Epic’s Apple lawsuit could have “significant and serious ramifications” for platform holders like Nintendo, a judge has warned.
After its battle royale juggernaut Fortnite was removed from the App Store in August for violating terms and conditions, Epic called out Apple for taking 30% of the cut from developers and declared war.
However, according to the latest court documents, published on Friday, Judge Yvonne Gonzales Rogers notes how it’s not all that distinct from console platforms that charge developers the same 30% fee.
“Indeed, Sony, Nintendo and Microsoft all operate similar walled gardens or closed platform models as Apple, whereby the hardware, operating system, digital marketplace, and IAPs are all exclusive to the platform owner”
Judge Rogers also mentioned how the Nintendo Switch, gaming laptops and tablets could have a “significant overlap” with the iOS platform due to their portable design.
“a final decision should be better informed regarding the impact of the walled garden model given the potential for significant and serious ramifications for Sony, Nintendo and Microsoft and their video game platforms.”
Epic’s case against Apple could go to jury trial as early as July next year. We will be sure to keep you up to date as it unfolds.
When he’s not paying off a loan to Tom Nook, Liam likes to report on the latest Nintendo news and admire his library of video games. His favourite Nintendo character used to be a guitar-playing dog, but nowadays he prefers to hang out with Judd the cat.
I don’t see any way Epic Games wins this battle. If you’re using someone’s operating system to deliver games to the consumer, it’s only natural they’re asking a percentage of the profits. I agree 30% is way too much though. 10-15% would be more fair.
Apple are not totally blameless here, they have lots of other micro transaction heavy games on their platform, it just seems they have singled out a very popular one.
@johnvboy Hold up there, Epic started this whole kerfuffle by taking payments outside of the App-store, circumventing Apple, and i’m pretty sure that in the agreement Epic signed to get Fortnite on there, they have a clause calling that sort of thing “Bad form”
@BenAV Epic create content, Apple don’t. As a gamer, supporting Apple is nonsense. Content creators should have as much right as possible on their creation over big wallet companies. And Nintendo is one of the most respectful company over creator’s rights.
@RasandeRose yeah, because there aren’t enough server-crutched freemiums dropping dead with few prospects of tape circulation as it is. Fortnite will most likely follow suit someday as well, but there’s no point in or excuse to wishing it sooner.
Apple creates the platform, the tools and the hardware that allows Epic to exist on that market.
Without Apple there wouldn’t be an Epic.
To develop on an Apple device you need to be a part of the Developer program. This program costs $ 99 / year and members are bound by a NDA agreement. This agreement states what you can and can’t do with an app you release onto the Apple platform. For that price you get access to beta software of iOS, iPad OS and macOS, you get access to iTunes Connect, you can create digital signatures for app distribution and testing, when you submit an app for review Apple will test your app and give you their response. If all is okay, you are allowed to publish your app to the App Store.
With this, Apple will host your software on their servers. They will also list it on their store. If you have iAP purchases or a paid App, they will also pay you your earnings. They will also handle all transactions. And for this, they ask an industry standard (ALL other App Stores (except the Epic Game Store) ask the same price) 30% fee.
If they had to take away that 30% fee, I’d think that 99 year price would go up to 1000 / year. Which would hurt small developers.
I think the biggest thing here is iOS devices are meant to be full blown computers where comedies are very specific gaming devices so I think that line should be understood. However, if it forced consoles to allow third party software on them I’d be totally down with that if I’m being honest. I bet much doubt anyone is going too make a third party app store on the Switch except maybe a homebrew store.
@Rexenoboy Apple made 360 milllion over the time Fortnite was on the store, if I was Epic I would pissed to be left with a measly 840 million as well.
@sanderev there definitely would. It’s just that Apple creates a hardware environment – one of a good few, no monopoly – that Epic feels sufficiently compelled to be present in. No matter how draconian the fees are, when a publisher arrives to pay them, you’ll be excused for assuming they already account for it and view the environment’s userbase as a source of viable profit in spite of the fees. Which is why the subject of Epic’s claims here sounds kinda post-factumish (unless I’m unaware of them having got on board before a significant fee raise on Apple’s side).
I just can’t bring myself to support either party in this feud. Unless you are really invested in lining Tim Sweeney’s pockets further. Any year this would be a dumb cause to support, but in 2020? Both companies can go to that place below with the fire and horned creatures.
@johnvboy Apple never singled anyone out. Epic started advertising V-bucks with a discount if purchased directly on the Epic website to avoid paying a 30% fee to Apple. So they got banned since they broke their contract with Apple. Same thing happened on Google Play.
In the end Epic just wants a bigger slice of the pie. They want all the benefits of a platform, but they don’t want to pay for it. They want access to Apple’s userbase, they want Apple to host the games on their service and stores, they want access to their development kits; and then they try to circumvent their payment system by offering users to buy MTX outside of the Apple Store.
That’s not how it works. You can argue for a better deal, but argue with Apple, don’t use the gaming community as your patrons to fight a war; a war between two conglomerates that don’t care about you, the end user, at all. I’m not a fan of Apple, but I don’t see how they are in the wrong here.
@johnvboy They didn’t single out Epic. Epic wrote them a letter confirming their intention to breach their terms of service.
@Octane Indeed. They act like a “small developer vs the big bad Apple”. But Epic is partly owned by Tencent, one of the biggest tech companies in China. Epic is anything but “a small developer”. And I think this is Tencent’s way to fight Trump’s ban on WeChat.
I been saying this since the start of this whole ordeal: There is no way Epic wins against Apple without completely destroying the business model all consoles need to exist at all.
@Octane prity mutch what iv been trying to say to some ppl ik who don’t get it… like Epic clames its a “Walled Garden” .. yes… its there platform and there store? Your point being.. what exactly? I’m prity sure Epic would be pissed if say Nintendo as a example went onto the EPIC store and payed f all to them…
I don’t think there’s any reality where Epic wins this. Usually there’s a grey area in things like this but they are observably in the wrong here in every facet. This latest development just cements this further
@sanderev I’m not sure about that, that’s a bit of a stretch. When money is involved, the reason doesn’t need to be that complicated..!
@Volmun The irony is that they pay publishers for exclusivity on the Epic Store, and now they’re complaining about “walled gardens”.
I wonder which is more valuable to Apple the US market on micro transactions. I suspect it’s micro transactions and so if epic wins the result will be Apple and other platform holders affected pulling out of the US. US enthusiasts will probably just import from Canada and Mexico instead if that happens.
Epic wanted to be on the Apple store, so they entered into a contract with Apple, which featured terms and conditions which were stated and understood in advance. Now Epic wishes to remain on the Apple store, whilst breaching the terms of the contract. Now Apple is saying “No… if you wish to use our services, you have to abide by our rules.” Epic basically signed the contract, agreed to the conditions, and then disagreed afterwards. It doesn’t work like that. If you sign a contract, you’re agreeing to it, and are also agreeing to abide by it.
4,2 billions/year in revenue for free to play and for 700 employees. I will not support this toxic system I will never care about billionaires fighting each other over even a larger piece of cake.
@Octane haha yep… not only that though there’s been sevral cases where thay have (more or less) bullied Indi devs into being exclucive to there Store front cant recall the games/devs inpaticular atm but still THATS a shady busness strategy..
Hang on, I never stated Epic were blameless in all this, just pointed out that Apple have some dodgy practices too.
I desparately want Epic to win this case. I live for the day when I don’t have to hack my switch to run emulators on it, and Epic winning is the only way that I could see that happening.
Looks like that’s the end of games consoles then! It was nice while it lasted :/
@Octane I agree that it’s a stretch. However, I just connected a few dots I saw.
1. Tencent is going to lose a lot of money if Trump actually bans WeChat.
2. Apple is a very American company, with an easy to violate policy.
3. Fortnite is really big in the US.
4. Tencent owns Fortnite.
@Friscobay Epic winning would most likely mean that Nintendo would be forced to open the Switch up to non-approved devs, allowing emulators to be ran on non-hacked Switches.
@alexybubble And the only option is to give even more money to 4,2 billion dollars company employing 700 people ?
@Friscobay I don’t care about Epic or Apple or how much money goes to whomever. I only care about the ramifications towards Nintendo.
@sanderev Well, Tencent doesn’t “own” Epic or Fortnite (yet). I think there are way more effective ways to oppose a potential WeChat ban; various sanctions are plausible for example. Taking Apple to court over a potential increased royalty share doesn’t really make sense IMO. I wouldn’t read too much into that. Things can happen without China’s involvement
I don’t care about Epic’s Fornite or their other games but for the sake of online stores I hope they win. 30% tax going to Google, Sony, Nintendo, Steam, Apple etc. is too high.
An online digital storefront in an ecosystem is going to cost you money to sell in same as if I hire a building to open a shop to sell products in. It’s the price you pay to reach billions of customers in an instant. Epic knew the t&c’s when they signed up years ago. Why’s it an issue all of a sudden now?
They acted like spoilt kids when they bypassed Apple and Google’s pay terms and now feel butthurt as they’re games no longer on sale. They can only blame themselves.
If they hadn’t done that they would still be gaining 70% of revenue. Surely that’s better than 0% they’re now getting! Their greed has cost them big time which is ironic in itself.
@BrintaPap Apple could get out of this by allowing people to directly install .ipa files on their devices, so devs don’t have to use the Apple Store.
Apple would disable it by default and hide the option behind a couple of scary warnings, and they’d be good. Or do like Android and make you skim blindly through your settings to find where they’ve hidden the option to install .apk from the web in this version.
Because that is what happened with Microsoft and IE, nothing else. My point being, Epic will lose this one because they’re greedy *****, but yes, a case can be made against Apple and their monopoly on apps.
@johnvboy Apple/google haven’t “singled out” anyone. This was epic that started this by circumventing their terms and conditions to which epic had previously agreed.
@Switcheroot the same case can be made against Sony, Xbox store, Nintendo’s online gamestore etc because they have a monopoly over there. Physical? Yeah you can buy them at many different stores (whether it’s online or in the shop itself).
1. Apple/Sony/Microsoft/Nintendo/do have a monopoly on the iOS/Playstation/Xbox/Switch platform, the AppStore/PS store/Xbox game Store/eShop is the only allowed store.2. With their own games/services they have a huge advantage over other game publishers.
Yeah I like Nintendo and Apple and other brands and stuff but that does not mean that everything they do is good for the consumer.
But here is kicker Microsoft did that but they have not done it for Xbox!! That’s how hypocrite this is.
My local Walmart has a monopoly because they won’t let me set up a stall inside.
The way this is going, I almost expect Steam to be accused of having a monopoly on Windows, just because it’s the most popular platform on PC.
Honestly though, it’d be good if the various companies took smaller cuts, but they all do it, though I did wonder how long it would be until it spilled over into console territory. After all, consoles being “walled gardens” is entirely the point.
@Eel that’s both hilarious and probably one of the most apt analogies I’ve seen yet.
@okeribok WOW. You really don’t know how the world works, do you? Yikes. Enjoy your fantasy.
If Microsoft is already getting involved and taking Epic’s side in this lawsuit, I think it’s safe to say that Nintendo (and Sony) would probably not join into this.
The judge’s comparison of mobile to console may very well just be a way of shooting down one of Epic’s argument points against Apple (and Google).
That being said, it’s probably safe to say that because Fortnite is still available on consoles, Nintendo and Sony aren’t too concerned on that field.
Epic forgets that their 30% effectively pays for hosting, dev access, development and security of API’s, financing, the testing process (that might highlight bugs the devs missed) and the review process. As well as this if your app is a success your effectively getting a ton of advertising from the App Store in the process. There is also the servers and wages of App Store employees to factor in as well.
Epic does have a slight chance against Apple but not against Google. With Android they can just offer people to download the .apk file outside of the PlayStore and done. At most they could argue that Android branding apps outside the PlayStore as “unsafe” is not fair for 3rd party apps.
It’s true that some practises Apple has are questionable (why is apps like XCloud not allowed on the iOS AppStore for example?). And you could argue cuts for the platform holders are kinda high (and not only with Apple).
But saying that Apple should allow Fornite to appear in their AppStore and have access to all their tools and audience without a cut does not feel fair either.
@Eel Walmart has competitors. If you don’t like that go to Home Depot or Amazon or Costco or Lowe’s etcetera. Now on PC where do you game if you want to play a game? Steam, EA Play, GoG, Ubisoft play store, Green man Gaming, Amazon etc.
Now on consoles where do you go for digita games? Digital codes on a giftcard are gone in Europe. So you can’t buy them in (game) stores anymore. You are only left with the eshop and it’s prices.
I don’t see a problem with platform holder lowering the % they take from a digital sale. Or even better a store being opened from a competitor on their online platform.
Here’s an idea: don’t like the App Store rules, fees & policies – don’t make an app!
Microsoft is going this route with XCloud. They don’t like/want to abide by the App Store rules so they will simply let you access XCloud through Safari. No 30% cut needed or App Store guidelines to follow.
Epic (and any other developer) can do the same – but they don’t. And do you know why they don’t?
Because of the value of having your app on the App Store brings – Apple generated $25.5 billion in the last 6 months of 2019 compared to $14.2 billion dollars on the Google Play store and that with less the a 3rd of the amount of downloads as Google Play.
So if you want EASY access to a consumer base that spends & spends a lot: create an app for the App Store, if you prefer not to deal with that & are willing to forgo the $, then the consumer can access via a web browser on their phone & you can keep all the profits.
I think we need to realize being available on iPhone & available in the App Store are two different things and are not mutually exclusive.
@BrintaPap unless the game you want is a first party or otherwise exclusive to one specific console, you will most likely be able to find it elsewhere.
I hate Apple, but honestly, Epic is in the wrong here, and I hope Apple wins this case.
Epic needs to lose this bad. It doesn’t matter what anyone thinks about the store practices of Apple or anyone else, they absolutely have the right to run their companies this way. They are under no obligation to allow anyone on their store, and are fully in their right to set what terms must be agreed upon to be in their store.
The App Store is no different than something like steam. All that happened is apple released their own hardware to accompany the store.
Kudos to Epic for making so many people think, Apple is the bad guy here . Like seriously, they don’t even have to justify themselves, people play right into their hands.
I think that in arguing the App Store is an effective monopoly Epic will be probably be vindicated. I think it meets that definition by most scores and some of their policies are open to legal query – especially if the App store is seen as a monopoly.
However, I think that everyone needs to be realistic about what the outcome is likely to be. @alexybubble talks about the idea that Nintendo (and Apple/Sony/Microsoft) will effectively be forced to allow installation of a “homebrew” channel (so we can all play “legitimate homebrew” – without hacking our consoles). I don’t see this as remotely likely.
It isn’t a case of the current status quo versus a free for all. If Apple are found to be running a monopoly they could get around this by allowing 2-3 rival stores to open on iOS. They could even have a bidding process for companies who want to operate a store front. Any storefront would itself have to abide by a set of very stringent rules (to prevent outright piracy and criminal use).
The end result would likely be a very slight lowering of fees and a very slight liberalisation of the rules but… most people wouldn’t notice a thing and most companies wouldn’t benefit at all.
Another thing that could happen (that I expect is more likely to happen, either as an alternative legal compromise to rival stores or possibly alongside them) is that companies like Epic (and Microsoft with GamePass) say that you need to pay a one off fixed cost or a monthly premium on top of your regular subscription to enable the content you pay for elsewhere to be played on iOS. Apple sets a minimum premium, the publisher pays Apple a cut for that premium but Apple loses the rights to claim a full cut for all other micro-transactions/the full value of the subscription.
I was selected a few weeks ago for a jury trial on a assault case that lasted 4 days. As much as I hate jury duty (my 3rd case in 5 calls and I’m 36! So annoying!) I wouldn’t mind being selected for this trial. Would be very interesting to see how the attorneys select the jury on this one. Between young people that play Fortnite and older people who’s kids that play it too much…would be a challenge to find the juror in each of their favors.
I’m kinda salty that people want Epic to suffer, Fortnite is a very WELL created game with great amounts of content. Sure, they may have been a bit greedy but that goes for both sides.
@StuTwo the monopoly argument is blown up by android phones. It would be like arguing a store has a monopoly over what’s in their particular store, ignoring all the competing stores.
@DAHstroy epic has been involved in blatant breeches of contract on numerous accounts not just here but in their other practices. They’re now trying to argue in court that they should be allowed to break any rule or agreement they want with no consequences.
@Yorumi I hear you bro, but if you think other companies aren’t doing the same thing, you’re wrong.
@Rexenoboy MS doesn’t take a cut on PC though, and if you self published all the money is yours.
@alexybubble They will never be able to force Nintendo to allow unassigned code to run on their OS as it opens up far too many doors for hackers and other nefarious things to happen to people.
@Jokerwolf Tell me, how is what Apple is doing any different from what Nintendo, Sony or Xbox is doing on their platforms? Why is it OK for Nintendo to take 30% of sales but not Apple?Microsoft Windows is an outlier but that doesn’t make it the rule. We should be happy Microsoft allows any shop on Windows at all aside from their own Microsoft Store, but we shouldn’t take it for granted.
@okeribok the US is basically half the console market. It’s not near half the gaming market, but globally that market has a lot more PC/Mobile share.
Its unlikely that Epic will win, but make no mistake, no console will survive if they can’t control the distribution and royalties on their closed ecosystems in the US.
Taking a 30% cut from all games and can’t improve discoverability on eshop? Do I have that right?
Although, nintendo did take the massive financial risk creating the console – maybe also a fair point?
At first glance, 30% sounds a bit high. Although, I’m not sure what fair is, so I’m not making judgment.
@Yorumi I understand what you’re saying but I’m not so sure I agree. Between Apple and Android there is clearly a duopoly but the Google Play store clearly takes its cues very directly from the App store (which is clearly dominant in terms of revenue).
@Rexenoboy I get what you’re saying but they’re never going to open up the OS to everybody to run unassigned code that just leads way too many people vulnerable to credit card attacks and a plethora of other things. I agree the 30% is really steep and needs to change but you can’t take control of their platform fully away from them when they’re the ones who created it.
@Jokerwolf It seems I had your first response to my comment wrong and we’re in agreement after all.
I just wanna know why Apple NEED 30% of what completely separate companies makeAnd why taking less would damage the company
All I know is that all these platform holders really need to stop taking as much as 30% from all the developers out there releasing games on their platforms that are making them frikin’ billions. Epic has proven without any shadow of a doubt that 12% is more than enough for any of these companies to still be making billions of profit on top of covering any and all expenses required to run these platforms, and anything more is just abusing the people who actually put all the time and energy and money into making these games only to give a huge chunk of their potential profit from sales to fatten the coffers of these excessively greedy platform holders. Again, an industry standard of the same 12% that Epic currently takes is where we should be at across all these platforms imo. And I think we should all be advocating for this, because if you’re advocating for all these companies taking 1/3 of every penny a developer ever makes on their platform, simply for acting as a host digital storefront, then you just don’t know what you’re talking about and are well and truly on the wrong side of this debate as far as I’m concerned–unless you own shares in one or more of these platform holders.
@Eel That’s gruesomeMicrotransactions are how devs make money on free games, how are the bigger companies so out of touch
Not a fan of Apple in the slightest (I find their products to be overhyped and overpriced), but I tilt my head at anyone trying to support Epic. It’s a simple case really: Epic wanted to circumvent the Apple TOS so that they kept 100% of the profits while using Apple’s platforms. Tim Sweeny isn’t doing this for the benefit of the gaming community, he’s doing it because he wants to make Epic more cash.
Tim Sweeney is scum because he tries to cover up unethical business practices as a moral cause for the good of the industry. Epic exclusives don’t add value to the Epic Store, they DEVALUE other platforms because most of the time they are titles that were going to come to all digital storefronts until Epic through cash their way. Same thing here; Tim Sweeny is basically arguing that he should be able to utilize the ios app freely and not pay Apple anything, and trying to spin that as some sort of white-knight motive. Epic is a wolf in sheep’s clothing.
@LilMuku @Eel 30% is what Apple negotiated with the music industry when they were trying to find a legal way to get music onto their iPods. It’s significantly predates iPhones and downloadable games.
Congress’s anti-trust committee also made recommendations that walled garden approaches should be opened up since they can stifle competitors from the platform … and Europe is potentially going to pass the Digital services Act which would also do the same thing. Honestly, this is going to happen somewhere at sometime, regardless of whether Epic wins its lawsuit. These device companies did it to themselves.
@johnvboy I don’t get how someone misunderstands the topic, yet still comments.
How have apple singled epic out?
@Rexenoboy Microsoft was sued in the early 90s for locking competitors out of windows. This really is the same thing.
However the courts are super corporatist now, so I don’t see them making the right choice here.
@RasandeRose and yet if Epic announced switch exclusive Nintendo themed skins you’d be first in line
1. Epic tried to cut Apple completely out of the loop with their new shop option, so that completely negates any mention of 12% when they tried to offer Apple 0.
2. Of course they can decide to take the 12% they’re the underdog in this story. Who would let Epic take 30% of their profits when their install base is minuscule compared to a company like steam? You can’t give a company props for charging less for a lesser product.
It’s a bit far in the future for this case to give Nintendo problems, but whenever the others change or evolve their business models, Nintendo eventually has to follow.
@StuTwo the biggest problem is to take away this right from a company is to effectively tell them as soon as they release hardware or an OS they lose all control over it. They effectively have no ownership over what they made.
My biggest beef is people never want to take responsibility for their own actions. I’m not fussing at you it’s just no one has a right to a smartphone, no one has a right to sell their stuff on any device they don’t own. If people don’t like it they could make their own phone and is with a store. Oh but that’s too hard. Yeah exactly, apple worked hard for what they have. Everyone else comes along and thinks they deserve a piece of their labor without earning it.
If you want to enter the walled garden, you need permission and to follow the rules of the garden. It’s not the same as a monopoly. Each electronic company created, owns, and operates their platform. Apple is completely within their rights to impose rules about payments and to set their own fees. Epic, after exploiting their partnership with PUBG in order to steal the code for their game, is now trying to exploit hardware companies in order to make even more money off of something they stole to begin with.
@WoomyNNYes It seems like this is something of an “industry standard” now, as it sounds like all platform holders charge the same 30% off the top amount for access to their platforms. And whether its too high or too low, its the companies property…so they can charge what they wish for access to it.
I’m gonna have to side with apple on this one. Epic had this all planned out, there’s no way that they could randomly create a video in less than two hours after this all started. Maybe people will stop playing fortnite and play other games lol.
I agree 30% is a little steep but also Apple provides the platform for you to release your software on. Don’t like it? Make your own hardware. Or release it on all platforms and give players incentives to spend on platforms that don’t take such a high percentage. Despite liking and owning Apple products I do agree they’re a little greedy but I’m not invested in either outcome here. I would however like to see game streaming service apps on iOS though. That’s probably Apple’s worst and most outdated App Store policy at the moment.
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