Epic vs. Apple: An Explainer

What exactly is happening between the two giant corporations and what could be the result?

This week, Fortnite developer Epic Games went to court against tech giant Apple over what Epic alleges are unfair business practices. If you are confused about what lead to this point, we’re here to offer a handy-dandy explainer that will get updated as the trial proceeds.

How It Started

  • Fortnite, which is on Apple’s iOS mobile devices, was bound by Apple’s policies to use the company’s preapproved payment methods for transactions in the game. Apple gets a cut from the transactions made on their devices, which Epic signed off on in the developer agreement. Google takes a similar cut on Android devices and is generally an industry-wide standard with platforms owned by Nintendo, Sony, and Microsoft.
  • In August 2020, Epic added a new payment method to Fortnite on Android and iOS that circumvents the cuts Google and Apple receive respectively. Epic advertised this new method by saying that they’re passing the savings on to the consumer by offering them a lower price for V-Bucks, the virtual currency used for the game.
  • As a response, both storekeepers removed Fortnite, with Apple removing Epic’s access to iOS development entirely. As soon as Apple and Google pulled the game from their stores, Epic filed two pre-prepared lawsuits against both companies. Epic also launched a Fortnite event satirizing Apple’s famous 1984 commercial about breaking out from an oppressive regime, this time casting Apple as the villain and Epic as the upstart revolutionary.
  • Epic Games is worth $29 billion dollars, by the way.
  • The Fortnite creator started #FreeFortnite on social media to encourage its audience of mostly younger players to take the fight to Apple and Google.
  • Though Fortnite is still accessible on Android devices, just through sideloading rather than on Google’s store.
  • A pre-trial judge told Apple that they were not able to fully take away Epic’s dev tools, meaning they can still update Fortnite on iOS for players that previously had downloaded it. Epic’s request for an injunction to stop Apple from removing the game from the store until the trial, however, was rejected.

How It’s Going

  • Epic is looking to topple the industry standard 30% cut and, in a broader sense, is continuing Tim Sweeney’s years-long war against closed platforms. In 2016, Sweeney aimed his formidable weapons at Microsoft and accused them of trying to monopolize PC gaming, which had always been relatively open compared to consoles.
  • Apple desperately needs to fight the lawsuit off so it does not set a precedent that the industry-wide 30% standard is unfair or can be circumvented. While Apple hasn’t presented an exact number, estimates suggest that Apple makes close to a billion dollars off the relatively passive cut, which would make a big hit to their revenue should it ever be subverted.
  • In the first day of trial, Epic CEO Tim Sweeney took the stand to talk about baseline knowledge of consoles, streaming services, and Fortnite‘s role in those platforms.
  • Among other things, it was discovered that Sony had a royalty plan in place for developers to pay the company if crossplay games were not sufficiently even in terms of playtime and money spent on the game.
  • At one point, Epic’s lawyer presented Tim Sweeney with a Switch and two joycons as a means to identify the Switch as different from other devices like phones or personal computers. Sweeney was unable to assemble the system and admitted he’s “not a Switch player.”
  • During the second day, Aashish Patel, director of product management at Nvidia, took the stand as Epic’s witness. He was there to testify about how the company’s GeForce Now app had to make an end-run around Apple’s app rules after it was rejected by the Cupertino company.
  • On the third day of trial, Apple’s lawyers grilled Microsoft Vice President of Xbox Business Development Lori Wright, who was brought in as an expert witness by Epic.
  • Wright testified that Microsoft has never made a profit per console on the Xbox, which was stated to draw contrast to the profit-making iOS devices that Apple produced, trying to justify why the Xbox marketplace charging 30% off the top is fine for them but not for Apple.
  • Apple’s lawyers had Wright point out that the Xbox can be used for media apps, which makes it similar to a multipurpose device like the iPhone. On redirect, Epic’s lawyers got Wright to say that people primarily still buy the system for the gaming aspects, though certainly not for lack of trying on Microsoft’s part.
  • Wright largely testified about xCloud and the hurdles Microsoft had to jump through in order to get the cloud-based streaming service on to iOS, eventually having to just stream it through a mobile browser due to Apple’s policies, which Wright declared as “not ideal.”
  • Wright did acknowledge, at Apple’s lawyers’ behest, that Apple did help Microsoft get the mobile browser workaround running.
  • Entered into evidence was an internal Microsoft document that outlined what the Windows-maker thought was going to be their software competition that year. According to their projections, Breath of the Wild 2Bayonetta 3, and Metroid Prime 4 were possible big titles to launch against the Xbox Series X. None of those titles have been dated at all. Bravely Default 2 and No More Heroes 3 were also on the list, but both those games were scheduled for 2020 and were pushed into 2021.
  • The list also included what they thought the PlayStation 5 would launch with, but that section is actually redacted, indicating a possibility that Microsoft knew of a launch title that was aiming for the PS5 launch and did not make it.
  • The third day of the trial was relatively uneventful, as the core issue of the day was Epic’s own technology and how Fortnite exists on it.
  • We also got inside into Apple’s app review, where it was described as a human process that was prone to error, but seemingly very few rejections are ever overturned or appeals granted.

We’ll continue updating this page with news and conclusions as they proceed in this case.