Updated: Oct 9
In this episode, we are explaining the battle between Fortnite (Epicgames) and Apple. The widely popular game Fortnite has been removed from both the Apple and Google app stores because they tried to maneuver around the mandatory 30% platform fee and keep the profits from their in-app purchases. Epic Games is suing both Apple and Google claiming they have a monopoly over app purchases because they are the only way to install games on their devices. A court ruling recently allowed Apple to keep the game off its app store while litigation continues.
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The information in this episode comes from CBS News, Axios, Gamesrader, Gamespot, CNET, Business Insider, and TechRepublic.
What’s going with Fortnite and the Apple App store?
Let’s talk about how the app stores work on Google and Apple devices. Developers create an app, which could be a game, software, whatever, and Apple or Google will charge the developers roughly 30% of all in-app purchases to house the app in the store and to easily install it on your phone or device. So every time you make a purchase for a game upgrade or unlock a paid portion of an app, 30% goes to whatever app store you are using.
So how did Epic, which is the creator of Fortnite, try to do that got them banned on the Apple iOS platform?
They tried to bypass that charge by offering discounts in the app that would go directly to Epic, not Apple. Fortnite is a free-to-play game, however, you can pay for upgrades or new characters, weapons, etc. Epic would charge $7.99, a discounted price if they chose to pay directly to Epic, or they had a choice to pay $9.99 through the Apple App Store. According to CNET, “Fornite generated $4.2 Billion between 2018 and 2019 alone.”
I can see why Apple or Google would want to get 30% of that revenue. That’s roughly $1.3 they would get from the commission of that app being on their platform. It makes sense that Google and Apple would remove the game from their app store because they want their piece of the pie.
What was Apple’s official response to why they removed Fornite from the app store?
According to an article by Axios, Apple’s defense is, “Running the app store costs money, it has the right to establish ground rules for its platform and those rules keep users safe from malware, porn, and spam.” Which makes sense for them. It’s their app store, they set the rules and the prices for what is seen in the store.
Why Epic Games, creator of Fortnite, is suing Google and Apple?
Epic Games is suing both companies claiming that both app stores are a monopoly and don’t allow a third-party app store on their devices. According to CNET, here is the language from the filing from Epic Games, (quote) “To reach iOS users, Apple forces developers to agree to Apple's unlawful terms contained in its Developer Agreement and to comply with Apple's App Store Review Guidelines, including the requirement iOS developers distribute their apps through the App Store. These contractual provisions unlawfully foreclose the iOS App Distribution Market to competitors and maintain Apple's monopoly."
Epic is claiming that since you can only install games or apps onto Apple devices through the App store, there is no way for competitors to fairly compete on those platforms. Thus creating a monopoly in the meantime. This may seem unfair, however, according to an article by CBS News, Eleanor Fox a professor at New York University states, (quote) “The problem is that antitrust laws as they are formulated now favor market-dominant firms, and do little to regulate prices.” So it doesn’t seem that Epic will prevail in this lawsuit. But you never know.
Epic definitely has an uphill battle ahead of them. But users of the game are getting creative and creating a new market for used devices that have the game already installed on it. According to an article on Gamesrader, “People are willing to pay thousands of dollars for an iPhone with Fortnite installed, or at least that's what some eBay sellers are hoping.”
That’s insane! But good for those people who can profit from this lawsuit. Both lawsuits continue, and a recent ruling on August 24th was in favor of Apple removing the app from its store. The game is still not available to download on Apple nor Google store. We should hear another update by the end of September.
This could be super interesting! We’ll catch you up when there are more developments.