A little over a year ago, Fortnite uploaded a video to YouTube making their ‘fight’ against Apple known to the public (Fortnite, 2020). In short, the developer of Fortnite, Epic Games, does not agree with the 30% cut that Apple takes from in-app purchases, claiming that it is unnecessarily high. Secretly, Epic Games implemented an option to make in-app purchases directly via Epic instead of Apple, offering customers a reduced price for using this option. Since this violated the App Store’s guidelines, Apple removed Fortnite from its App Store (Leswing, 2021).
As you can guess, lawsuits followed, and on the 10th of September 2021, a verdict was reached.
Epic Games, who sued Apple for monopolistic behavior and breach of antitrust laws, were judged to be mostly in the wrong. Apple owns a market share of 55% in the mobile gaming market, and though that is high, it does not make you a monopoly, it simply makes you successful, is essentially what the judge ruled (Leswing, 2021).
Apple, who sued Epic Games for violating the App store’s guidelines, was judged to be in the right. Epic Games had been able to earn revenue through its direct purchasing system in Fortnite, even after Apple had removed the game from their App store, because customers could still play the game if it was already installed. The judge ruled that Epic Games needed to pay Apple the 30% commission over those earnings, which amounted to about 6 million dollars (Clover, 2021).
The only small victory for App developers comes in the form of a ruling that implies that Apple should allow App developers to be able to link to an external ‘storefront’, for example the company’s website, for purchases. However, direct in-app purchases will still not be allowed (Leswing, 2021).
Understandably, Epic Games disagrees with the court’s ruling, and has appealed the decision.
I can’t say I can pick a side. The platform that Apple has created with the App store brings tremendous value to developers, with millions of users getting immediate access to your product once you put it in the App store, allowing you to create revenue. It is only fair that Apple takes a cut of that revenue.
However, for small developers, 30% does seem like a lot, and could make it difficult to become profitable. Fortunately for them, Apple decided to cut the commission rate to 15% for developers that do not have annual sales of more than 1 million dollars on the App store (Leswing, 2020).
See, that’s the thing for me. Epic Games earns billions with Fortnite over all the different platforms on which it is offered (Gilbert, 2021). Its removal from the App store likely only caused a very small dent in its profitability. This ‘fight’ that Epic Games is picking with Apple, even insinuating that Apple’s practices are ‘1984’-like in the earlier referenced video, just sounds greedy to me.
What do you think? Is Epic Games’ fight justified, or is it a case of gold fever?
Sources
Clover, J. (2021, September 13). Epic Games Pays Apple $6 Million as Ordered by Court. Retrieved on 14-09-2021 from: https://www.macrumors.com/2021/09/13/epic-games-pays-apple-6-million/
Fortnite (2020, August 13). Nineteen Eighty-Fortnite [Video]. Youtube. https://www.youtube.com/watch?v=euiSHuaw6Q4
Leswing, K. (2020, November 18). Apple will cut App Store commissions by half to 15% for small app makers. Retrieved on 14-09-2021 from: https://www.cnbc.com/2020/11/18/apple-will-cut-app-store-fees-by-half-to-15percent-for-small-developers.html
Leswing, K. (2021, September 10). Apple can no longer force developers to use in-app purchasing, judge rules in Epic Games case. Retrieved on 14-09-2021 from: https://www.cnbc.com/2021/09/10/epic-games-v-apple-judge-reaches-decision-.html
Gilber, B. (2021, May 8). Apple and Epic Games are revealing a ton of industry secrets in court filings – form untold ‘billions’ in Fortnite profits to private email exchanges, these are the 5 juiciest bits. Retrieved on 14-09-2021 from: https://www.businessinsider.com/apple-fortnite-epic-games-lawsuit-secrets-revealed-2021-5?international=true&r=US&IR=T
