A storied history of shortchanging app developers amounted to a public quarrel on August 13th, when Apple removed Epic Games widely popular hit, Fortnite. In retaliation, Epic Games countered by suing Apple in federal court.
This is not the first time Apple has been under review for its App Store policies. In the past, European regulators along with Justice Department officials have investigated Apple and its App Store. As recently as last month, Apple CEO Tim Cook found himself interrogated by House lawmakers.
Expecting an App Store eviction, Fortnite introduced a direct-pay system to game creator Epic Games, instead of Apple or Google. Normally, tech conglomerates require that they handle all app payments to collect a 30 percent commission. This policy is what Epic Games would later fight against.
As expected, Apple responded by removing Fortnite from its App Store. Prompting Epic to file a seemingly months in the making class-action lawsuit against Apple. According to Epic, Apple capitalizing on an additional 30 percent of profit is violating antitrust laws by not allowing third-party developers to use its own payment system.
Despite no longer receiving updates, established players can continue playing Fortnite on their iPhone’s. As for new players, they will find the Fortnite app missing from the App Store.
For Google, the issue was a little more complex. Despite being removed from the Google Play Store, users can still download Fortnite on Epic’s website and third-party Android stores such as Samsung’s. Despite Epic filing suit against Google, this is a positive as much as it is a negative.
Despite banning Fortnite on their Play Store, Google’s open-sourced software may entice several iPhone gamers to gravitate over to Android devices
Epic released a public-relations crusade, presenting Apple as the traditionalist attempting to annihilate an upstarting company. In a matter of hours, #FreeFortnite became the top trend on Twitter. Epic consequently imitated Apple’s historic 1984 ad, where Apple themselves were combating the old guard in IBM. In a matter of hours, it became less cool to own an iPhone.
Facing a $2 trillion valuation, Apple now must fight one of its most worthwhile partners in Epic. Partially owned by internet giant, Tencent, Epic valued at 17 billion, is prepared to sacrifice millions in earnings against Apple.
Out of the 133 million times people have downloaded Fortnite on an Apple device, Apple has taken $360 million of the $1.2 billion of revenue earned by Epic. Since April, the app has been downloaded 11 million times on the Google Play Store, generating $10 million in revenue with a $3 million cut for Google.
Moving forward, it would be a dangerous paradigm for Apple to concede Epic Games. Apple’s 30 percent commission comes second only to the iPhone among Apple’s revenue.
Epic need not point far as their 2018 founded app store has generated 5-7 percent profit off the 12 percent commission they charge. Besides testing and distrusting third-party apps, Apple argues that since they created the platform that third-party apps run on, their 30 percent cut is fair. As for Epic, this lawsuit is more than just giving their players a better discount, it’s about making a fairer market for everyone. This was not an impulsive decision by their brass and we can expect more to come out in the coming days.
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