Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

Digital Payment 17

In what can be dubbed the heavyweight battle of the year between two huge billion-dollar companies, the tussle has only just begun.

Epic Games, developer of the game “Fortnite”, recently breached the App Store review guidelines by introducing a direct payment option in the app for iPhone and iPad. This allows players to purchase in-app ‘V-bucks’ at a 20% discounted price.

Critically, the direct payment option is also added to the Fortnite app on Android, in violation of Google’s Play Store rules. Apple wielded the ban hammer in no time, blocking updates and any new launches by Epic on the App Store. Things soon went legal, as Epic filed a case against App Store stating it violates antitrust laws. Epic Games reports Apple’s and Google’s 30 per cent cut on in-app purchases as “exorbitant.” Epic also points out that apps providing real-life goods and services like Uber, DoorDash, and StubHub are not compelled to use the App Store’s purchase mechanism.

As the case plays out in court, Apple has been accused of violating competition rules and working as a monopoly. The European Union is also investigating Apple’s App Store’s anti-competitive actions. In Apple’s countersuit filing, they have stated that “Epic has benefited from Apple’s promotion and developer tools, earning more than $600m (£462m) through the App Store.”

While the case is to be heard in September, Epic has not declared the scale of damages but is estimated to lose crores of money. Epic has launched a #Freefortnite campaign under which they released a video titled “1980” taking a direct dig on Apple. In recent times, Microsoft has come forward in support of Epic. It has filed a declaration in which Xbox gaming executive Kevin Gammill writes that “Apple’s discontinuation of Epic’s ability to develop and support Unreal Engine for iOS or macOS will harm game creators and gamers.” Epic has also declared that the new season of Fortnite shall not be available on App Store due to the current case in action.

Apple, being a multi-billion-dollar company, has been facing a major backlash for maximizing their profit and not being feasible for the creators. Since inception, Apple’s App Store has grown to shape the nature of developer-publisher relationships. Whilst Epic stands strong to its ground and is trying to gain maximum support from its players to #Freefortnite, only time will reveal what happens next.

What’s the big deal?

The outcome of this case, holds the power to change the platform of relationships between creators and publishers in a multibillion-dollar industry. There are major changes coming to the state of gaming as we know it — and at the very least it will raise a public debate that will permanently affect the industry.

Apple may have an estimated market cap of nearly $2 trillion, which dwarves Epic Games’ trifling $17 billion. But make no mistake about it, $17 billion is a lot of loose change, and enough for Apple to pay close attention to what Epic does, which explains why Apple has gone thermo-nuclear as it looks to protect its rights.

It’s about more than money

It’s about control. Control of the market, and control of your wallet. Right now, the App Store controls that gateway to your wallet, and it’s a very lucrative market that is no child’s play. It was worth about $1.8 billion in 2019 alone, and that value is only bound to soar northward as more gamers enter Fortnite’s ecosystem. There are approx. 350 million registered users worldwide, not to mention merchandise in brick and mortar and online stores, so there’s no real need for an advertising push in the App Store.

There are only a handful of other games out there with Fortnite’s power, but companies like Apple are going to run into Epic worries an increasing amount as gaming’s popularity grows. The war between Epic Games and Apple is only the beginning, and we’re all caught in the crossfire.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

1 Comment

    • Mallika -

    • September 22, 2020 at 17:21 pm

    Apple’s need to control and be a monopoly has been evident since the time they deflected from the common narrative of not only creating the iOS system but also deflecting from the usual usb chargers for phones. At first glance it may have be deemed that they were trying to be unique but no, they would and still do charge outrageous prices for their ‘apple only’ accessories.
    Great article tho.

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