Apple Retaliates Against Epic

Posted on August 17, 2020 by Paul Thurrott in Apple, Dev, iOS, Mac and macOS, Mobile, Mobile gaming with 90 Comments

Epic revealed today that Apple is terminating its developer accounts and cutting off the firm from its iOS and Mac developer tools. So Epic has filed a second lawsuit asking the U.S. District Court of California to stop this retaliation.

“Apple removed Fortnite from the App Store and has informed Epic that on Friday, August 28 Apple will terminate all our developer accounts and cut Epic off from iOS and Mac development tools,” Epic tweeted today. “We are asking the court to stop this retaliation.”

In the new lawsuit, Epic explains that it wishes the court to prevent Apple “restricting, suspending, or terminating any Epic entity from Apple’s Developer Program, on the basis that Epic enabled in-app payment processing in Fortnite through means other than [Apple’s in-app purchase program] or on the basis of the steps Epic took to do so.” The firm says that this retaliation will cause it irreparable harm and that its first lawsuit against Apple is likely to succeed because Apple’s business practices violate the Sherman Act, a cornerstone of U.S. antitrust law.

“The consequences from Apple’s actions are immediate and grave,” the new lawsuit claims. “Apple’s actions to block Epic from accessing the suite of tools all developers use to make software compatible with Apple products is a direct attack on the ongoing viability of the Unreal Engine. It would make it impossible for Epic to continue developing the engine for use on iOS and macOS devices. Third-party developers who rely on the Unreal Engine to power their software on Apple devices will not choose to use the Unreal Engine if it is incompatible with Apple OSs.”

Between its two lawsuits, Epic makes an excellent, well-researched, and well-documented legal attack on Apple’s business practices. I advise anyone who backs Apple in this case to please read both of them in full to truly understand the stakes and the impact that Apple’s behavior has had and will continue to have on developers and consumers.

That said, I do find one aspect of this second suit to be troubling for Epic: Apple is threatening to terminate Epic’s developer account only if Epic doesn’t revert Fortnite to the version that didn’t include its own in-app payment system. While I feel that Epic is right to fight Apple on this topic, making this simple change would allow it to continue updating Fortnite and the Unreal Engine, and stay in the Apple Developer Program while the first case makes its way through the court system. This is the kind of reasonable behavior that Epic and others expect of Apple. We might expect it of Epic as well.

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Comments (108)

108 responses to “Apple Retaliates Against Epic”

  1. olditpro2000

    I agree. Epic successfully pled their case in the court of public opinion. Now they should revert Fortnite back to the earlier version so they are not making life worse for themselves or their customers.

  2. tripleplayed

    Well this won't look good for Apple in court imo. I hope Epic wins this, closed ecosystems like iOS is not good for consumers. Maybe it will start a domino effect if Apple loses its walled garden and devices will all have to allow at the minimum, side loading of content. Would be nice if Xbox or PlayStation had that option.

    • toukale

      In reply to TriplePlayed:

      What won't look good for Apple in court? Apple is executing the rights they have under the current term epic signed. This has nothing to do with the other court case. Epic violated the rules/term and Apple is simply pulling their access. People need to let the idea of sideloading go, you can currently do that on Android and Epic is still suing. Epic tried the sideloading thing on Android for 18 months, guess what, it did not work, most users won't sideload. Had it worked Epic would not have been back on the Playstore. At this point I am convince, the only ones who wants sideloading are looking at piracy. If Epic with the most successful game around, and all their resources could not get people to sideload their game, then this is not a viable option.

      • bkkcanuck

        In reply to toukale:

        Actually the Apple case is very weak from what I can see, and I don't think there is any technicality that the courts can hang their decision on like in the Apple ebooks case (court basically said and agency model is (which is what this is), and a requirements to offer Apple the best deal that they offer others was also ok on it's own - but not with an Agency model where the industry operates (Amazon, bookstores) on a wholesale model. [they all operate on an agency model]

      • bkkcanuck

        In reply to toukale:

        I agree with you, but I think the court will give a temporary restraining order setting it back to the point before the contract violation and binding Epic to that agreement until the court case is heard.

      • Paul Thurrott

        I'm amazed and troubled by how many people take this stand. As if Epic and Apple were two equal partners in a contract that, once signed, seals their fates forever. If the terms of the contract are found to be illegal or anticompetitive, the contract is invalid. What Epic and many others are saying is that they had no choice because Apple owns a chokehold on 50 percent of consumers in the US and 65 percent of the revenues. So they're challenging the terms of that contract. This is the freaking point of this legal battle.
        • safesax2002

          In reply to paul-thurrott:

          And that is what the first suit is all about. It seems like what people are saying is that Epic made their point/suit and now thinks they should be able to continue on as-is until the suit is decided...which is not how the legal system works. Your (and many other people's opinion) is that Apple is doing something illegal/anticompetitive. That may be true but that's what the courts have to decide. Until then the contract is still valid.

          All Epic has to do while their suit progresses is revert their code and the can stay in the App Store while this plays out (which I think is what you're getting at at the end of your article).

        • curtisspendlove

          In reply to paul-thurrott:

          I'm amazed and troubled by how many people take this stand. As if Epic and Apple were two equal partners in a contract that, once signed, seals their fates forever.

          Epic is trying to make the second suit tied to the first.

          They very well know they blatantly violated the developer agreement they entered into.

          Am I to assume your ToS for this site is useless then? There are many aspects of the first suit that are debatable.

          But this is a simple contract violation. Nothing more, nothing less.

          Is it draconian of Apple to enact it? Perhaps. That is an “eye of the beholder” judgement.

          Is Epic in violation of their agreement with Apple. Yes. And the one with Google too. I’d be surprised if Google revoked their agreement however.

          This is how contracts work. If you want to dispute it, great. Do so in the courts. But you still have to abide by the rules of the current contract until you can get it changed.

          If I chose not to pay my mortgage until they halved the interest rate, I’m pretty sure I’d be homeless sooner than later.

          • Paul Thurrott

            I've literally wrote that there is a problem with Epic's second lawsuit. That's in the post. What I'm trying to guess at is that Epic feels that Apple's ToS is illegal and thus unenforceable. Just signing a contract doesn't automatically put the brakes on future examination of that contract.
            • curtisspendlove

              In reply to paul-thurrott:

              I've literally wrote that there is a problem with Epic's second lawsuit. That's in the post. What I'm trying to guess at is that Epic feels that Apple's ToS is illegal and thus unenforceable. Just signing a contract doesn't automatically put the brakes on future examination of that contract.

              I think one of the interesting things with this set of lawsuits is that both sides actually believe they are in the right and that the other party is wrong.

              But Epic have a clean way out here (which, again, they have setup quite cleverly).

              I anticipate they will, toward the end of the window Apple has given them, disable the in-app purchase discount (now that some people have had a chance to try it and experience the grand elation of saving a few bucks) and say they are in compliance. They can then assume the role of hero they are trying to play and all the kiddies and parents will blame big, bad Apple for the additional cost.

              They are then free to fight the court battle having won in the realm of public opinion.

              Edit: Epic are smart. I can’t assume they didn’t consider the likelihood of Apple revoking their certificates. The problem is that they risk all the people using Unreal Engine blaming Epic for an irresponsible gambling of those licenses. Epic is betting that they will be seen as the “good guys” by everyone, including their licensees of Unreal Engine. If they win, and Dev shops get more of their money back...they may just succeed. After all, there is a reason Epic are able to ink so many exclusivity deals for their game store.

              I’m also curious how Epic would feel if a game in their store tossed a direct payment method in, bypassing Epic’s payment processing. I bet you they would howl on Twitter. ;)

              (I know, I don’t think the Epic Games Store has IAP...but this is a “what if” scenario.)

              My point being, I bet you that if any customer of Epic’s chose to toss their exclusive game on steam even a day early Epic would throw and Epic tantrum and enact the consequences of breaking the exclusivity agreement (which the violating company should expect).

          • nbplopes

            In reply to curtisspendlove:

            Epic is looking to find the contract illegal, which can be if it is considered empowered by anti-competitive means. The reason why Epic decided to void it, I guess, its because if it went to courts in agreement , its position to argue that it does not agree, would be hardly convincing.

            One need not to forget, that when one in two Americans use an iOS mobile device, at least, than the platform becomes hardly avoidable by digital services of any kind. I believe that is indeed what is ramping up the value up to 30% revenue share, considering the underlying services are today comparatively very cheap to “hire” on other platforms. In other words, if the iOS market share was say 1 in 10 Americans, the App Store would be neglected to oblivion by devs ... so its all down to iOS device sales, not the underlying App Store services quality. Vertical integration is not illegal, it becomes illegal when one of the components in the stack has little to no competition to the point that its eating other people/devs lunch, all because its shielded by another layer ... I guess.

            Apple’s retaliation in my view, just shows the power they have. If Epic looses tenths of millions for this, just shows how much power Apple have over devs. No way Apple can argue that the value of Fortnite to its players, its down to Apple effort and service. Fortnite before coming to mobile was already extremely popular. In fact what Apple requires is a 30% cut into their business in the context of iOS. How is that good for iOS customers, especially the ones that appreciate Epic products and service is mind blowing. IOS is Apple property to sell, yet the iOS in the devices people have bought should not!!!!! It’s just common sense. Apple’s action totally violate this common sense. Here is the way out for Apple, you can choose whatever Store you want, but if install any other Store, we pull out all our services, including iOS updates :)

            I ask you this Curtis. A company with two devs can that can do half a million revenue in a year out side the App Store. But if eventually it was an iOS exclusive service, 150k would be down to Apple. Since when SDK’s, IDE, used by two Devs, along with Payment Processing and App Hosting costs 150K in current market prices. In no other platform but iOS, again, unvoidable if not for the market share. The App Store does not play by the market prices of the underlying services provided because it is shielded by the market share of iOS. Simple!

            Now Apple argues that the App Store is an indissociable component of iOS ... well so was IE. Is not very difficult to conclude that if today we have other competing browsers, even better than IE or Edge, was partly down to EU taking action. Before that, Netscape was burned to the ground.

            • curtisspendlove

              In reply to nbplopes:

              I ask you this Curtis. A company with two devs can that can do half a million revenue in a year out side the App Store. But if eventually it was an iOS exclusive service, 150k would be down to Apple. Since when SDK’s, IDE, used by two Devs, along with Payment Processing and App Hosting costs 150K in current market prices. 

              I’ve never said that the 30% figure is a reasonable one. In fact I’ve stated that I don’t know what a reasonable one is.

              Epic has been very clever in this lawsuit. And Apple continues to be stubborn. Which, at some point, means they will lose this and not be able to do things on their own terms.

              So...what happens if their response is:

              Fair enough! We will allow 3rd party frameworks and app stores on iOS. If you use our App Store and accept our cut, you can use our frameworks as well...otherwise, good luck.

              I don’t think they’d do this, since that would impact the overall consistency of iOS.

              But I can’t see them suddenly being “sunshine and roses” and giving Epic everything they want including a competing App Store.

              • nbplopes

                In reply to curtisspendlove:

                Maybe Epic thinks differently, yet considering the Epics move of putting they own payment system, the core issue is the 30% cut. It was ok, when App Store started, there weren’t many services alike for general purpose devices ecosystems, market share meant that the iOS was still avoidable ... Things have evolved in very positive way for Apple, but also the market around the underlying service of the App Store have evolved too.

                I believe that having multiple App Store its not so much of a good solution for users. But there are plenty other solutions. Apple could have several segments of service:

                — App Hosting

                — App Listing

                — App Advertisement

                — App Payment.

                They could have App Hosting and Review mandatory and offer it at reasonable market driven prices, much as they do to iCloud. On top they could allow different payment system options, while keeping Apple Pay has an option ... say with Base Price + Transaction and Service expenses. App Listing (part of search and rank) and Advertisement could also be payed separate as per dev needs or wants. Finally if the Dev wants it all maybe keep than the 30% commission who knows.

                There are plenty of options. I don’t think devs are afraid of the list of menu options in the menu makes it more complicated. I think the core issue, is that indeed mandatory 30% revenue share and than 15%, it does bite on value not delivered by the App Store if the device market share is offset by any means. Just my little example shows precisely that.

                Given the market share they have I think instead of coming with fallacies as if iOS is an avoidable ecosystem as far as digital businesses go, maybe they can be glad with that fact, embarace it and start having a conversation with digital business from small to huge about these Policies and related commissions. Considering that these digital businesses bring so much value to the ecosystem and it inhabitants, not just in terms of the App Store revenue,, stop treating them as a threat to their their value, to their revenue.

                The bing businesses xCloud and Stadia veto are the epitome of how inadequate are currently their policies, down to the smallest of the businesses. These services don’t even host of their games, nothing ... wanting to have the power of vetoing what their business can or not provide is just crazy.

                I honestly don’t think that what they are doing is the way forward, It look like that they don’t know well what to do given that the beast went way beyond whatever they thought it would. But the more they drag this, making unilateral decisions over what they are worth, sometimes arguing that the App Store is a distinct business from iOS, other times it is a component, as it fits the argument, while disregarding the market share they have and how much pressure it puts on all digital businesses to be in their system, the more it seams that the strategy is to push the envelop has far as regulators allow, because in the end there is no regulation. TC himself, asked several times for regulation in all sorts of things ... who knows what he meant?

        • Hifihedgehog

          In reply to paul-thurrott:

          Exactly. In 2020, on iOS, I cannot sideload apps, I cannot change my default apps, and I cannot use any other apps than those on their Store. How is this unchallenged? If this was Microsoft and Windows in the 1990s, you would see hundreds of millions rewarded to the devs for M$'s offense. Apple has been an position of breaking the precedent of hundreds of anti-trust lawsuits for almost a decade now. This lawsuit is long overdue. To all who have any common sense still left, you better hope Epic wins or Apple will continue to abuse anti-trust at the expense of millions of devs worldwide.

        • BrianEricFord

          In reply to paul-thurrott:

          If people think the contract isn’t valid. Fine. That’s a great argument. Debatable though.

          But trying to make this into some sort of life and death situation for Epic and suggesting that a court needs to intervene to save the company and force Apple to allow Epic to violate a contract while the court goes through the process of determining whether the contract is valid seems like a terrible way to handle this.

          The question isn’t whether Epic can stay afloat. This isn’t even a “shareholders are getting screwed” situation. It’s Epic, a privately-owned company, making slightly fewer millions of dollars until this plays out.

          What the court SHOULD do is tell Epic they need to revert to the version of Fortnite that existed prior to when they broke the agreement.

          Refusing to do so should result in court-ordered sanctions.

  3. hrlngrv

    Apple acting as dook-keeper for what gets into their app store may be seen by courts as more of a service for users than a threat to vendors. OTOH, Apple may face rather a difficult time convincing any judge that using only Apple payment systems serves any customer's best interests.

    Me, I'd love to see this blow up in Apple's face, perhaps Apple needing to spin off its payment processing as a separate company, prohibiting that company and what's left of Apple holding any of each other's stock for at least a decade, having NO managers or directors in common. Maybe also shift IP rights to resell others' books/music/content to that other company too, so that that other company would have an economic AND FIDUCIARY obligation to offer that media and payment system to as many non-Apple hardware and services companies as possible. IOW, maybe time to take the chain saw to Apple.

  4. illuminated

    I heard tax cuts are very popular and any problem can be fixed by a tax cut. Why can't Apple just give a tax cut to app developers?

  5. sentinel6671

    Love the feature image.

    "Perhaps you feel you're being treated unfairly?" :)

    Gonna go pop some popcorn...

  6. toukale

    Epic is in the wrong here. Epic could have gone about this the adult way, by filling their lawsuit without any of the pr stunt and violating their contract. By going about this the childish way, they forced Apple's hand. Once their violated the rules, the countdown started on when their account would be terminated. Apple is not doing anything wrong here, people may think they are a monopoly (court is yet to decide that) they are just following what's in the current contract Epic signed. The law will side with Apple on this one. Epic will have to backtrack while all this make its way to the courts.

    Epic winning a few pr points is not going to win them this in the end, its all a matter of law, laws do not take people's feelings (most of the times) into account. We all witnessed what just took place with Qualcomm last week. Most of us think Qualcomm is abusing their power but the courts just found in their favors.

    • Truffles

      In reply to toukale:

      Exactly. Epic didn't need to breach Apples terms & conditions in order to take Apple to court. Instead, they could have simply challenged the legitimacy of Apple's terms & conditions in court while still abiding by them.

      • toukale

        In reply to Truffles:

        Someone said they did it in order to show harm to their business, I am not a lawyer to know what a judge will say/think about this.

          • Greg Green

            In reply to BrianEricFord:

            Fosspatents: “The Ninth Circuit, which is the appeals court for (among many others) the Northern District of California, stated earlier this year that "self-inflicted wounds are not irreparable injury," quoting earlier decisions in this circuit and in the Seventh Circuit.”

            by admittedly violating their contract with apple, epic has created this second self inflicted wound of losing the unreal engine on apple.

          • curtisspendlove

            In reply to BrianEricFord:

            Yup. I was discussing this with my wife. (She isn’t a fan of Epic, but she really really hates Apple.)

            Even she was puzzled by why Epic would choose to risk being kicked off the App Store and getting zero instead of $40-ish million for a few months.

            Must have something good up their sleeves to make losing $40 mil a month worth it in the long run.

            (Seems like maybe they want 12% of the revenue from being able to add Epic Games Store to iOS and Android.)

            • Paul Thurrott

              You need to listen to Tim Sweeney speak on this topic. Literally, he/Epic are just trying to do the right thing. I know this is confusing given the world we live in, but that's all this is. These companies can all make plenty of money without soaking consumers and partners with exorbitant fees. Everyone needs to watch this.
              • curtisspendlove

                In reply to paul-thurrott:

                I don't disagree that almost everyone wins if these prices go down.

                I’m just having a really hard time seeing Sweeney as the “good guy” here.

                If he were really a moral superpower, I think he would have paid Alfonso Ribeira for the dance move in-App purchases they were selling.

                I know his “Carlton” wasn’t granted copyright, but a lot of the others were.

                Do to his history of hating, then loving after paychecks have seemingly been cut; I have difficulty believing this is about anything other than money.

                • Paul Thurrott

                  He literally IS the good guy here. It's easy to see. You should read up on this guy. Seriously. The video I referenced earlier, this... He's more than he seems. And unlike most people, the more you learn, the more positive it gets.
                • smoothbond

                  In reply to paul-thurrott:

                  Good Shout. watched the earlier video as well.

                • Greg Green

                  In reply to paul-thurrott:

                  People download fortnite for free, with apple getting nothing. Now epic wants to eliminate the apple fee of in app purchases, and that’s somehow good? Epic wants apple to do all their distribution for free while epic makes all the money.

                  I think that disqualifies him as the good guy.

                • Paul Thurrott

                  lol ah boy. Apple makes a ton of money by selling that Fortnite gamer an iPhone and making sure that that's the device that person always wants to use. Please, no tears for the world's richest company. The App Store servces its audience of one billion customers and is subsidized by hardware sales.
  7. Usman

    Cutting Unreal Engine from building for iOS and Mac, that's just insane.

  8. lezmaka

    How is this different from the Xbox, Playstation, and Nintendo strangleholds on their platforms?

    • Paul Thurrott

      Market size and market dominance. The biggest console platform is 100 million people. Apple's ecosystem is 1 billion people. You go after the biggest one first and then the changes trickle down. This can/should happen in other markets, too, including consoles.
  9. truerock2

    I don't play games on my iPhone. So, I'm not too concerned about this. And, I really don't have that many apps on my iPhone.

    On my Windows 10 PC I buy games from:


    Good Old Games

    Epic Games

    Origin Games

    EA Games

    Ubisoft Uplay



    etc, etc

    I know Apple is making a lot of money selling apps from the Apple Store - but, not from me.

    One thing... I've never owned a game console because I liked the open platform of Windows.

    I was product manager for information technology and a major multi-national corporation for years. I spent thousands of hours figuring out how much things cost and developing internal charge backs. I realize that Apple is charging 15% for sales after the first year of 30%. Based on my background, those margins seem reasonable.

    The other issue is - of course - open systems versus closed systems. We are very lucky to have a choice and use an open Android product vs a closed Apple product. Both systems have advantages and disadvantages.

    So, I guess the remaining issue has to do with whether Apple has a "monopoly".

    The issue of economic monopoly is obviously very complex. It is best for the US if markets are competitive.

    In my opinion, Apple builds extremely high quality products that offer exceptional value. I would like to have both:

    A competitive US market place, and

    Apple's high quantity products.

    • Paul Thurrott

      "I'm not too concerned about this. And, I really don't have that many apps on my iPhone. On my Windows 10 PC I buy games from [several different sources]." Then you understand it's nice having choices. Imagine if iOS users had that many choices. The fees and prices would be lower and you'd be free to choose accordingly. That is literally a foundational aspect of this case. Oh the hypocrisy.
  10. Andi

    People, surrender your mantle as fanboys or shareholders. Look at this spat from the pov of a consumer. Apple and Google already won. We're no longer at the beginning of the app store economy. It's 2020, Apple and Google succeeded in locking the market, forming a duopoly and becoming two of the richest companies ever. This 30% tax is past its due. The world is getting more and more digital and these companies expect this de facto "sales tax" to go on indefinitely.

    Just because you own a smartphone doesn't mean that Apple and Google deserve a cut of all transactions you do from it. You don't pay a cut on your macbook, your thinkpad, why should you here?

    • zeratul456

      In reply to Andi:

      In my opinion their 30% tax is okay. The problem is that there are little to no alternatives. On Android the alternative is F-Droid which requires you to manually update your apps, same with installing with an apk. On iOS you have none.

  11. jfjax

    Isn't Tencent, with its 48% ownership in Epic, essentially doing the same thing as Apple with it's Roblox platform partnership? Any parent of tweens on this site? Roblox, if I'm not mistaken, takes a 50% cut of in-game purchases, which is very convenient for Tencent.

  12. dftf

    Interesting that just from the Wikipedia article "Unreal Engine" it says that (1) Epic typically ask for 5% of revenue from sales; (2) although there is no-fee if you publish your game through the Epic Store; (3) from Jan 1, 2020, until you have earnt $1m in revenue, they won't take any fee (applicable to those who don't publish via the Epic Store) and (4) you can download the source-code for the engine, to get started making your app or game, for free from GitHub.

    In contrast, Apple charge 30% in year one, which many small and first-time developers on Twitter say is quite crippling (though it drops to 15% every-year afterwards); it costs $99 each-year to be in the "Apple Developer Program" ($299 for enterprises); you can only develop iOS apps on macOS, so have to factor-in a mac purchase ($799 mac Mini or $999 macBook Air); you also have to pay $99 a year to publish apps on the iOS store ($99 covers every app you publish that year, it's not a per-app charge).

    So your first-year on iOS will cost a minimum of $1000 (assuming you go for the cheapest mac Mini, and not a more-expensive computer!) and 30% of whatever revenue you make. And unlike Epic, I'm not aware Apple have any revenue-ceiling an app must go-past before they start to take money from you.

  13. martinm

    Apple are far too used to collecting ridiculous profits from other peoples hard work, just for the right of placing it in their store. This is simply Apple making sure people realize that they need to be paying their "protection money". A legal investigation in to this can't come soon enough.

  14. BrianEricFord

    Meh. I’ve read them both and I think Epic makes an excellent case for the court of public opinion and a tossup case for actual courts.

    I also think Epic should realize that waging a flippant war in the court of public opinion is funny, but will grow tiresome for any judge eventually tasked with actually applying the law to whatever legal arguments they make in court.

    That’s especially true when seeking emergency relief that basically asks a judge to force Apple to continue to allow Epic to breach the contract they signed WHILE litigating the issue. Not sure why any judge in their right mind would tell Apple that they’ve got to continue to let Epic break the rules before it’s even been determined that the rules aren’t perfectly cromulent.

    Epic reverting to the status quo while the legal process plays out isn’t going to cause any risk to Epic’s business. In fact, the opposite is likely true.

  15. tallguyse

    Didn’t Apple cutoff Facebook and Google for similar violations, without warning? I think Apple is in the right to terminate Epic for violating the T&C in what was clearly a premeditated act by Epic.

    That said, it seems like every other day there’s another story of a developer unhappy with the App Store policies. Apple could be doing more to improve relations with its developers.

    When Steve announced the App Store, he explained that the 30% was a break even business. It no longer seems like that’s the case, which I think is why so many developers are chafing at it.

    Apple should have gotten ahead of this before WWDC this year, since this is clearly not going away, and companies are more willing to escalate and let things play out very publicly.

  16. scovious

    Apple losing Unreal Engine support would be a more devastating blow than they could imagine; they aren't helping their reputation with any of this.

    • jimchamplin

      In reply to scovious:

      They likely know exactly what it means. They also likely expected Epic not to act like a child.

    • toukale

      In reply to scovious:

      I think Epic and unreal engine is done on mobile in the next 3 years. I look for Apple to start to heavily favor unreal competitors with their next Xcode update to the point where if any developers wants their games to work on Apple's platform they won't be able to use unreal engine (Nvidia). Its a math issue. CNBC reported last week in the last 30 days fortnite earnings were as follow: iOS $43 millions, Playstore $3.3 million despite Android being a bigger market, the spending is not even close. Like it or not Apple has a lock on the users with the most disposable income, everyone in the industry knows this, 80% of the users with the most disposable income have an Apple device is what CNBC said.

      I can't blame Apple for any of this, Epic is not complaining about the 30% fee and a reduction of it, they even said they don't want that in their filling, they instead are targeting a much bigger pie, 12% of every developer business. They want to replace the iOS store with their own store. The appstore accounts for 60% of Apple's fastest growing business (services) and the reason why Apple is on the verge of reaching $2 trillions and they thought Apple was going to just stand there and watch another company try to rip it from them? What were they smoking, this is a war Epic will lose in the end.

      • dftf

        In reply to toukale:

        "CNBC reported last week in the last 30 days fortnite earnings were as follow: iOS $43 million, [Google Play Store] $3.3 million despite Android being a bigger market"

        Interesting... I wonder how-much comes from console (Xbox, PlayStation, Nintendo) and computer (Windows, macOS, Linux) sales? Unreal 4, the current engine, is supported on all of them. I wonder if Apple is overall their biggest revenue-source or all of the console-games that use their engine combined would be bigger?

    • Hifihedgehog

      In reply to scovious:

      Good thing too. Apple deserves it. I hope Epic pulls the Unreal Engine so people realize just much antitrust precedence Apple has been violating and has gone unchallenged for a decade strong in those violations. The fact I have to violate my warranty to install the apps I want the way I want in 2020 is absurd. Do we have 2020 vision folks? Have we all forgotten what happened when Microsoft pulled similar shenanigans and got slapped with millions in fines? Remember the Netscape, Windows Media Player and similar situations and outcomes? This needs to all get fixed pronto. Get off the techie fanboy boats and remove the techie rose-colored glasses. Apple is a law-breaking operation that is oppressive to its devs and they need to own up to it all.

    • curtisspendlove

      In reply to scovious:

      Apple losing Unreal Engine support would be a more devastating blow than they could imagine; they aren't helping their reputation with any of this.

      In reply to toukale:

      Not only that, Epic can win this war and still lose. Let's say the courts say they agree and Epic can have their store. I would look for Apple the do to Epic what they did with Nvidia to the point where no developer would bother developing with UE for iOS, which in effect would render their store ineffective.

      Yup, exactly.

      Unreal isn’t the only game engine in town. I believe it is technically superior to Unity, but Apple can help change that if Epic wants to piss them off enough.

      One keynote segment walking a Unity 3D team up onstage and “blessing” the framework would be pretty devastating to Unreal.

    • BrianEricFord

      In reply to scovious:

      why? Why are people suddenly acting as though gaming on the Mac matters when up until this post those same people were probably mocking the entire idea of it?

  17. jfgordon

    If I judge that an iPhone costs too much, I do not buy one. Should Apple's hardware and software be made cheaper by law?

    If developers judge that publishing on the App Store costs too much, they do not publish on it. Should Apple's services be made cheaper by law?

    I really do not get it. We are not talking about essential commodities such as water, meds, internet connection etc., where price control might have a social motivation. It's games on phones.

    • garethb

      In reply to jfgordon:

      Lets take another recent example;

      [in 1998:] "If I don't like that Internet Explorer is the default browser in Windows, I can just not buy Windows."

      The whole point here is the coercive power of the market to force acceptance of unpalatable terms.

    • wright_is

      In reply to jfgordon:
      If developers judge that publishing on the App Store costs too much, they do not publish on it. Should Apple's services be made cheaper by law?

      But how do you reach iOS users, if you aren't in the Store? If it is a simple web site or web app, you might get some to use it, but games? No real other avenue. They just don't really have a choice.

      And 30% on in-app purchases... It isn't as if Apple has a huge warehouse full of those in-app purchases and they have to wheel them over from the warehouse, in gold-plated wheelbarrows, and tip them into the Internet connection.

      It is just brokering a financial transaction, the digital goods are already installed on the device or are streamed from the devs own infrastructure. Apple is purely brokering the transaction, the same as any credit card company. That doesn't require 30%. It is different for the initial purchase of an app, but those in-app purchases don't cost Apple a single cent, outside of the payment fee. If the app developer has a deal with another payment service for 2% - 3%, why should they be forced to pay 10 times as much?

      Even so, on the initial purchase, it doesn't cost Apple 100 times as much to sell a $99 app over a $0.99 app.

      Nobody is asking Apple to turn the App Store into a charity or just give it away, they are asking for either real competition or prices that have basis in reality.

      • jfgordon

        In reply to wright_is:

        Of course I believe that 30% is a steep price. I have no opinion what would be the minimum justifiable price etc. But you are not required by law to have the lowest possible prices: there are e.g. luxury handbags that cost many times the money it takes to design and make them, etc. That is how a premium service is priced. Do you want to reach premium customers with your software? Well, you have to pay a premium price. Apple's store offers good customers to developers, (I believe iOS users spend much more on average than Android's,) not only good software to users.

        But again, my point is: no one is entitled to reaching those customers. Those are Apple's customers, first and foremost. They freely chose a walled garden. Many are happy that the software that runs on their devices has been scrutinized by a company they trust, and that their devices do not put their personal data in jeopardy, on the contrary, it actually forces the developers to use a common, well-looked-after set of tools to manage privacy and financial transactions.

        So again, I am all for open and choice. And exactly for this reason I do not understand why people side with Epic on this issue. In this case, this is Apple's choice, (and its cutomers',) not Epic's.

        • wright_is

          In reply to jfgordon:
          luxury handbags that cost many times the money it takes to design and make them, etc.

          Yes, but the owner of the handbag can still go to the local pharmacy and buy a 99c lipstick and put it in the bag, if they want. They don't have to buy a $99 lipstick from the bag maker's store.

          There is a big difference between a service and physical goods.

          Apple's store offers good customers to developers, (I believe iOS users spend much more on average than Android's,) not only good software to users.

          Except it doesn't offer good customers to developers. It doesn't let the developers anywhere near its precious customers. It keeps them behind a magic curtain.

          But again, my point is: no one is entitled to reaching those customers. Those are Apple's customers, first and foremost.

          No, they decided to buy my app, so they are also my customers, only Apple won't let me know who they are or talk directly to them.

          In this case, this is Apple's choice, (and its cutomers',) not Epic's.

          Again, no. It is Apple's choice. Everybody else can go to hell, as far as Apple is concerned, as long as it gets its 30%.

    • JacobTheDev

      In reply to jfgordon:

      Monopolies aren't exclusive to essential commodities. Companies have been built upon being able to distribute software via the App Store, and Apple provides no alternative. You can make an argument "well that's the companies fault for being so reliant on another company," but that's how industry works, and you can't just ignore a large portion of potential customers.

      With Epic's suite against Google, I'm slightly in favor of Google, simply because there are other ways to distribute software than the Play Store (not ways that are as pervasive, but still, there are options). With iOS, there is no legitimate way for a customer to install an app besides through the App Store. That's why this is an issue – it's either play by Apple's rules or not at all.

      • jfgordon

        In reply to Jacob-Bearce:

        I do not agree on the last point: "It is either play by Apple's rules or not at all." This is only true as far as Apple's hardware and software and services are involved. The vast majority of phones in the world do not run iOS! Apple's is not a monopoly by far. You have plenty room to play outside of Apple's walled garden. But Apple's share of the mobile market is the most lucrative - well, that is exactly because of their rules (in software design, service distribution, etc.) not despite of it.

        I guess every EULA is full of weird conditions, that you accept when you buy the product. Or at least you have no legal basis to complain about. IIRC on Windows 7 Starter Edition you were prevented from *changing the wallpaper*, for crying out loud. Unsatisfied? Well, you had to upgrade to Windows 7 Home.

        • Paul Thurrott

          This case is in the United States, where Apple typically has almost 50 percent marketshare (it was over 50 percent in the most recent quarter) and is in a duopoly with Android. But don't get hung up on the word "monopoly." Everyone uses it wrong anyway, but you don't need 90 percent share in some market (or whatever) to abuse market dominance.
        • Usman

          In reply to jfgordon:

          It's not about market share percentage at this point, it has an install base of over a billion users and they're shaping restrictions on personal computers going forward.

          They tout iOS's app platform as replacing a traditional computer, people have been vocal about these restrictions, on Windows 8, RT, S, S Mode etc. We're getting to a point where these operating systems are general purpose, people use them as a general purpose devices, they use a variety of different software and it is their main form of personal computing.

          The user behaviour has changed from treating these things as handy gadgets, to being the primary digital computer they use. As a software engineer, I see it as absurd that Apple can dictate what software is allowed to run on it and what percentage revenue you are owed for running your software on their operating system with an install base that rivals Windows 10.

      • Hawaiianteg

        In reply to Jacob-Bearce:

        You do know there's 2 parts to googles lawsuit right? Is everyone forgetting the part that google strong armed a handset maker to not carry the epic store preloaded ????? Or is that not a thing cause everyone here loves android?

      • mattbg

        In reply to Jacob-Bearce:
        With iOS, there is no legitimate way for a customer to install an app besides through the App Store. That's why this is an issue – it's either play by Apple's rules or not at all.

        I see this as a net benefit. Most normal people using iOS don't care if they can sideload an app, but they're helped by not being able to do it in terms of having a reliable gatekeeper that makes sure apps follow Apple's standards and that nothing hinky is going on in the background. There are always going to be misses, but this is generally true.

        Most people who want to subvert the system or pay for everything with bitcoin are on Android already.

  18. richardbottiglieri

    Serious question: what's a fair percentage for Apple or Google to take on in-app purchases? Curious what the community thinks.

    Even though free apps don't pay anything to Apple for hosting in the App Store, those are in large part subsidized by the fees collected from the paid applications and Apple hardware. In Google's case, it's also supplemented by the licensing fees it receives for the Android software from hardware manufacturers.

    I do think that Apple and Google deserve a cut of the in-app sales. They supply the infrastructure and staff to keep their App Stores operational, and they also operate the payment platforms. In Apple's case, they're selling privacy, security, and ease of use. There's something to be said for an Apple consumer not having to enter their payment information to any app they download and want to pay for within the app. If I pay using Apple, I can be reasonably sure that the transaction is safe and my payment details are secure. If I have 15 apps on my phone that I'm paying for, that means I'm entering payment details 15 times, right? So, I do think there's a value add here, not only from my side, but also from the app developer's perspective.

    Take an app with a $10 in-app purchase. What if app developers could offer two choices for payments: pay using Apple or Google for $10, or pay using [WHATEVER] for $8. Apple or Google could enforce a blurb about the benefits of using their payment systems, and let customers decide what's best for them. Or is that too complicated?

    • Paul Thurrott

      Same as any other payment provider. 2 to 6 percent.
      • mvalluri

        In reply to paul-thurrott:

        Why? How about we let the marketplace decide? If app publishers voluntarily using a platform Apple created - and made hugely popular - are willing to pay the fees Apple charges, why is that a problem? If on the other hand, they do not want to pay the fees, Apple has zero power to force them. Why do we need philosopher-kings dictating how everyone else should operate?

    • wright_is

      In reply to richardbottiglieri:

      For in-app purchases, where they don't have to deliver anything, don't have to store anything, don't have to do anything, other than process the payment? The same as a credit card company?

      For the initial purchase, that is another matter. There they are providing a store-front and advertising etc. But 30% seems unfair. On a 99c game, they get 33c per download, for a $99 application, they get $33 per download. That $99 application isn't going to be 100 times the size of the 99c game. And "free" games? They don't pay anything. There should be a sliding scale, with, say 30% or $5, whichever is the higher. ($5 is a random number plucked out of the ether, obviously Apple would have to show how much their download service costs per purchase. So that the $5 subsidises the cheaper apps, somewhat, so that Apple still make a small profit.)

    • sandy

      In reply to richardbottiglieri:

      5%, but perhaps up to 10%, definitely not more. (3% covers credit card payment fees, the rest should easily cover Apple's costs.)

      It's unacceptable that iOS apps aren't allowed to tell users they can pay a cheaper price on the app creator's website (because of no Apple 30% vig).

      Apple need to stop prohibiting references to payments (including subscriptions) being able to be paid not using Apple's payment system, allow links to store websites (such as the Kindle store), and stop blocking game streaming apps (which are very similar to Netflix, etc.).

      If Apple remove those restrictions, it'd be fine to still insist on providing users with the Apple payment option, so if you don't trust whatever app's publisher with your credit card details you can still pay extra to pay via Apple.

    • mattbg

      In reply to richardbottiglieri:

      The whole Epic drama is because Epic did precisely what you've proposed - they offered two payment options, to the effect of "pay x with Apple or pay x-30% with Epic" :)

      I think the reason it is the way it is is that any other method of compensating the store owners for running the store is going to be convoluted and unfair to some other group of people.

      What causes Apple the most direct costs? My guess is that it's the price of the app (i.e. 3% for payment processing) plus the size of the app, number of installs, and the frequency of app updates. The last three things require a well-maintained global infrastructure to distribute to hundreds of millions of devices.

      In-app purchases to enable features often don't incur any of the above, and these apps are often free, so these apps haven't paid their way in any capacity.

      If you wanted to bill more commensurate with use, it'd be an algorithm that blends those factors above, but it'd mean that different vendors would pay wildly different amounts and a whole group of other people would not be happy. I mean, imagine what that would do to Facebook that may have 500 million iOS users of a free app that has bi-weekly app updates that are 100MB+ (numbers made up, but they are within the Overton window :)).

      You could argue that the current rules benefit smaller developers who don't have the ability to make a name for themselves and run their own sales platform. Epic is not a smaller developer.

      I don't think anyone should see Epic as the good guy here. They have a game store that favors games made using their own game engine. It's not a very good store, and it charges a lot for what it does deliver (Steam charges more, but Steam also adds a lot more value). They are trying to raise their profit margins just like everyone else, and they are trying to ride a popular wave to make that happen.

      I don't know how much profit Apple makes off running the app store, or if that data is available publicly. But what would we say if Apple showed that they broke even on it with their current 30%? Would we demand they take a loss? Or would we ask them to come up with a more app-specific charge that is going to benefit and disadvantage different groups of people?

      Personally, I want Apple to be the only way of installing and paying for apps on iOS. Some features like Family Sharing (and family approval of app installs and payments) seem to revolve around this. They need to come up with a better deal, though, because some of these restrictions are a negative for the user experience and I think that's where you need to reconsider (i.e. not being able to buy a book from the Kindle app).

      • lvthunder

        In reply to mattbg:

        Yes, some people are demanding that Apple run the App Store for free.

        So who wants to type their credit card number into each app?

        • Paul Thurrott

          That's not the alternative. Obviously.
        • Usman

          In reply to lvthunder:

          But you don't type a credit card number in each app, the app developer like every other website will integrate a payment agregator like paypal or amazon checkout.

          I can purchase from traditional store apps, like Adidas, eBay, Amazon etc, without having to go through Apple or Google's payment processor. These app stores have an arbitrary rule on digital items, where they feel they're entitled to a 30% cut. But from other stores I can purchase gift cards for other services, so I am unsure how they can justify taking a 30% cut on digital revenue, when I could from another app, purchase gift card code and then redeem said code.

        • garethb

          In reply to lvthunder:

          Is anyone literally saying that? I think there are plenty of opinions on whether Apples consumers should have a choice, or that the current 30% is excessive.

          I think a missing piece of the puzzle here is the profit from sales of the iPhone. At some level, part of the consideration of buying an iPhone (or iPad) in the first place is the App store and the available apps.... the focus on 30% as all that Apple gets from the App Store existence is somewhat opportunistic.

          Apple hasn't become the biggest, richest company in the world - at least outside of Oil companies - is that the iPhone ecosystem makes them a shedload of profit.

    • wiley

      In reply to richardbottiglieri:

      Yes, you just described the way Android works today. Pay with Google and give Google their 30% or pay elsewhere and the developer gets to figure it out.

      In practice, that tends to mean Developers go with Paypal and pay 2.9%+$0.30 instead of 30%.

      Apple and Google have no involvement in in-app sales other than the payments platform. Buying something in-app does not trigger any work on the app store side.


      Google's policies do differ from Apple's in that subscriptions are 30% for the first year and 15% thereafter on Google. Apple has a constant 30%.

  19. mattbg

    This line at the end of page 4 of Epic's argument is great :)

    In Fortnite, players can create new environments, watch a film, attend a concert or participate in a roundtable on racial equity in America. 

  20. glenn8878

    But that solution will tie to the different issues together that should be litigated separately. This is retaliation since the in-app payment has nothing to do with the Apple Developer Program.

    • Truffles

      In reply to glenn8878:

      It would be reasonably open to Apple to conclude that Epic will patch their other software to implement non-Apple IAPs. The fact that Apple appears to have given Epic 10-days to bring Fortnite back in to compliance reinforces that view.

  21. IanYates82

    Reverting fortnight wouldn't be a backdown, so seems like a smart thing to do - clear stake in the ground and avoid the immediate ramifications whilst still having kick-started the legal wrangling

  22. darkgrayknight

    I can't imagine other developers using Unreal Engine on iOS being happy about Epic no longer being able to keep Unreal Engine going for iOS. There are a lot of developers using Unreal Engine. This may bring about movement away from games being developed for Apple.

  23. jimchamplin

    Apple needs to be taken down a notch in this topic, but I’d say that this is a reasonable response to what was a premeditated, blindside attack. Restore the previous version, and even though legal action is in motion, they can keep doing business. Okay.

    Was Epic surprised by this? Seriously? Between the fact that they’re not going after console app stores which do the identical thing, and now this response, they’re starting to look like they’re just pulling a huge publicity stunt.

    If there’s anything I would like less than courts and politicians deciding how my personal technology works, it would be a sophomoric publicity show.

    Edit: grammar, spelling

    • IanYates82

      In reply to jimchamplin:

      Small, however significant, difference for the console market is that console hardware is sold at a loss and subsidised by the games ecosystem - it is a shared burden for platform owner and game maker (for a while at least). Console is single purpose device and thus can have this shared market.

      Phones and tablets are general purpose devices, definitely sold at a profit, so there's not that cross-subsidy required

  24. madthinus

    Began, this war has.

  25. jim_vernon

    In reply to SyncMe:

    A contract is not a final say on a matter. If the terms are illegal, or Apple's retaliation is illegal, a judge can take action. How is it that so many people don't get this?

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