Succession Season Four: Apple vs. Epic

From Martin Peer’s “The Briefing September 22, 2021” mailed Wednesday to The Information ($) subscribers:

Apple’s legal battle with Tim Sweeney of Epic Games is turning into one of those off-putting television dramas where none of the characters are likable. Sweeney, in particular, is losing credibility by the day. After the court ruling on his antitrust case against Apple two weeks ago, he described the decision as a loss for developers and consumers and defiantly vowed not to return to the App Store unless Epic could offer its own in-app payments in its games. It turns out that a few days after making that statement, he was trying to get Apple to let him back in!..

Apple, not surprisingly, doesn’t feel merciful. The court backed Apple’s termination of its deal with Epic and, given Sweeney’s declaration about not returning, the company is now letting Sweeney twist in the wind. As the Epic CEO revealed on Twitter today, Apple told Epic it won’t consider reinstating Epic’s developer account until all appeals of the court ruling have been heard. As Sweeney said, that means “Fortnite will be blacklisted from the Apple ecosystem” for as long as five years.

In taking that stance, Apple comes off a little bit like the bully that, having successfully fought off a challenge to its authority, now grinds its foe’s body into the dirt with its foot. It’s not enough that Sweeney lost much of his battle to challenge the App Store rules: Apple wants Epic to suffer for years to come—in what could be read as a warning to anyone else thinking about challenging the iPhone maker’s rules.

While it’s hard to blame Apple for taking this position, given Sweeney’s needlessly provocative behavior, a smarter tactic might be to find a way to settle

My take: I read Apple’s position as “keep this in the courts and see where that gets you.”

15 Comments

  1. Gregg Thurman said:
    I think this is Peer’s second article on the subject. The first was just as critical of Apple as this one.

    What he fails to point out is that the court told Epic “Sorry Charlie, no can do”. Peers has turned a clear legal rebuff of Epic into a condemnation of Apple.

    It’s an opinion piece with nothing to substantiate his opinion.

    (At some point I see Epic’s BoD asking Sweeney to seek his fortunes elsewhere. I think a speaking tour titled “Don Quixote’s Quest” would be appropriate. He could take Peers with him to carry his bags).

    7
    September 23, 2021
  2. Jerry Doyle said:
    I suspect the success of Fortnite went to Sweeney’s head leaving him the impression that he could dictate his path onto others thoroughfares. I also suspect that Sweeney believed erroneously, that he could garner Fortnite’s fan base and public opinion behind his strategic move to dictate his chosen path. Once he started down that path using his swagger and his legal team instead of continuing negotiations with Apple, then he cemented himself into an adversarial role with the very entity with whom he needed to establish an appropriate linkage. There always are consequences to our actions. And there should be.

    I understand Apple’s action. I support those actions knowing that it may place Apple in a rather heavy-handed role of public perception. Then again, Apple’s position is that Sweeney continues the path of litigation showing no desire to establish that appropriate linkage of cooperativeness with the very entity he needs to establish a working relationship. Sorry Sweeney, there are consequences associated with our actions. When your legal challenges are over, well perhaps that may be the time for you to come back knocking on the door. By then, Fortnite fans most likely will have move on to something else.

    6
    September 23, 2021
    • Steven Philips said:
      Agree. But I would modify to say there SHOULD be consequences. These days it seems like there often are not.

      0
      September 23, 2021
  3. Michael Goldfeder said:
    Sweeney can have Epic restored to the App Store tomorrow if he dismisses his lawsuit with prejudice. He, and he alone controls the way back for Epic.

    Arrogance and litigation are destroying his company and he needs to look into the mirror, swallow his pride, and make a big boy decision. But he won’t. That’s all on him as he chose this path with his PR parody commercial and very large ego.

    Apple isn’t the Bully in this situation. Just another business enforcing a contract that the Federal District Court said was appropriate. The judge’s decision will stand on appeal and Sweeney’s attorneys ought to talk some sense to their client as his company will be going the way of the Buffalo without being on the App Store.

    5
    September 23, 2021
    • Timothy Smith said:
      What’s mine is mine. What’s yours is appealable.

      1
      September 23, 2021
    • Fred Stein said:
      Upvoted Michael. Also supporting other commenters.

      Sweeney is wasting the court’s time, which precious and UNFAIRLY allocated. Real victims and real offenders are out there. Many victims NEVER get their day in court.

      To make matters worse, the Judge explicitly ruled out retrying the same arguments. She saying, don’t waste the court’s time.

      3
      September 23, 2021
  4. Peter Kropf said:
    Unfortunately, for Sweeney, his mistake was listening to his alter-ego within Fortnight for a strategy that would work in “Reality”.

    1
    September 23, 2021
  5. Peter Kropf said:
    “…a smarter tactic might be to find a way to settle.”

    In fact, telling Epic that it couldn’t play until the case was finalized is //exactly// how lawyers negotiate towards a settlement.

    It’s clear to everyone, that all Epic needs to do is stop all appeals.

    Peer is playing with a few cards missing from his deck.

    2
    September 23, 2021
  6. Bart Yee said:
    The Court and Apple have already said Fortnite could return to the App Store with a rules compliant version but Sweeney would see that as capitulation. And in continuing his Appeals process, he keeps prodding Apple to enforce its already won decisions. Apple has won its right to stand pat and simply wait out any legal processes plus reiterate that App Store rules should apply to all developers and apps. That’s not bullying, that’s standing on case law and a legal decision in their favor.

    IMO, there is no pressure on Apple to “settle”, settle for what? Most all iOS Fortnite players have pinned the loss of Fortnite squarely on Sweeney, switching to Android isn’t a likely option (and oh yeah, Google banned Fortnite too), and they feel like Sweeney made them “pawns in the game of life”.

    Sweeney / Epic / Fortnite needs Apple a helluva lot more (70% more) than Apple needs them (30%). They can Tweet, grovel, piss and moan till they comply with the platform rules like everyone else. Otherwise, Good riddance!

    1
    September 23, 2021
    • Jerry Doyle said:
      @Bart Yee: “…. They can Tweet, grovel, piss and moan till they comply with the platform rules like everyone else. Otherwise, Good riddance!”

      Is that what they call “Schadenfreude?”

      0
      September 23, 2021
      • David Drinkwater said:
        Close, Jerry, but Schadenfreude is subtly different. It’s hard to explain, but since Apple is *involved* in the process, I think it rules out Schadenfreude.

        0
        September 23, 2021
      • Bart Yee said:
        @Jerry Maybe a little. I don’t wish ill on Epic the company, but when the CEO embarks on this kind of self-proclaimed “crusade” and loses 9 of 10 court decisions and decides to appeal, all the while depriving mobile players gameplay and a portion of his company’s profit, well he’s bringing this upon himself. That he decides to attack Apple first shows he wants the high profile and he got it. It’s his money to spend on legal fees, fines, and missed revenue. He could cut his losses and break it off. That Sweeney continues, well, I can’t look away from a slow moving train wreck.

        0
        September 24, 2021
  7. David Drinkwater said:
    Bart, respectfully I think your ratios are off.

    (Genuinely respectfully.)

    How many people play Epic games?
    How many people use iOS devices?

    Divide the above by the below and you understand the *real* ratio.

    Epic is a small piece of a dog turd on the bottom of Apple’s shoe after a ten mile Apple Watch running workout.

    Epic got nothin’.

    2
    September 23, 2021
    • Bart Yee said:
      @David you’re correct, I should have been clearer, I’m referring to the total revenue that iOS Fortnite creates and that Epic’s portion is 70% and Apple’s portion is 30%. By keeping Fortnite unavailable to iOS users, Sweeney forgoes that 70% revenue entirely and is doing the same for Android.

      Here’s what court docs suggested per The Verge,
      “Court documents reveal that PlayStation 4 generated 46.8 percent of Fortnite’s total revenues from March 2018 through July 2020, while Xbox One, the second-highest platform, generated 27.5 percent. iOS ranked fifth, with just 7 percent of total revenue. The remaining 18.7 percent would have been split between Android, Nintendo Switch, and PCs.

      IPHONE AND IPAD ACCOUNTED FOR JUST 5 TO 7 PERCENT OF EPIC’S FORTNITE REVENUE
      In 2020, iOS revenues were projected to be an even smaller piece of the pie: just 5.8 percent, compared to 24 percent for Xbox One and “almost 40 percent” for PlayStation 4”

      Business of Apps suggests Fortnite brought in about $5.4B total revenue and of that $700M mobile revenue in 2020 with the bulk on iOS before being pulled. If we suggest $560M annual iOS Fortnite revenue, then they pay Apple $168M for the 30% fee, while reaping ~$400M. This is paltry stuff compared to the $2.16B on PlayStation and $1.3B XBox gross revenue Epic made, less the (same) fees they pay to those platforms.

      Whether or not Epic would have grown mobile Fortnite vs just sitting fat on console gameplay in 2020-2021 is unknown since they decided to dump both iOS and Android app stores. But it is real money that Epic is not getting. They won’t go bankrupt without iOS so maybe Sweeney feels he doesn’t need Apple that much. Fine, Apple has already shown they don’t need Epic or Fortnite pretty much at all.

      0
      September 24, 2021

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