to go against Apple.

    The suit does, though, keep repeating that Apple has "injured" the games company by its actions. Apple's lawyers are surely going to just spread their arms at that one. They'll point out that Epic has profited from the App Store for over two years.

    Apple will doubtlessly say that Epic therefore knew the rules well enough to make money -- and now well enough to make certain that it was removed from the store on schedule.

    Somewhere within Epic there is a game plan or maybe just a Gantt chart which laid out when it would be ready to launch the suit, when the video would be finished, and so when it had to be booted out of the app store.

    You have to assume that the plan continues far beyond this stage, and that Epic has a strategy that it is following. It's an expensive strategy, with this amount of money being lost each day it's off the App Stores, but then all marketing costs money.

    This truly could be a marketing expense, and if so, there will be more spent on the campaign later.

    Apple may play its regular card for getting out of monopoly arguments and point out that Fortnite earns much more from its other platforms. Apple could also make a case that it is the one being injured, and even that it might be in retaliation for trade disputes.

    Chinese firm Tencent owns 40% of Epic, and Tencent is one of the firms affected by the current US Administration's various policies.

    But whether it tries that China defense or not, the way this has played out so far makes the next stage reasonably likely. Apple is going to win this legal case -- it's even likely that Epic will end up having to pay costs.






    Even if that is not what will certainly happen, though, and even if it is not what Epic wants for any reason, the company knows it's likely and is ready for it. It will be ready to pay up if it has to, but it will also be ready to make its next move.

    The question then is not really what that specific next move is, but what the overall aim of the game could be. If Apple is likely to win the legal battle, it is also likely to lose in the court of public appeal.

    In a two-horse argument, you can win support by making people disapprove of your rival. If it ends up with Apple seeming like the bad guy, Epic will automatically be the good one.

    That's the point when Epic will launch its own App Store.



    Keep up with AppleInsider by downloading the AppleInsider app for iOS, and follow us on YouTube, Twitter @appleinsider and Facebook for live, late-breaking coverage. You can also check out our official Instagram account for exclusive photos.
    Its Tim Sweeney dammit. Sweeney Todd is Tim burton's movie starring Johnny depp

    And based on an old musical/Opera. LMAO
    randominternetperson
  • Reply 14 of 91
    Things will be back to normal in a few days. Fortnite will be back in The App Store obeying the rules and their lawsuit will be dropped.

    Apple wins, Epic loses and consumers are still in the exact same position they were before this started.
    mark fearingwatto_cobra
  • Reply 15 of 91
    mjtomlinmjtomlin Posts: 2,490member
    It's also quite possible they have no good long term plan. They wouldn't be the first business that shoots from the hip thinking not in terms of 2 or 5 years but ..."What can we do to get attention and if we win it'll be a very good quarter." The fact they are tied into the Chinese is interesting as it would be a nice broadside from Chinese interests to hit an 'American' asset without it being a direct attack, like kicking Apple out of China. But if anyone could prove they are acting on behalf of the Chinese interests they would lose their company. It seems like not so much a plan as a frat-boy party stunt. I can't imagine the legal analysis says this is a good idea or that they have any chance of winning it. So if it's not being done from a legal POV - then what POV are they acting on?

    Why do people think China would ever "kick out" Apple? Apple is probably one of the largest employers (directly and indirectly) in that country.
    BeatsigorskyDogpersonwatto_cobra
  • Reply 16 of 91
    tmay said:
    Discovery won't be kind to Epic Games, should this come to trial. 

    https://gamingmonk.com/post/is-epic-games-founder-tim-sweeney-an-anti-consumer-hypocrite

    Just another hypercompetitive businessman, just another Spotify.

    Apple will ultimately, I suspect, be able to continue its current policy, but at a lower rate, and that will have to happen via legislation, which is extremely difficult to actually create. 

    After reading this - I stand 100% by my earlier post. This is simply a man-child who feels he can't be denied anything and that HIS economic interests are in everyones economic interests. A common mistake these days. Frat-boy-Uber-Boys-FBoys running things with lots of money they believe they 'created' by their 'hard work'. 
    omar moralestmayBeatsdonjuanDogpersonspock1234lolliverjony0watto_cobra
  • Reply 17 of 91

    mjtomlin said:
    It's also quite possible they have no good long term plan. They wouldn't be the first business that shoots from the hip thinking not in terms of 2 or 5 years but ..."What can we do to get attention and if we win it'll be a very good quarter." The fact they are tied into the Chinese is interesting as it would be a nice broadside from Chinese interests to hit an 'American' asset without it being a direct attack, like kicking Apple out of China. But if anyone could prove they are acting on behalf of the Chinese interests they would lose their company. It seems like not so much a plan as a frat-boy party stunt. I can't imagine the legal analysis says this is a good idea or that they have any chance of winning it. So if it's not being done from a legal POV - then what POV are they acting on?

    Why do people think China would ever "kick out" Apple? Apple is probably one of the largest employers (directly and indirectly) in that country.
    I don't think they would, but they could do all kinds of things that make life more difficult for them (Apple). I was using it as a generalization: that China could encourage this type of action vs. something more abrupt like using laws to curtail Apple sales and growth. There is no doubt China would much rather see a domestic company selling most of the phones in China. But Apple pumps plenty of money into the Chinese economy too.
    edited August 2020 Beatswatto_cobra
  • Reply 18 of 91

    Things will be back to normal in a few days. Fortnite will be back in The App Store obeying the rules and their lawsuit will be dropped.

    Apple wins, Epic loses and consumers are still in the exact same position they were before this started.
    So a tantrum by the Epic Frat-Boys...I think so too.
    Beatswatto_cobra
  • Reply 19 of 91
    If anything happens, more than likely it will involve services that users can subscribe to... Apple will be forced to allow developers to direct users to their websites where they can then subscribe without going through Apple's payment system. That will be the first step.


    That wouldn't just apply to Apple. It would also apply to Amazon, Etsy, EBay, and Walmart. All of those companies have rules that forbid sellers from using links to redirect customers to an external web site.
    Beatsigorskymike1pscooter63spock1234retrogustoapplguylolliverwatto_cobra
  • Reply 20 of 91
    longfanglongfang Posts: 258member
    I say this as an indirect investor in Epic. Tim Sweeney can DIAF.
    Beatssvanstromwatto_cobra
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