Microsoft Backs Epic in Fight with Apple

Posted on August 23, 2020 by Paul Thurrott in Apple, iOS, Microsoft, Mobile with 45 Comments

In a new legal filing, Epic Games argues that Apple is threatening its entire ecosystem with its belligerent behavior. And it has the backing of Microsoft.

The new filing is just the latest development in the quickly escalating saga of Epic v. Apple, in which the former company alleges that Apple is abusing its dominant position in mobile and behaving in an anti-competitive fashion. Apple has attacked Epic, in turn, for violating the terms of its developer contract and is threatening to pull Epic and its Unreal Engine out of its App Store, a move that would damage many, many game developers.

“Over the past week, multiple Unreal Engine licensees have contacted Epic expressing grave concern over Apple’s actions and its impact on their iOS and macOS-bound projects,” the legal filing notes. “Epic submits herewith … a declaration from the General Manager of Gaming Developer Experiences at Microsoft addressing this issue.”

“Kevin Gammill, Microsoft’s General Manager of Gaming Developer Experiences, attests that there are ‘very few other options available for creators’ that offer ‘as many features and as much functionality as Unreal Engine across multiple platforms, including iOS’ and that Apple’s revocation of developer tools ‘will place Unreal Engine’ and games that use it ‘at a substantial disadvantage,” the filing notes.

“Mr. Gammill also explains that ‘Unreal Engine’s sudden loss of support for iOS and macOS would create significant costs and difficult decisions’ for game creators, who ‘would have significant sunk costs and lost time using Unreal Engine for game creation, and would have to choose between (a) starting development all over with a new game engine, (b) abandoning the iOS and macOS platforms, or (c) ceasing development entirely’.”

Microsoft, of course, has its own issues with Apple and its unfair App Store licensing policies. The software giant will soon launch an Xbox Game Pass streaming app on Android, but it is unable to do so because Apple’s rules forbid any game app from offering multiple titles, as would Microsoft’s. Apple says that it would need to examine each game the app offers in order to protect its users from abuse, while Microsoft counters that there are already rating boards that provide this service in the game industry.

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Comments (47)

47 responses to “Microsoft Backs Epic in Fight with Apple”

  1. Avatar

    Saarek

    The pot calling the kettle black!


    How about Microsoft remove or significantly lower their 30% fee for games on the Xbox before advising Apple to do so.

    • Avatar

      SRLRacing

      In reply to Saarek:

      Reading is important. Microsoft's statement only comments on the revocation of licensing for Unreal Engine not the app store fight at large.

      • Avatar

        BrianEricFord

        In reply to SRLRacing:


        which in turn means Microsoft is inviting anyone who develops for xbox to violate the terms of their agreement with the idea that Microsoft will refuse to exercise the penalties laid out for doing so.


        The alternative appears to be that Microsoft only believes it’s okay to violate an agreement if Microsoft is impacted by the punishment.

        • Avatar

          curtisspendlove

          In reply to BrianEricFord:

          which in turn means Microsoft is inviting anyone who develops for xbox to violate the terms of their agreement with the idea that Microsoft will refuse to exercise the penalties laid out for doing so.


          I’m still pretty curious how quickly Epic would bring the hammer down on any licensee of Unreal Engine who refused to pay their 5% gross revenue share.


          I betcha Mr. Sweeny wouldn’t be supporting those game developers on Twitter, talking about how wonderful they are in their holy war.


          Has he ever said what they consider fair? If Apple suddenly said (which would never happen) ok we will match the same terms Epic uses on their Games Store would Epic just drop the lawsuit and back down...enjoy the beers all the game devs would buy their new industry heroes?


          I doubt it. I’m still pretty sure they’d continue to try to get their App Store on Apple’s platforms.


          I don’t understand why they haven’t just released their Games Store as a test bed on Android where they can compete. And then used that as empirical data for sales they and similar companies are missing on Apple’s platforms.


          BTW, anyone curious should search for Silicon Knights. Epic is no stranger to court cases. And they will fight it out. I can’t find or remember anything though about them suing first for breach of contract style cases in regard to Unreal.

    • Avatar

      Andi

      In reply to Saarek:

      This has nothing to do with MS. This is about a mobile app challenging a mobile duopoly of which MS plays no part. This latest issue is how Apple's blunt actions can harm 3rd parties that previously were out of this spat. Just like the US sanctions damage collateral nations so do Apple's actions might potentially harm MS and others that are "guilty" of licensing Unreal Engine.

  2. Avatar

    curtisspendlove

    “Kevin Gammill, Microsoft’s General Manager of Gaming Developer Experiences, attests that there are ‘very few other options available for creators’ that offer ‘as many features and as much functionality as Unreal Engine across multiple platforms, including iOS’ and that Apple’s revocation of developer tools ‘will place Unreal Engine’ and games that use it ‘at a substantial disadvantage,” the filing notes.


    Call me crazy, but if Unreal is the only real option around...


    seems like they have a monopoly on the game engine industry.


    No?


    Maybe they are too big to fail.

    • Avatar

      wright_is

      In reply to curtisspendlove:

      As has been said hundreds of times already on this site, there is no problem with being a monopoly. It is abusing that monopoly position that causes problems.

      That is why the law looks at the competition side, not just at monopolies per se. You can not have reached monopoly status and still be in breach of fair competition laws.

      • Avatar

        curtisspendlove

        In reply to wright_is:

        I was being sarcastic. I just find it funny that Epic are trying to pump themselves up in these lawsuits.


        I’ve done quite a bit of research on game engines and although concrete data is pretty hard to come by, it is widely held that Unity 3D and Unreal are the top two choices.


        Unity seems to have about double the market share in regard to quantity (about 45% to 15%), but if you were to attempt some sort of quality filter, Unreal has a majority of the “top-tier” AAA style games locked up.


        I’d be very interested to see what the market share breakdown would look like across platforms.


        I’m willing to be most iOS games, for instance, are driven by non-Unreal engines. But that is just speculation.

  3. Avatar

    ghostrider

    I've no love for Apple's policies, but are we expecting MS to hand Epic an olive branch and allow them into Microsoft's app store with a much reduced transaction fee? Wouldn't put it past them...

  4. Avatar

    spiderman2

    good, hopefully netflix ecc will join the fight


  5. Avatar

    Greg Green

    In reply to RM:

    MS uses the same model and percentage for Xbox. And ‘Everyone is required to use the [xbox] Store.‘

  6. Avatar

    toukale

    In reply to RM:

    Does not matter, Microsoft will still get their cut no matter what.

  7. Avatar

    Vladimir Carli

    In reply to RM:

    Games on Apple Arcade are so abysmal that they wouldn’t be played even if in a monopoly

    • Avatar

      curtisspendlove

      In reply to Vladimir:

      I’m entertained that anyone thinks all the games will disappear from the App Store if Fortnite or Unreal go away.



      • Avatar

        Paul Thurrott

        Games won't instantly disappear. But they won't be able to be updated over time and if the ban goes on for months or years those developers will have to go to the great expense, and take the great amount of time, needed to switch engines. There is a real cost to this ban to innocent third parties, which is why a federal judge has already ruled against Apple in this instance.
        • Avatar

          curtisspendlove

          In reply to paul-thurrott:

          Of course it would be a huge burden to swap engines out. That would be crazy. There is no reason a judge should ever rule for the Unreal dev tools to go away.


          I was merely stating that some people seem to think Unreal is the only answer. If Unreal dropped off the face of the earth it would suck for existing games and Apple *would* have a lot of angry customers.


          But new games would just move to a different engine.


          But that would never happen for a long term. I don’t think Apple is even that stubborn.

  8. Avatar

    lvthunder

    All Epic has to do is revert the changes to Fortnight and the danger to Unreal Engine goes away. The original lawsuit would still go forward. Epic should follow the agreements they signed. They should have filed suit without breaking their agreement in the first place. If I were the judge this is how I would rule on this part of the lawsuit.

    • Avatar

      kjb434

      In reply to lvthunder:

      Epic doesn't need the iOS users and the developers that use Unreal are collateral damage. It's not like the developers will switch to Unity or re-engineer their app. Unreal will just be stalled on the platform in its current iteration with no support.


      The collateral damage will be used by Epic. Seeing MS jump in there now mean MS sees some benefit in siding with Epic.

  9. Avatar

    lvthunder

    In reply to RM:

    It does if they want to be on XBox.

  10. Avatar

    waethorn

    If Apple doesn't think that consumers care about app restrictions on their platform, let them put their money where their mouth is and let consumers decide their fate. If they want a walled garden and it turns into their own prison cell, let consumers decide that too. This is a first-world problem.


    As Trump says: 'Whatever.'

  11. Avatar

    SvenJ

    In reply to RM: Epic is required to use the XBox store.


  12. Avatar

    reservoirmike

    In reply to cavalier_eternal:


    I believe this is called the illusory truth effect.


  13. Avatar

    nbplopes

    In reply to RM:


    I subscribe Apple Arcade, and both my kinds, one 9 and the other 13 prefer Minecraft, Fortnite .... I just unsubscribed it. Meaning if Apple Arcade is the best option they offer to their customers ... my kinds and hundreds of millions will move out. Kids will be mostly on their commercials. Both of my two kids are arguing for a PC ... I wanted to give an iPad Pro to my eldest for school but he wants a PC, and the school advises it because some free educational software on the web simply does not run on iOS and there is no free option there. Now these App Stores practices don’t really look that inviting ... 30% revenue over my customers? No way ... think reasonable businesses ...


    There is no doubt Apple is being at least extremely aggressive towards other digital businesses using their own customers (not Apple’s alone) as a weapon to accept the deal. First with App Store policies, but now they went further on what is a legal dispute by effectively moving to harm, I mean really harm, a third party business in the middles of a trial, to make them, force them to drop their stance. If that is not monopolistic don’t know what it is. Let’s see how that pans out in time.


    If these, guys Epic, Amazon, MS, Spotify, who ever feels that the deal is being pushed unfairly, pull the apps out, or do what Epic did, yes loose momentary a large lump of money, win the case against Apple and than sue them for revenues lost due to anti-competitive practices. That would be fun. The only problem is it’s unpredictably ... who knows.


    What Apple is asking these companies to do is akin to betting against themselves to maintain the customers they have. Apple is already using the revenue their are forced to share to access their customers and for services way above market prices ,to build products that compete with themselves ... hehhehe. Lovely. I see a perfect storm coming ... or maybe not.

  14. Avatar

    BrianEricFord

    The gaslighting going on here is crazy. It remains true that if Epic wants to avoid the risk of getting cut off from developer tools all they have to do is declare a cease fire while litigation plays out and revert their current iOS build of Fortnite to the version that complied with Apple’s developer agreement. They can clearly do this because they made the offending change without ever submitting it through Apple’s update process.


    Once that happens, Apple stops threatening the nuclear option outlined in the agreement and Sweeney goes back to being petulant for his cheering hordes of fans (which, shockingly, exist) on Twitter and lawyers make their arguments and the end result is the end result.


    What I find interesting is Epic is suing Apple and saying that their ecosystem is so big, and so powerful, that Epic must be allowed their own marketplace, free of Apple’s rules and payment requirements. As part of that, they’ve put their Unreal Engine at risk and the legal filings against Apple essentially make the argument that Unreal is SO vital to the gaming industry that ANY interruption to its availability to its consumers would have a chilling impact on the industry. As such, Epic has to be allowed to continue to violate agreements that it argues — but no court has found — are legally invalid.


    Maybe Unreal ought to face some lawsuits about its size and power?

    • Avatar

      Andi

      In reply to BrianEricFord:

      Epic is challenging the exclusivity of the payment processor. Not the walled garden.


      Apple can block Fortnite without pulling the plug on Unreal Engine, engine which powers other companies' games. Not doing so will reinforce the notion that Apple has discretionary power to harm other companies in the marketplace.


      Let's abstract Epic's hordes of fans and focus a little on Apple's evangelists that are so many, they support multiple tech blogs by themselves. That's despite Apple itself having lost the moral high ground ages ago, having been found on the wrong side of anti trust law 3 times already. What is animating these people that are shilling for the richest company in the world?

      • Avatar

        BrianEricFord

        In reply to Andi:


        You are incorrect when you say Epic’s claims are limited to payment processing.

        • Avatar

          Andi

          In reply to BrianEricFord:

          That's the spark of this battle and the most that Epic stands to win. I don't believe anyone or anything can force Apple to modify its business to open the walled garden like Android. The exclusivity of the payment processor however, that is up for debate. That is what Spotify was asking as well and makes sense.


          Still, as the latest ruling approved Qualcomm's MO as being "hypercompetitive" and not monopolistic, I fear Apple might win on this in similar manner. The US is notoriously pro business rather than pro consumer.



  15. Avatar

    Mark from CO

    I wonder if what will eventually get Apple is not their policies per se, but the obviously inconsistent application of those policies creating a very uneven and inconsistent competitive marketplace.

  16. Avatar

    toukale

    Like I said, Epic is doing a ton of spectacle/noise that will get blogs/forums lots of clicks but I expect them to reverse course on August 27th @ 11pm to meet Apple's deadline. Their suit will continue their current course. I do expect Epic overtime to stop enjoying the advantage they currently have on Apple's platform. I look for Apple to start adopting/supporting other game engine better in the future. Apple is one of those companies that holds grudges for a long time.

    • Avatar

      BrianEricFord

      In reply to toukale:


      It’s going to be a VERY long few years if every single filing is going to warrant an article on every major tech site.


      Meanwhile, if anyone has any recommendations for an outlet that actually employs legal analysts that are looking at this with an actual emphasis on the law — rather than through the prism of ignorance and bias — please let me know. I’ve been in the legal industry for 15 years and to probably 60 or 70 product liability / civil / tech industry trials for litigation support and even I would never purport to backseat-lawyer-splain expected outcomes like every outlet writing about this does. There’s been absolutely no attempt to actually look at this from an educated standpoint at all, but a ton of people think they know what the outcome will be or should be.


      • Avatar

        Greg Green

        In reply to BrianEricFord:

        Imore.com has this:


        Interview: Two experts weigh in on Epic's lawsuit against Apple

        "Epic's complaints are very well-crafted, but the hurdle for establishing an antitrust violation is high"


        worth a read.

        • Avatar

          BrianEricFord

          In reply to Greg Green:


          Hoooof. No. I used to LOVE that site because at one point it was exactly what I wanted — a great aptitude for reading the temperature of litigation he became known for — but then the author went off the deep end and became VERY partisan in his rooting for Samsung, stopped calling balls and strikes, and essentially admitted that part of his motivation was getting his own app off the ground.


          EDIT: I did go ahead and go check it out. I will say that his analyses are pretty good. He seems to be evaluating the filings and predicting how they’ll stack up against the law and the Judge presiding over the hearings. May give him another chance.


          EDIT AGAIN: You’re right. It’s all really good.

  17. Avatar

    scovious

    The growing movement against Apple continues to boil over...

    One thing is certain, gaming on an Apple device has never looked worse.

  18. Avatar

    rusty chameleon

    Hasn't Microsoft also tried to jump into the "store" game with a 30% cut?

    And now that it has mostly failed, they are on Epic's side?

    I thought so.

  19. Avatar

    dstrauss

    It's so funny to watch these elephants (Apple, Microsoft, Google, Amazon) stampeding against one another and crushing all of the smaller animals between them. When you ask the courts to "do equity" among the parties, you need to come with clean hands, and there' not enough Lava to clean up this mess. Each one only serves their own agenda until they need something from the other. Apple only exacerbates this with the "protecting their customers" BS when it only protects their turf and revenue stream. In the same vein, Apple has created the preferred user platform (at least where users are more willing to spend money on apps than the Android universe) so the the little guys can't ask for a free ride. Does anyone think National Geographic should share its subscriber list with other travel magazines?


    The only thing the courts can and should do is enforce equal treatment - Amazon shouldn't get a better deal on Apple than other content providers. Make the rules clear and equal.

  20. Avatar

    stmorr82zw5zml

    Breaking news at the iPhone 12 launch in September: Apple launches Swift Engine, a proprietary game engine designed exclusively for iOS, iPadOS, and macOS.

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