Epic tried — and failed — to weaponize its user base against Apple

Apple epic weaponize user baseIf Tim Sweeney thought 350 million Fortnite players could bend Apple—and U.S. antitrust laws—to his will, he was wrong.

A court order last week denied Epic’s motion to force Apple to reinstate Fortnite on the App Store. On Friday, Apple removed the rest of Epic’s games, but did not—per the same court order—terminate the Epic account associated with its Unreal Engine.

From Apple:

We are disappointed that we have had to terminate the Epic Games account on the App Store. We have worked with the team at Epic Games for many years on their launches and releases. The court recommended that Epic comply with the App Store guidelines while their case moves forward, guidelines they’ve followed for the past decade until they created this situation. Epic has refused. Instead they repeatedly submit Fortnite updates designed to violate the guidelines of the App Store. This is not fair to all other developers on the App Store and is putting customers in the middle of their fight. We hope that we can work together again in the future, but unfortunately that is not possible today.

From Epic:

Apple is asking that Epic revert Fortnite to exclusively use Apple payments. Their proposal is an invitation for Epic to collude with Apple to maintain their monopoly over in-app payments on iOS, suppressing free market competition and inflating prices. As a matter of principle, we won’t participate in this scheme.

My take: Sweeney is living in la-la land. The judge didn’t buy his theory of the case and neither will anyone in Congress—not even trustbusting David Cicilline.

See also:

12 Comments

  1. David Emery said:
    Even in these times, blatant greed is not a good look…

    3
    August 29, 2020
  2. Bart Yee said:
    I simply suggest tha Apple boot Epic completely off iOS and state that we have no monopoly. Our users and customers can choose to switch over or purchase an extra Google Pixel w/Android, Samsung devices, Huawei, Xiaomi, Motorola, LG, Oppo, etc. device, any number of Non-US based devices using Android to play on. They can also purchase and play on Microsoft XBox, Sony PlayStation, Nintendo Switch, and any PC with Windows. There are many many platforms to play on and all combined relegate iOS and Apple devices to probably less than 35% of the total device market for Epic.

    If Epic does not wish to abide by the rules and contractural agreement it had complied with before, that is their choice and they are free to use other platforms which they can access. We wish them well in their future endeavors. We know our users will miss them.

    6
    August 29, 2020
  3. Gregg Thurman said:
    The mistake Epic made was believing that Epic’s relationship with its customers was stronger than the relationship these same customers had with Apple.

    Wrong.

    Those customers will miss Fortnite, but not as much as they will their iPad or iPhone and the ecosystem they probably subscribed to Fortnite in the first place.

    10
    August 29, 2020
  4. Bart Yee said:
    IMO, Epic needs Apple much more than Apple needs Epic. Apple can state exactly how much they project they will lose on the bottom line. Let’s say Epic has that 350M users and 150M are IOS users. @30%, if projections are $85/user annual spend, Apple loses $3.8B in services revenues, a significant drag on services revenue. Now would Epic report what they lose? 150M x 70% of that same $85 = $8.925B in revenue. Oh, they may gain back some with switchers, maybe $1B so let’s say Epic loses $8B annual revenue.that would be quite a lot to explain to his board.

    Perhaps my numbers are much too optimistic for revenue. The link in my next post discusses Epic revenue from 2018 and 2019, I have no understanding of 2019 and 2020 pandemic stats but suffice to say probably improved in last 6 months.

    2
    August 29, 2020
  5. Bart Yee said:
    Of course, not all players are brand new so Apple’s cut drops to only 15% while Epic’s take rises from 70 to 85% after year 1, a fact that Epic conveniently NEVER mentions, and is competitive with their own ask of 12% commission for any paying played game on the Epic Game Store.

    Here’s the link to one article dissecting potential Epic Fortnite revenues:

    https://www.businessofapps.com/data/fortnite-statistics/

    You’ll need to scroll down to get to the revenue section pointer. What do you think?

    2
    August 29, 2020
  6. Romeo A Esparrago Jr said:
    My son doesn’t play games on his iOS devices. He plays on his Nintendo Switch, Sony PS/3 and PS/4, and on his 2015 refurb MBP using a Windows emulator.

    Oh and he’s not interested in Fortnite.

    His take on this Epic-Apple thing :
    “Whatevs!”

    That’s one data point.

    6
    August 29, 2020
    • Fred Stein said:
      Great point, even just one data point. Thanks.

      Avid Fortnight on iOS players, can play it on their PCs or Mac in most cases. Or they can play thousand of other games on iOS.

      Almost none will switch to Android. But that just means someone else buys their used iPhone.

      4
      August 29, 2020
  7. Bart Yee said:
    Because I have a link, my comment above requires moderation and I don’t know if you’ll see it. Here is my other revenue comment without the link:

    Of course, not all players are brand new so Apple’s cut drops to only 15% while Epic’s take rises from 70 to 85% after year 1, a fact that Epic conveniently NEVER mentions, and is competitive with their own ask of 12% commission for any paying played game on the Epic Game Store.

    So if iOS players stay on longer than 1 year, they become Epic’s best iOS users in terms of continuing revenue. Then Apple makes LESS revenue from them, and Epic makes MORE! Again, never mentioned by Epic.

    5
    August 29, 2020
  8. Fred Stein said:
    The stock market didn’t buy this case either.

    Maybe because every individual or professional stock trader has bought bottled water at an airport, or suffered some other rip-off, with no recourse. That $2.50 bottle cost $.25 at Costco.

    3
    August 29, 2020
    • Bart Yee said:
      Exactly Fred! And did anyone notice that only specific companies can operate at said airport concessions by contract with the city or operating authority? And because the operation is far flung, unique, and operates at odd hours, the concessionaires set their prices and markups to levels that hopefully ensure their survival.

      On top of that, we travelers understand that those prices reflect the following built in:
      Convenience, reliability, SECURITY, curated vendors and products. If we didn’t like it, we could go to another airport (but with less choice of flights), take a train, bus, or drive ourselves. Shut out vendors can vie for my dollar but they don’t get to play at my preferred airport when I have to fly.

      0
      August 29, 2020
  9. John Konopka said:
    For a more nuanced view of this listen to John Gruber’s podcast featuring a developer, Anil Dash. It was interesting.

    Once claim he made, which I haven’t checked, is that the amount that Apple gets from selling apps is rather small. Perhaps much smaller than the $20B it gets from Google for making them the default search engine.

    His main take is that for developers, this is not so much about the money as about the control Apple maintains over what apps can be distributed. It is a good question. One example is that Adobe developed post script screen fonts to give us smooth type at any size. This required access to the system level of the OS. That was available on Mac OS back in the day. It couldn’t happen now with iOS.

    1
    August 29, 2020
  10. Kirk DeBernardi said:
    – quote–

    “ As a matter of principle, we won’t participate in this scheme.”

    — Tim Sweeney

    Glad he was able to solve his own problem.

    (As for rallying the gamers out there — it’s my bet most game players are mostly only passionate about one thing.)

    1
    August 30, 2020

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