November 27, 2020

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Apple Looking to Nuke Epic’s Entire Developer Agreement, Including Unreal Engine, in Retaliation for ‘Fortnite’ Fiasco

Well, I’m sure we all remember the rapidly escalating drama between Apple and Epic Games...

Well, I’m sure we all remember the rapidly escalating drama between Apple and Epic Games from last week. In short, Epic implemented an alternate payment method into Fortnite on iOS allowing users to purchase the in-game currency V-Bucks directly through Epic at a 20% discount. This was in response to a long-held belief from Epic Games and specifically CEO Tim Sweeney that digital storefronts like the App Store take far too large of a cut of the profits (30%) and that their strict guidelines create a monopolistic position. The alternate payment method in Fortnite is a direct violation of App Store guidelines, which Epic was very aware of, and Apple within hours pulled the game from the App Store. Almost immediately Epic filed legal papers against Apple for doing that, and then shortly after debuted a video called “Nineteen-Eighty Fortnite”, a parody of Apple’s iconic “1984″ Super Bowl ad, inside of Fortnite itself. Epic rolled out the same update to Fortnite on Google Play, and Google followed suit later in the day by also pulling the game from their store. Since then other major tech companies like Facebook and Spotify have show support for Epic in this fight.

Now Apple is trying to throw its knockout punch by threatening to terminate all of Epic’s developer agreements and tools if they don’t provide a compliant copy of Fortnite without the alternate pay method by August 28th. To be clear, this goes well beyond Fortnite. Epic has one of the most popular free game engines in the entire industry with Unreal Engine and there are a multitude of games that use that engine on both iOS and macOS, including games in Apple’s own Apple Arcade. Locking out Epic from iOS and macOS developer tools means they would not be able to provide updates or support for Unreal Engine on those platforms anymore, and that will trickle down to any developer using Unreal Engine as well, whether they have any skin in this Epic vs Apple game or not.

Epic has filed for an injunction against the August 28th deadline as they claim that beyond anything to do with Fortnite Apple’s actions would be “catastrophic for the future of the separate Unreal Engine business. If the Unreal Engine can no longer support Apple platforms, the software developers that use it will be forced to use alternatives.” And yeah, Apple devices represent a huge part of the gaming market, so if you were going to choose between one that works on Apple and one that doesn’t, the choice is pretty much made for you. But really this does massive harm to those already using Unreal Engine for their games, as it’s entirely possible some of those developers won’t have the resources to just up and port their game to an entirely new engine on a whim.

It’s really hard to see any side of this whole fiasco that isn’t ugly. Yes, Epic very blatantly broke App Store guidelines which they originally agreed to in order to be on the App Store, so Apple punishing them seems entirely justified. But Apple also pulling in hundreds if not thousands of iOS and macOS developers into the line of fire as collateral damage in an effort to swing their weight around is even worse in my opinion. I’m sure Epic has very selfish reasons for wanting to break a hole in Apple’s Walled Garden, but their efforts can also create a situation that’s better for all developers in the future, and they’re really one of the only big companies in a position to pick a fight with someone like Apple. The App Store has been nothing short of groundbreaking in its relatively brief existence, but it also feels well overdue for a revamp in its ways, and this is the sort of thing that can affect positive changes for consumers and developers.

Smartphones aren’t newfangled devices anymore, they’re part of the everyday lives of billions of people. We don’t all need our hands held anymore and for those of us that choose to we should be able to use the devices we paid for in the ways that we want to. I’ve been loyal to Apple for almost 20 years now, and to iOS since its inception, and I’ve been fairly accepting of their strict positions about things over the years, even if I didn’t totally agree with them. But those decisions do pile up, and their refusal to approve Microsoft’s xCloud on iOS has been the straw to break the camel’s back for me, to the point that I went out and picked up an Android tablet last week. Honestly I’ve been enjoying learning a different mobile operating system and it’s really quite eye-opening to see all of the things that are possible with Android if you have the desire. New iPhones will surely come out this fall and for the first time ever I’m not sure if I’ll be first in line to get one or if I’ll just wait it out and look for other smartphone options that better suit my needs.

One thing that also shouldn’t be glossed over is just how important games like Fortnite are to Apple’s own bottom line. Sure, Apple are unparalleled in their ability to squeeze out massive amounts of profit on the hardware devices they make, but as hardware sales inevitably slow down, they’ve been making a huge push into the services market. Apple doesn’t break it down into specifics, but the “services” portion of their business brings in billions and billions of dollars a year, and the bulk of that is certainly not coming from Apple TV+ subscriptions or iCloud storage bundles. Apple’s 30% cut of ALL the money that flows through the App Store is a Golden Goose that they can’t afford to lose, and while Fortnite alone won’t put a major dent in those profits, if the government decides to crack down and require Apple to allow 3rd party app stores on iOS or change up how large a percentage they can take from app sales, it could very much have a huge effect on their revenue. And if Epic does get their day in court against Apple in the future, I don’t see things going Apple’s way given the climate with their recent antitrust inquiries. Today’s actions feel like Apple going straight for Epic’s throat to prevent that day in court from happening, and unfortunately a whole bunch of developers are being caught in the crossfire as well.

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