Fortnite parent Epic dares to block Apple’s game on iPhones

The company that owns Fortnite is giving Apple a face for your challenge: We will not follow the rules you set for your powerful App Store. And we dare you to do something about it.

It is a fascinating standoff between a highly profitable, highly valued gaming company and one of the most powerful companies in the world. The way it plays out could have implications for Apple, its tech rivals – and antitrust regulators.

Epic Games, the North Carolina-based developer behind Fortnite and other games, announced Thursday morning that players wishing to purchase Fortnite’s virtual currency will no longer have to purchase it through Apple’s App Store. Instead, they can buy it directly from Epic. The difference for players, however, is that Epic will pay them 20 percent less if they buy the coin from Epic instead of Apple.

It’s a small change that’s a big deal, because Apple has explicitly banned developers from promoting these types of endpoints around its powerful App Store. Instead, Apple wants developers to sell their digital goods on their market, where it takes a maximum cut of 30 percent for each purchase.

That position has caused developers long overdue, claiming that Apple’s compensation is too volatile and giving its home products a foothold over competitors by essentially selling Apple’s own goods with a much better profit margin. Apple sells its music service, for example, for $ 10 a month; if a competing music service sold subscriptions through Apple’s store for the same price, it would have to fork out as much as $ 3 of that to Apple.

That said, over time, some major players, including Netflix and Spotify, have stopped subscribing to their services from the Apple App Store. You can use Spotify and Netflix on Apple devices, but if you want to pay for it, you need to visit the websites of those companies. Spotify has also lodged a complaint with European anti-trust regulators, who are now investigating Apple’s policies.

Apple has also attracted the attention of U.S. lawmakers like Sen. Elizabeth Warren, who said the company “excludes competitors”. Last month, Apple’s policies came under fire when CEO Tim Cook testified at a congressional anti-trust hearing.

And over the past few weeks, Apple’s App Store policies have also generated conflict with both Facebook and Microsoft, who have complained that Apple is disabling gaming services they want to distribute through the App Store.

But no developer has done what Epic did on Thursday, stating that it would not play by Apple’s rules. First of all, if you are trying to buy 1000 “V Bucks” in Fornite, Epic will ask you if you want to spend $ 10 to do this through Apple’s store or $ 8 to do so from Epic:

Epic games

Epic explained the move to its users by describing it as a new “discounted price.” But in a media-focused post, the company went out of its way to state that it was avoiding Apple’s 30 percent tax, as well as a similar one that Google’s app store also costs.

“Apple and Google collect an unreliable fee of 30% on all payments” for virtual goods, the post said, noting that Apple does not collect similar fees for real-world developers such as Amazon, McDonald’s and Uber through Apple apps. “Epic Direct Payment offers players just the same types of payment options as these other apps.”

While the move of Epic is affecting both Apple’s and Google’s app stores, Apple is the company that clearly ranks Epic CEO Tim Sweeney, who has been complaining about the company on Twitter for weeks:

That now makes Sweeney a very big gamble. He dares Apple to step back from his stance or shut down Fornite’s Apple app and see what millions of Fortnite players are up to. At the very least, the company seems to think it can survive with a game base coming from other platforms, such as gaming consoles and PCs.

While Epic does not have the same kind of awareness of big tech players like Facebook and Amazon, the company certainly has the capacity to fight Apple. Epic says that last year it generated a profit of $ 730 million on revenue of $ 4.7 billion; much of that money came from Fornite, which Epic says has 350 million players worldwide.

I have asked Apple and Epic for comments and will update if they provide one. In the meantime, it may be worth noting Epic co-founder Mark Rein retweeted my analysis of this morning’s move, without comment:

The time for Sweeney’s move is interesting. It comes after Epic raised a whopping $ 1.8 billion, which Sweeney’s company values ​​at more than $ 17 billion. But it also comes after Cook’s appearance before Congress. If Epic had done this in the run-up to that event, the situation would certainly have been raised by lawmakers.

The move also comes on the same day that Apple’s plans to sell even more of its own digital services came into focus. Bloomberg reports that Apple plans to sell bundles of Apple subscriptions to products such as its music, video and gaming services – later this fall, with a discount.

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