Apple vs. Epic (Fortnite): Battle of Heavyweights Extends Beyond Gaming
Two weeks ago, Epic Games (Epic), the maker of the uber-popular, battle royale, video game Fortnite, intentionally implemented a direct payment system that violated Apple’s terms of service. Apple requires all applications within the App Store platform to be subject to a 30% fee for any in-app purchases as well as prohibiting apps from redirecting to an outside site to enable the user to make a purchase. Epic Games participated in this outlawed behavior and Apple subsequently removed Fortnite from the App Store, leading to Epic filing an anti-trust lawsuit. Apple has shown to not be consistent with this heavy-handedness, allowing Netflix, Spotify, and others, the ability to bypass this requirement.
While the initial shot was fired at Fortnite, the impact of this lawsuit will reverberate across the entire tech (app-based) industry. Additionally, Epic owns the Unreal Engine, a platform that a significant amount of developers depend on to drive their apps. With Apple also removing Epic’s development account, Epic will lose access to critical development tools, crippling its ability to develop the program for Mac users.
Beyond gaming, this lawsuit has the opportunity to overturn Apple’s stranglehold on developers and small businesses. Many start-ups have found the 30% App Store tax to be a deterrent to business success, yet a risk they were required to take given there was no other option to publish their products. Large media is now jumping on this opportunity to press Apple, with the likes of the New York Times demanding that the 30% be reduced to 15%.
Two battles are being waged: the legal battle and arguably, more importantly, the battle of public opinion.
We would encourage you to read up on this subject (great article from a developer perspective) and Forbes will continue to provide updates as this case develops.
JJ Lane – Vice President & Head of Digital Gaming
For more information on M+A transactions and industry insights, read our blogs.