Epic Games

Apple vs Fortnite - The FULL Story!

You’re probably aware that there’s a massive dispute going on where not only has Epic Games sued Apple, but Apple has now removed Fortnite from the App Store. I want to give you the full story and everything you need to know when it comes to what is probably one of the biggest ever battles between two tech companies. Get those snacks ready and enjoy! 

If you’ve been following me on Twitter (@ZONEofTECH), you probably know that I’m kind of on Apple’s side here. But, to be as unbiased as possible, I’m going to split it into four sections: Apple’s Side, Epic’s Side, My Thoughts and the Present Day. 

Epic’s Side

Starting off with Epic’s side, Epic Games are now one of the biggest Game Development companies in the world, mostly thanks to their very popular game… Fortnite. But they were not always like that.

Whilst they were known for the first three ‘Gears of War’ games, Epic Games was mostly known for the Unreal Engine. This was not a game, but rather a Game Engine that Developers could use in order to develop games easier. I’ve used Game Engines before, mostly Unity. I have played around with Unreal Engine as well but long story short, Unity was originally aimed at Mobile Games whilst Unreal Engine was pretty much the most popular and advanced Engine for AAA Open-World games for PC and Console. Developers have been using Unreal Engine since it came out in 2001. Games such as the Tom Clancy series, the Batman Arkham Series, Borderlands, Fable, the Mass Effect series, Medal of Honor, the recent Mortal Kombat games, Darksiders and dozens more were all made using Epic Games’ Unreal Engine.

Fortnite isn’t the only game that Epic are known for.

Fortnite isn’t the only game that Epic are known for.

But then in 2017, something happened. Epic Games had this game called Fortnite in the works and at that time, it was just a Co-Op RPG Shooter. But after Epic saw how successful PUBG’s Battle Royale mode was, they decided to add the Battle Royale mode in Fortnite as well. They released the game with the ‘Save the World’ beta, which was the original Fortnite game-mode and was only released as a full game three years later, in June 2020. 

Fun Fact, the Battle Royale mode in Fortnite was so simple to make, that it took Epic Games just two months to build it, whereas ‘Save the World’ was in development for many years prior to 2017. As you all probably know, Fortnite ended up being a world-wide success and overtook PUBG quite quickly. The main reason for it being so successful was that you could play it on literally any platform from PlayStation, to Xbox, to PC, Mac and even iOS and Android, Fortnite was basically everywhere. 

Unfortunately, it wasn’t going that well for PUBG, who tried to sue Epic Games for copying their Battle Royal idea. However, it was actually Minecraft that first introduced the Battle Royale genre with a mod, followed by an ARMA 2 mod in DayZ. Fun fact again, there was a Japanese movie called ‘Battle Royale’ from 2000, based on the 1999 novel by Koushun Takami, which was the very first to introduce the Battle Royale concept. This was even before ‘Hunger Games’. 

Anyway, I hope that this gives you a bit more of an insight into Epic Games as a company. They’re really more like a Game Engine company that then became massive thanks to Fortnite. Earlier this month, they launched a silent update to Fortnite on iOS where they purposely introduced a direct payment system. This meant that users could pay Epic Games directly, rather than the money going through Apple first, which would take a 30% cut. I’ll cover why Apple takes that 30% cut when I’m covering Apple’s side but essentially, Epic Games were not ok with Apple taking a 30% cut of their revenue, so they wanted to avoid paying it. Makes sense, right? 30% is quite significant.

Unfortunately, avoiding the 30% cut was against Apple’s App Store policies, so Apple took down Fortnite until they fixed the issue and as soon as Apple did that, Epic Games had a massive lawsuit ready and they sued Apple and even released a full-on anti Apple video. They even held a ‘#FreeFortnite’ tournament where you could get this ‘Evil Apple’ skin.

Epic knew that this would get them banned, so what’s their angle?

Epic knew that this would get them banned, so what’s their angle?

They had all of this ready on the spot, so it was pretty clear that they’ve been preparing for this for a while now and intentionally wanted to get banned in an attempt to get Apple to decrease, or even drop that 30% fee entirely. That makes sense. Fortnite made $1.8 billion in 2019, which makes it the most successful game of 2019 and also one of the most successful Video Games in history. Epic Games doesn’t share how many players they have on iOS, but if we estimate this as 10% of the total player-base, Apple would’ve taken $54 million in commission, and I’m pretty sure iOS, macOS and the iPadOS player-base is quite a bit larger than 10%. This is why Epic Games wants that commission to be decreased or even dropped, they want more profit. But according to them, the users would also benefit by the fact that the prices would be lowered.

When Epic Games introduced the direct payment method in Fortnite, the prices were $2 less, however Epic was still charging $1 more than the revenue that they were making after Apple’s cut. So they were still making more money this way than by going the Apple route. Tim Sweeney, the CEO, Founder and Prime Shareholder of Epic Games, actually sent an email to Tim Cook, Phil Schiller, Craig Federeighi and Matt on June 30th, telling them that Epic is unable to provide consumers with certain features in their iOS Apps. They requested the following:

1. Allow Epic Games to have a direct payment method, without Apple taking that 30% cut.

2. Allow Epic Games to launch their own Epic Games Store App on iOS, to compete with Apple’s own App Store.

Those are some big requests, but I do see where Epic are coming from. They say that there are no other options on iOS for Game Developers other than going through Apple’s system. Epic are calling Apple a monopoly and they want others to be able to compete with Apple’s own App Store, on Apple’s own devices. Epic Games stated that on Android you can side-load Apps, so you can have a separate store that competes with Google’s own PlayStore, which Epic Games does actually have. On iOS, you cannot have another store, other than the App Store.

On August 13th, the day Fortnite launched the new direct payment method, Tim Sweeney emailed Apple again, basically making them aware that they will be launching the update today and if they do get their game blocked, they will follow the legal path in getting this resolved. So, this is pretty much what Epic wants. This is their side of the story. 

Apple’s Side 

What’s Apple’s perspective on this? Well, Apple does indeed take 30% as a commission, but they do take this from every single Developer on the AppStore. Apple’s argument is that they created the iPhone, they created iOS and they also created the App Store, the world’s very first global App Store on a mobile device. For that 30% cut, Apple is giving Developers:

Apple announced the App Sore back in 2008, the first of its kind and now worth over $50 Billion a year (Source: Apple)

Apple announced the App Sore back in 2008, the first of its kind and now worth over $50 Billion a year (Source: Apple)

  • Exposure to literally billions of Apple users.

  • Hosting services on Apple’s store.

  • Tools to build their App, with Xcode. 

  • A programming language (Swift) that Developers can use. 

  • Access to thousands of guides, tutorials and help.

  • WWDC - an entire week full of workshops for Developers so that they can update their Apps and get it ready for when the new version of iOS gets released. 

On top of that, Apple manually verifies every App that goes onto the App Store for not just Malware, but also Performance issues and UI Design. They need to make sure that everything is consistent and high quality. For everything that Apple does, they feel like they deserve that 30% cut. It would not be fair for Apple to have to fund the AppStore through AirPods sales rather than AppStore revenue directly. When it comes to Epic’s second request, releasing a competing App Store, Apple’s argument is that they built the iPhone as well as iOS and in order to maintain that high quality and security that they praise themselves for, they need this to be their system. This is the reason why we only have Apple’s AppStore on iOS.

My Thoughts

So, what are my thoughts on all this? When it comes to that 30% commission, Epic Games’s first issue, I’m sort of in the middle. I don’t agree with Epic, where they basically want this fee removed as Apple’s clearly providing a ton in return for that 30% commission. But at the same time, I don’t agree with Apple either here as 30% is quite a large chunk.

Initially, that 30% cut was only there in order to help Apple run the servers. But in 2008, Apple was only worth $75 Billion. Today, they are worth more than $2 Trillion! Fun Fact, Apple’s entire AppStore in 2019 alone made over $50 Billion in revenue. So in a single year, that 30% commission that Apple takes made them almost as much money as Apple was worth back in 2008, when the App Store was launched. Does Apple need that $50 billion, when they have $2 Trillion? Probably not. 

Apple are by no means the only ones charging 30%, but a change from them may trigger a drop industry-wide.

Apple are by no means the only ones charging 30%, but a change from them may trigger a drop industry-wide.

However, I’m not saying that Apple should drop the commission entirely, as they still deserve to charge some sort of commission from Developers, but I do think that 30% is far too much. I would say that 15% would be fair and anything lower would deeply benefit the Developers and to some extent, the customers as well. Now, the thing is, Apple isn’t the only one taking a commission. Google also takes a commission, the Playstation Store is also taking one, the Xbox Games Store, the Samsung Galaxy Store, the Nintendo eShop, Steam has one as well and even physical stores such as GameStop, Amazon, BestBuy and Walmart, they all take a commission if you want to sell your product through them. Take a guess what percentage all of these companies charge, as commission? That’s right, 30%.

They all charge 30%. Likely because of Apple being the very first, but the idea here is that no matter where you sell your product, you do pay a 30% commission, with only two exceptions. The first one being the Microsoft Store on Windows, which has recently dropped the commission to only 5%, then there’s the Epic Games Store, which is charging 12%. Other than that, everyone’s at 30%.

I do hope that Apple drops this to 15% or so as that way, all the other Stores will likely follow suit and drop the commission as well, in order to stay competitive. Interestingly enough, YouTube actually takes a 45% commission, which I do think is gigantic. But, I am happy to give YouTube that big of a share because without YouTube, I wouldn’t even have that income in the first place. It’s the same thing with the commission that these stores charge. Without any of these stores, you wouldn’t have any audience and if you do, your audience would be a fraction of what it could otherwise be. 

Epic isn’t only going after Apple, this is all part of a much wider mission (Source: The Verge).

Epic isn’t only going after Apple, this is all part of a much wider mission (Source: The Verge).

Something that I do want to mention here, regarding the commission, is that there are a few stores that do make some exceptions. Samsung’s Galaxy App Store does take a 30% commission, but you can actually cut a deal with Samsung if you’re big enough. There are some reports that Epic Games has a 0% commission deal with Samsung, which I think is pretty messed up considering that you need to be big to strike a deal. Speaking of that, apparently Apple struck a deal with Amazon where Apple was not taking the 30% commission on movies bought by users who already had an Amazon Prime Membership. Only new Prime Members would trigger Apple’s 30% commission. I think that’s messed up, no store should make any exceptions whatsoever. 

When it comes to Epic’s second request, their own Epic Games Store on iOS, I personally don’t agree with that at all. It’s Apple’s own platform, why would they allow a competing store on it. Not even to mention the fact that this will affect the quality and security of the Apps available. Playstation doesn’t have an alternative to the PlayStation Store, Xbox doesn’t have an alternative to Microsoft’s Xbox Store either, so why should iOS have one? Epic’s argument here is that you can indeed install a third-party store on Android but you cannot do it on iOS at all.

But even with that argument, side-loading isn’t something that the average user would do. Epic already has a Game-Store on Android and then they decided to go on the PlayStore, but not before suing Google as well, in order to avoid Google’s 30% cut. Obviously that lawsuit didn’t go anywhere and they just gave up and stayed on the PlayStore in the end. Now, one counter argument to this would be: why do we have the Epic Game Store on macOS, but not iOS? MacOS doesn’t have as many limitations as iOS does but at the same time, take a look at the quality of Apps in the Epic Games Store or Stream for Mac, compared to the Apps that we get in the App Store.

The App Store games use metal, they run very smooth, they’re very well optimised, whereas Fortnite on Mac for example, even if you have a very powerful Mac that can play it well on Windows, on macOS on the same exact hardware, it has random freezes and many frame-drops that can make it unplayable. Still, Apple made the entire platform, from the hardware to the software, and if they don’t want to compromise on the quality and security of their App Library, I do support that entirely.

Present

Now that I’ve covered both sides as well as my own thoughts, what is the status of all this, as of right now? Shortly after Fortnite got banned by Apple, guess what? Google banned it too, Fortnite had implemented the direct payment method on the PlayStore as well.

Epic Games basically had a lawsuit ready for Google, just minutes after the ban. Everything was carefully planned. But they haven’t targeted Google as much as they have with Apple. This is mostly because they do have their own third-party store on Android, it’s far more difficult to access, when compared to Google’s own PlayStore.

This dispute and very quickly, and very publicly turned sour and it’s the Players & Developers who are currently being affected the most.

This dispute and very quickly, and very publicly turned sour and it’s the Players & Developers who are currently being affected the most.

Apple then gave Epic Games a deadline, August 27th, to release an update to their game to fix the direct payment issue. Otherwise, Apple would close Epic Games’s Developer Account, essentially taking all of their Games and products off the App Store. Luckily, Epic doesn’t have loads of Games. It’s just Fortnite and Infinity Blade but they do have the Unreal Engine, if you remember that from earlier in the video. What this ban meant, was that Apple was planning to revoke Epic’s Unreal Engine License on Apple products, meaning that no Developer could use Unreal Engine at all. So, all the games that I’ve listed before, would be banned on any Apple device (Mac, iPhone & iPad) and third-party Developers would be banned from updating and developing new Games using the Unreal Engine. This was really messed up and I was very against this from the moment I heard about it. These Developers shouldn’t be affected by Apple and Epic’s dispute at all.

Anyway, Apple and Epic had a court hearing and the judge basically ruled the Unreal Engine ban to be completely unfair so they forbid Apple from doing it, but they did give Apple the green-light to keep Fortnite off their platform if Fortnite doesn’t want to follow Apple’s rules and pay that 30% cut. The lawsuit is still ongoing and it looks like it might take a few years to get it fully sorted. 

In the meantime, Epic Games released a few more anti-Apple videos, just mocking Apple and trying to rally their Fortnite community against them. I think that’s messed up and completely unprofessional, so I’m not ok with mockery of any sorts. Apple’s keeping Fortnite blocked until Epic updates the Game. It’s good that Apple are still leaving that door open for Epic to return, when they want. The game is still playable if you have it installed, but you would not be able to download it again if you do not have it installed. If you open up the game, you’ll notice that all the in-app purchases are gone, the Battle-Pass is gone and the game is stuck to the pre-Season 4 update. Also, Apple has now started promoting PUBG on the front page of the App Store, probably in response to Epic mocking Apple so much.

In the end, it really does suck that the player-base is really the one affected the most here. Epic Games could stop this at any time they want really. But, I don’t think they will. I think they’re going to keep this going just to paint Apple in a bad way and if Apple drops the commission, that would be great as other stores will drop it as well. If they don’t, then Epic Games made a massive mistake as they will likely be losing hundreds of millions of dollars over the years.