Epic Games mega-snuck the biggest of all shadow bombs onto the App Store and Play Store — a way around giving Apple and Google a 30% cut of all the Vbucks. As a result, Fortnite, their uber-popular Battle Royaler, got shadow banned. Still on phones and download histories, but kicked out of the stores. Epic sued, saying no company — sorry, no phone company — had a right to 30% of their tasty, tasty emote and skin sale billions.
Epic called Apple a controlling, conniving, anti-competitive monopolist, and Google, open-in-name only, while fear-mongering and outright bullying to stay effectively every bit as closed.
Apple and Google retorted that Epic was a grown apps adult, had agreed to the deal, made billions as a result, and was now throwing a temper tantrum to try and claw back just a few billion more.
And, now, impossible as it may seem, things just got weirder.
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Last Monday, literally just after my previous video on all this went live, Epic claimed that, in 14 days — 2 weeks — Apple would terminate their developer account. Meaning, they would be cut off from both iOS and macOS developer tools.
And the Apple and tech web lost their collective minds.
Because, Epic isn’t just a game company that makes Fortnite. They’re also a game engine company that licenses Unreal 4 to other companies. Those other companies use Unreal 4 to make games for a variety of platforms, but also to do a wide range of other things. For example, ILM — Industrial Light & Magic — famously, famously uses it to create the virtual sets for the hit Disney+ Star Wars show, The Mandalorian.
Now, most of that work isn’t done on the Mac and isn’t done for iOS, but some of it is, and if Epic loses their developer account, they lose their ability to sign new and updated versions of the Unreal Engine for Mac. Which means everyone using it loses their ability to develop and update their apps.
Sure, Epic could still ship new and updated versions of Unreal that are unsigned, which means Mac developers would have to disable Gate Keeper to install them, but it would make an already annoyingly complex process of signing chains even more annoying. Potentially unworkably so. Which, yes, is pretty much why Epic was complaining about Google’s side-loading being a sham in part one of all this.
And that means Epic isn’t just risking their own game and their own business in going head-to-head and face-to-in-face against Apple and Google — they’re risking the games and businesses of everyone licensing the Unreal Engine from them.
This led some people to get really just extra angry at Apple for making that kind of threat, and others to get really extra angry at Epic for putting these other companies at risk… you know, by not spinning off Unreal and getting it on a legally separate developer account before first making this whole Battle Royale station fully operational.
Epic filed for an immediate TRO — temporary restraining order — saying Apple’s actions threatened millions of innocent customers worldwide, basically everyone who played any Unreal-based game. But also, yeah, that Epic was losing a buttload of money from in-app purchases while Fortnite was kept sitting in the penalty box. And that the court should not just prevent Apple from terminating Epic’s developer account, but force Apple to put Fortnite back on the App Store, even though it would still be in violation of their agreements with Apple, so they could keep on updating and earning while this all gets hashed out.
And.. Just so much to unpack there…
First, what Epic characterizes as a threat is more like a promise. According to the App Store licensing agreement that Epic agreed too, if they violated those policies by sneaking something into their app — just exactly like the Fortnite Mega Drop — their agreement would be terminated effective immediately upon receipt of written notification from Apple.
Now, you can totally believe that’s a complete jackass of a license agreement, but it’s the one Epic agreed to. Which means they knew about it, and still intentionally put every developer who licenses the Unreal Engine at risk by violating it. That’s all on Epic.
Apple, of course, could have chosen not to send a written notification of termination. Even if it created an untenable precedent for them, basically inviting any and everyone else to launch the same workaround, they still chose to send it out immediately.
By contrast, Google seems to have the same stipulations in the Play Store agreement but, at least so far there’s no indication they’ve chosen to enforce them. Maybe they’re negotiating behind the scenes, maybe they’ve just chosen to wait and see and watch Apple’s world burn.
Now, Apple had every legal right to terminate the agreement with Epic immediately — that’s the language — which means Unreal Engine would go bye-bye immediately, but they seem to have chosen to give Epic two weeks.
So that means, despite Epic’s filings, they’re not actually in any imminent, much less irreparable harm. Epic has plenty of time to update the Fortnite app on the App Store — and the Play Store for that matter — removing the Mega Drop, and getting right back onto the stores. They don’t even have to stop their legal action.
They can have their Vbucks money and lawsuits too.
Apple said roughly as much in a statement later the same day. That they very much wanted to keep Epic as part of the developer program and on the App Store. That Epic had created this problem for themselves but could also fix it for themselves by submitting that type of update, one that reverts Fortnight into compliance. Which Apple said Epic had agreed to and which apply to all developers.
Also, that Apple wouldn’t make an exception for Epic because they don’t think it’s right to put Epic’s business interests ahead of the guidelines that protect Apple’s customers.
A lot to unpack there as well.
You could argue Apple and Google created this war by running their stores the way they do. But, I think it’s entirely fair to say Epic started this particular battle with their Mega Drop. That was clearly planned to provoke Apple and Google into responding, and Epic had everything from lawsuits to videos to other press stunts ready and waiting for just the moment they did.
Where Apple’s stance remains problematic is the constant insistence that their policies apply equally to all developers. I covered this in excruciating detail in last week’s video, link in the description, but to sum up — it’s fairer to say Apple’s policies — and Google’s — apply equally to all game developers. Developers of non-game apps operate under varying degrees of very different guidelines. Something that it’s just wicked obvious game developers don’t like one bit.
Also, the idea that Apple is doing this to protect their customers. Big picture, they probably believe that as much as Epic believes they’re standing up for customers as well.
But debates over privacy and security vs. choice and competitiveness get real abstract real fast, bordering on projection and rationalization, when it comes to who gets what control and share of skin and emote money.
Apple didn’t just put out a press statement. Apple also filed a response to Epic’s request for a restraining order.
It went a little something like this: Epic wanted the benefits of the App Store without having to pay for them any more, and so breached their contracts with Apple, trying to use Fortnite players and Apple users as leverage. And it’s all shades of shady that Epic is asking for quote-unquote emergency relief for a situation entirely of their own making — that Epic in fact created the harm to game players and developers that it now wants the court to remedy. But, all of this would just go away if Epic retracted their mega drop. Without the court or lawyers having to spend a minute or waste a dime. And that Epic could keep on suing them anyway.
Basically, in Apple’s words: Epic wants the Court to allow it to free ride on Apple’s innovation, intellectual property and user trust.
Which, just, wow.
Now, opinions on the benefits of the App Store vary. Some believe it has no value and that Apple shouldn’t be allowed to charge a penny more than the $99 a year they collect for the developer program, plus whatever single digit percentage basic transaction fees work out to be.
Others, that the App Store provides some benefit when it comes to the development tools and frameworks Apple provides, the international transactions and taxes they handle, the hosting, delivery, including app-thinning and bitcode that happens server-side, exposure, discovery, and promotion on the store front, and the trust they’ve built up from iOS users that makes them so willing to spend so much on the App Store. Just that it’s not worth 30%. Maybe 15% or thereabouts.
Still others, that the App Store does in fact provide 30% worth of value and they have no problem with it, because keeping 70% of what they make on the App Store is way more than 100% of the much less they make off it. And that people who keep wanting the App Store to be more like the Play Store should maybe consider why the App Store makes so much more money than the Play Store, even with far fewer downloads.
And some canny indies feel that the App Store would be worth 30% to them if Apple actually delivered on everything they said they would, but review remains capricious and often callous, frameworks like the ones for subscriptions, unacceptably cumbersome and convoluted, and that, basically, if Apple wants their full share they should devote a hell of a lot more time, energy, and resources to providing full service.
There are also developers who find Apple language in these cases super offensive — that Apple basically gives them a love letter in WWDC form every year, but any time there’s a disagreement, act as though developers owe them everything for the frameworks they provide, even while denying them non-Apple frameworks as alternatives, and should basically just shut up and be grateful for their existence. In this case specifically, how Epic benefits from something like Apple’s Metal, even though they’re not provided anything else to use, like the cross-platform Vulcan.
Other developers, though, don’t seem to mind it one bit, feeling Apple’s versions are genuinely easier and better.
Now, the part about Epic being able to fix all this with a single App Store rollback is also true, like I mentioned before. It’s the part where Apple says Epic could do all that while just keeping on with the lawsuit is super interesting. Like the quiet part out loud. More on that in a hot take minute.
Apple went on to say that by Epic’s logic, Microsoft, Sony and Nintendo, among others, would also be monopolies, and all this anti-trust rhetoric is just an orchestrated campaign, a thin veneer, to get the App Store benefits without having to pay for them.
And this is actually… kinda true. Because, the fact that Xbox, PlayStation, and Switch exist means there are more distribution opportunities and markets for game developers than for non-game developers. And Microsoft, Sony, and Nintendo all take the same 30% cut as Apple and Google.
Epic has said previously they don’t mind paying 30% to Xbox, PlayStation, and Switch, because the business models and opportunities are different — Microsoft, Sony, and Nintendo often sell hardware at a loss and provide big game developers better partner plays and marketing.
But also, Sony owns 1.4% of Epic, and Nintendo and Microsoft both license the Unreal Engine making their relationships more intertwined and complex… as we’ll soon see…
Anyway, the usual remedy for that is choosing not to put your games on the platforms you don’t think are worth it and investing in the ones you do. And if Apple and Google suddenly find themselves unable to attract the game studios their users are demanding, they’d be forced to concede some points or otherwise change the rules to get those big studios on board.
That’s the big business version of voting with their wallets, and what companies like Netflix and Amazon have done to successfully negotiate better terms and wholesale changes to the guidelines for their apps and categories.
But the high-order bit here is that Epic doesn’t really want changes to the App or Play Store. They want to become the store.
Included in the filings were a couple of remarkable works of… lettering… by Epic CEO Tim Sweeney sent to Tim Cook, Phil Schiller, Craig Federighi, and Matt Fisher, Apple’s CEO, head of App Store, SVP of software, and VP of App Store respectively.
In the first letter, dated June 30 of this year, Sweeney said Epic wanted to offer customers alternate payment options on the App Store and a competing Epic Game Store, also on the App Store, that got to use the iOS frameworks, and all the App Store mechanisms for a seamless installation and update experience.
Epic wanted them for themselves, but also hoped Apple would make them available to other developers as well.
And that it’d be great if Apple gave Epic a side-letter or altered their contracts to allow Epic to do all this.
And, yeah, the inclusion of “hoped” and “side-letter” sure make it seem like Epic would have taken a deal just for them, other developers be damned, if they could have gotten one.
Sweeney gave Apple 2 weeks to agree to the terms in principle, and if Apple didn’t, Epic would take it to mean Apple didn’t care about letting Android customers choose their store or payment options.
Yes, Android customers, which was either a simple error on Sweeney’s part, or an indication the same type of letter was sent to Google and they just find/replaced it all sloppy like.
There’s no indication Sweeney sent the same type of letters to Microsoft, Sony, or Nintendo, of course, even though all sophistry and subjective opinions aside, an Epic Game Store makes as much sense on the Xbox, PlayStation, and Switch as it does on the iPhone or Android Phones.
It could be Epic really feels the business models are different, is giving them a pass due to their deeper financial mingling, or is just warming up with what they feel is an easier-to-win battle with Apple before turning on Microsoft, Sony, and Nintendo next. That’d certainly be a smart strategy.
Now, Epic isn’t asking for side-loading because, through their own statements and court filings, they’ve said Android’s implementation of side-loading makes it so difficult and scary, and Play Protect effectively blocks it, to the point that it may was well not even exist.
My guess is though, Epic realized mainstream customers just don’t use it. Nerds, yes, absolutely, and nerds chronically mistake themselves for the market, but Epic doesn’t They want the really big market, the real mainstream market.
I’m also guessing Epic doesn’t even really care about the alternate payments in their first big ask. Because the second big ask is an alternate store. And once they have the store, they control the payments. There’s no need for any alternates. So that reads more like a fallback than an endgame.
The reason Epic wants the Epic Game Store on the App Store and Google Play Store is because, again according to Epic, side-loading isn’t a viable option.
Also, that Google bullied OnePlus and maybe LG into reneging on deals to pre-load the Epic Launcher onto their phones.
Fortnite did go into the Samsung Game Store, and was exclusive to Samsung for the Galaxy Note 9 launch — exclusives being something Epic is happy to use, and some would say abuse, to grab market share from Steam on the PC.
But, my guess is, as popular as Samsung devices are, their store drives a fraction of the downloads of the Google Play Store. And Epic knows that, if even Samsung pre-installing an alternate store can’t drive enough revenue, getting people to side-load an Epic Game Store wouldn’t do much better. It would do much, much worse.
And that’s why Epic wants their Game Store on the App Store and Play Store — so it’s in front of every App Store and Game Store user. So it gets to take advantage of all the discovery and trust that they’re also been arguing isn’t worth as much as Apple and Google want to charge for it. To use all the mechanics Apple and Google have engineered and provided to maintain a level of user experience they don’t believe they can deliver on their own, while effectively cutting Apple and Google out of any piece of skins and emotes action.
Because, once the Epic Game Store is on the App and Play Store, you can bet Fortnite won’t be. It’ll only be on the Epic Game Store. At least if they can grab enough downloads that way. And if not, they’ll have their own transactions to fall back on. Less shot, chaser. More Jab, uppercut.
And to that, some people will say yeah, hell yeah, stick it to the platform. Apple and Google have fed off their initial innovation for a decade. It’s time for a new deal. Free as in Fortnite.
And others would say, you don’t like the rules of the house, you tried to move out but found living on your own too hard, so now you want to not only stay at the house for free, but charge a cover for your parties and stick the hosts with the bill. Get a job.
Oh, Sweeney’s other letter?
2am right before the Mega Drop, telling Apple that Epic will no longer adhere to the App Store payment restrictions, and would be launching their own direct payment system in Fortnite, passing 20% of the 30% savings on to customers, minus the associated transaction costs, of course.
Ok, he didn’t break out the numbers like that. But, in Epic’s defense, they had a lot of marketing still to do.
The Bad Apples
That Epic is suing both Apple and Google but targeting Apple so much more than Google is also interesting. So much so that I can’t help but wonder if Epic suing Google at all wasn’t a mistake in strategy. Maybe they thought they had to sue both to ensure the distinction they were trying to make about phones being general purpose computers and game consoles being… consoles.
Or maybe this is Epic’s way of… having it both ways. For example, there’s no Google Don’t Be Evil video the way there’s an Apple Don’t Be 1984 video.
There’s also seemingly no TRO or request for emergency injunctive relief against Google the way there is against Apple. Even though there’s no indication Google has notified Epic that they’ll be revoking their developer license. Even though there’s also no direct analog to macOS developer tools for the Epic Unreal Engine on Google’s platform. And yeah, it’s just “even thoughs” all the way down.
Earlier this week, Epic also announced a hashtag FreeFortnite cup. They say it’s the final days of the entire Fortnite community’s ability to play together. Since Apple has blocked Fortnite from the App Store and iOS players will be left behind when Chapter 2, Season 4 launches on August 27.
If you don’t want to be left behind, Epic says, you can jump on PlayStation 4, Xbox One, Nintendo Switch, PC, Mac, GeForce Now, and through both the Epic Games App at epicgames.com and the Samsung Galaxy Store. And join the fight against @AppStore on social with #FreeFortnite.
All of your friends. Awesome prizes. And… wait for it… one bad apple.
So, again, nothing similar about the PlayStore, which Epic’s lawsuits say they very much want on, and argue the side-loading options are so egregiously not good enough.
Just #FreeFortnite on the App Store.
Just right now as I film this, Epic clapped back at Apple’s clap back, with more court filings. And, plot twist, with the support of Microsoft.
This time, they focused on the Unreal Engine specifically, with Epic saying because the engine was on the line as well, Apple’s actions were unnecessarily punitive, affecting developers who have built on Epic’s engine. Or, as Epic phrases it, the breadth of Apple’s retaliation is itself an unlawful effort to maintain its monopoly and chill any action by others who might dare oppose Apple.
Same as before, some would agree with his, and others would argue that Epic is the one putting developers at risk by putting the Unreal Engine at risk.
It’s also quite acceptable to believe both Apple and Google are being irresponsible and putting these developers, who have nothing to do with this case, Apple’s alleged monopoly or Epic’s righteous or wrong-headed violations, and maybe they should both sit down and figure out a way to separate Fortnite from Unreal so they can separate their squabble from other people’s consequences.
Microsoft, for their part, says Apple denying Epic access to development tools prevents them from supporting Unreal on iOS or the Mac, and places Unreal Engine and those game creators that have built, are building, and may build games on it at a substantial disadvantage.
Game developers like Microsoft, which uses it for Forza.
Now, it’s a big deal that Microsoft is giving Unreal their support, regardless of whether or not Microsoft depends on them. But it’s also telling that Microsoft filed only in support of Unreal and not Fortnite and the rest of Epic’s case against Apple.
Because that particular can of hurt might just fall on Microsoft’s Xbox store next.
This story is obviously changing, mutating, and escalating quickly. There may even be a ruling on the TRO by the time you watch this, and Epic may have even decided whether they’ll stick to their protest or update Fortnite and profit-take while continuing to sue another day. So, seriously, hit the subscribe button and bell so you don’t miss the next update.
Either way, U.S. law certainly doesn’t seem to be on Epic’s side in all this. Given how many viable game markets there are, all at 30%, it would be very hard to make any of the monopoly charges stick. And either way, courts have been loathe to impose any “duty to deal” on companies, that is to say, force one company to work with another, even competitors, and they’re even murky for monopolies for a variety of reasons.
Likewise, with Qualcomm, we just saw the courts effectively carve out hyper-competitive from anti-competitive. In other words, businesses are supposed to be extremely competitive. Especially with… their competition.
Which is probably why Epic is spending so much time and effort appealing to the court of public opinion in the form of in-game advertising — or propaganda, depending on how you view them — but also to the court of U.S. and E.U regulators.
See, existing laws are one thing. But both the U.S. and the E.U. are looking into big tech companies, how they deal with partners like developers and competitors, especially smaller ones, and what’s better for consumer pricing and opening markets respectively.
And if anything, legislators and regulators have proven themselves to be it’s resounding illiterate when it comes to technology.
You may know them from previous actions like handing an 83% share of eBooks to Amazon and web browser dominance to Chrome.
Basically, they operate with hammers and the remedies they propose could range from being truly beneficial to consumers, detrimental to big tech companies, or even odds, both.
Because, if or when the U.S. and or the E.U. force Apple and Google’s app markets open, Epic wants to be there with a Game Store to take advantage of it. And if they can help kick the doors down, so much the better.
Some people say they’re all for this. That it will force Apple and Google to compete for usage and payments on the merits, on trust and experience instead of lock-in. That it provide more opportunity and options for more apps and people. That, ultimately, it’ll be better for developers and consumers.
Others say they hate the idea. That it will create fragmentation and confusion, forcing consumers to figure out which store has which app, create multiple accounts across multiple payment systems, and open them up to greater risk of malware and fraud. That, ultimately, it’ll be worse for developers and consumers.
And a lot of this comes down to whether you think Apple’s App Store has been so successful because of or in spite of the level of control Apple exerts over it. Whether they’ve simply been given or have earned the customer trust needed to drive so much money through the App Store economy, how much a trillion dollar company is entitled to for that economy, and how much they should be required to give back simply because of their success, even to billion dollar companies like Epic.
Which is a really important, nuance argument to have. Way more nuanced than something like, I dunno, Epic should just go make the Fortnite phone, 240Hz with a three day battery, and Apple should make AppNite Battle Royale and sue to get their store on Epic’s phone. Which is no joke popping on Twitter.
But I do think Apple and Google would be wise to get ahead of regulators and law-makers on this, pick the concessions that would win them the most while hurting them the least. Whether that’s a proper Gatekeeper for iOS or reader app equivalent for games or… That’s a whole other video, and I’m working on it.