Apple and Epic, former best friends, have split. It’s not hard to remember how, not long ago, Apple showed off the amazing power of the Unreal Engine on iOS through Infinity Blade, an action fighting RPG game. It was one of the first truly beautiful 3D iOS games, and it spawned many more.
One of the latest—and perhaps the most popular ever—was Epic’s Fortnite. Fortnite, for those who aren’t aware, is a third person battle royal shooter game, with elements of creativity and constructing forts, bases, traps, and more. Players have to not only aim and shoot quickly, but quickly construct barriers and other tools to help them survive until the end of the match. It’s fun, and it’s available on a wide variety of platforms. Windows, macOS, PS4, Xbox, Switch, Android, and, yes, iOS. Or, at least, it was. Now you can’t find Fortnite on iOS.
Apple kicked Epic out.
In This Article:
Epic’s Fight with Apple
Epic created the Unreal 3D engine, a staple of some of the best 3D games on any platform, including iOS. In fact, when Epic brought the Unreal engine to iOS, it solidified the platform one for real games. Epic would go on to create the Infinity Blade trilogy and help many other developers bring games to iOS. They even were among the first to incorporate Apple’s Metal graphics processing. Finally, they brought one of their most popular games, Fortnite, to Apple’s platform. iOS gaming reached new heights thanks to Fortnite.
So what went wrong?
Fees.
Apple’s 30 Pieces of Silver Percent
When Apple first introduced the App Store, the 30% cut was explained that they kept it to pay for running the App Store. You can see in the clip above what Apple mentions as part of this cut. No credit card fees, no storage costs, notification services, and free marketing. The largest of those would be storage costs. Especially now, when servers have to be able to handle not only the app, but large amounts of user data that can now live in iCloud. Now, more than then, the 30% cut makes more sense.
And it’s still too much.
Nearly a third of a developer’s revenue goes to Apple? That’s a lot. Since iOS users will only pay so much for an app, there’s an upper limit to App Store pricing, yet it may not be enough to turn a profit. Apple set a precedent of inexpensive and free apps. They even encouraged low cost high-end apps, with large games costing just $5. Those are games that could normally go for at least $15, even $20 or more. Instead, the developer gets $5. On top of that, they only get $3.50. From there, they still do have to pay for their own server costs, their own hardware, their employees, and every other running cost or marketing cost. It’s just not enough.
Some companies choose to increase their prices for Apple’s apps and in-app purchases. A subscription might be $12.99 through Apple but $9.99 on the website. This is because they already set their price as low as they could.
For the second year of subscriptions, Apple takes 15%. That seems like a more fair price.
Still $99/Year
On top of the 30% cut developers owe Apple, there’s also the $99/year price that developers owe. This is to maintain their Apple Developer status, which is required for developing and releasing apps on the App Store. If your apps are free, this still lets Apple make money from your use of their platform, or at least pay to cover the costs your app incurs from being on the App Store.
Developers are getting charged twice. Large companies have to purchase enterprise certificates for their developers. Apple doesn’t offer any kind of deal for reducing this price if sales exceed $99/year for each developer. It’s just an expense on top of the 30% fee.
Monopoly
If you don’t like it, tough. There’s only one way to make money on iOS, and it’s playing by Apple’s rules. You don’t see the same thing for computer apps. Or webpages. Imagine if a browser had a monopoly on the entire internet. Apple’s bleeding these developers dry, taking so much they can’t meet their own operating costs, and they have nowhere else to go. The question remains, if so few people can succeed on the App Store, why even try?
Apple gives developers a rough deal and it’s the only deal in town. Because of this, iOS is highly secure, but the monopolistic behavior also hurts other companies.
In-App Purchases
For a long time, I’d tell you that in-app purchases were the bane of gaming. They destroyed mobile gaming with a pay-to-win model. But some developers found other ways to make money without forcing players to pay up to win matches. One of those companies was Epic.
Fortnite is the same game for free that it is if you’ve dumped money into it. Your player won’t be any stronger than others. However, this is a game with a huge social following. Many teenagers play. You know how peer pressure is. The game has a third person view, which constantly reminds you that you’re playing using a skin that noobs get. Everyone can tell from across the battlefield: this player’s a total noob. No one wants that. I was recently playing Fall Guys and felt embarrassed to be playing as the default player. I’m not quite as motivated by peer pressure, and my wolf with sprinkles bean is very content, thank you very much.
However, many others will pay for cosmetic changes. For dance moves or weapon skins, hats and hairstyles. It’s a way to show that you’ve invested in the game, you’ve completed your look, and you’re serious about playing. Epic and others found that personalization can also motivate users into paying for virtual content. Winning isn’t the only reason people play. Soon, we started seeing amazing games with nothing more than cosmetic in-app purchases, and these games were making serious bank.
V-Bucks for Your Real-Bucks
Epic’s version of in-app purchases is to sell their V-Bucks. V-Bucks are digital currency you can use to buy cosmetic upgrades. If you buy them through Apple, Apple can take their 30% cut. Epic has to choose to either inflate the price or tell users that they can’t buy V-Bucks on iOS. Apple usually doesn’t allow app developers to do the latter. However, Epic made their own version. They allowed users to buy V-Bucks directly from Epic, skipping the App Store fees. Epic also showed users that the price was 30% lower if they did this.
Apple was not happy.
Apple quickly pulled Fortnite from the App Store, but that was only the start of trouble between the two companies. Epic is now suing Apple for monopolistic behavior. After all, if you want to develop for iOS, you have to pay Apple the regular $99/year developer fee as well as give them 30% of your sales, 30% of a customer’s first year of a subscription, and 15% of that subscription after that. While 15% sounds fair, the other two cuts a huge chunk out of developer’s pay. For Epic, it was enough to finally declare war.
Apple Strikes Back
Late yesterday, Apple pulled Epic’s developer certification. Epic is no longer on the App Store in any capacity outside of games that are using the Unreal Engine. That means all of Epic’s apps are no longer on the App Store. If you have downloaded their games, you can keep them, but if you delete them or restore from an iCloud backup, you’ll lose them.
Apple claims they did this because Epic continued to push updates to Fortnite, despite Apple removing the app from the App Store. Each update still violated the App Store guidelines. Apple claims Epic was spamming updates, despite the fact that they knew they still had guideline-violating features.
Epic responded via, of all things, a Twitter response to a 9to5Mac tweet.
Apple's statement isn't forthright. They chose to terminate Epic's account; they didn't *have* to.
Apple suggests we spammed the App Store review process. That's not so. Epic submitted three Fortnite builds: two bug-fix updates, and the Season 4 update with this note. pic.twitter.com/VpWEERDp5L
— Tim Sweeney (@TimSweeneyEpic) August 28, 2020
Tim Sweeney, CEO of Epic, responded, stating that Epic wasn’t spamming Apple. Instead, he says they issued to bug fixes and the season 4 update for Fortnite. The idea was that the app, if Apple approved it, could be ready for the next season. Of course, all three updates didn’t fix the problem, and Apple apparently said, “Three strikes, you’re out!”
Unreal Engine?
While games featuring the Unreal Engine are still available on iOS and macOS, that could change in the future. Epic, with their developer account terminated, may not be able to license the 3D rendering engine for iOS or macOS. Therefore, macOS users will have to disable Gatekeeper to install any games that use the Unreal Engine, and iOS users may be stuck with older versions of the engine. For now, nothing has changed, but this could get worse for gamers on Apple’s platforms soon.
The “App Console”
Wouldn’t it be great to have your favorite console games on any platform? You could choose the game console you like the best and just know that every game will be available for it. Perhaps you’d prefer the portability of your Switch? You could play Horizon Zero Dawn on the subway. Wouldn’t that be cool? But you can’t. Nintendo has the final say for what games are allowed on their platform. Sony for theirs, and Microsoft for theirs. You can’t play unlicensed games on these systems without bypassing their security. Consoles only allow users to play licensed games, and they control the licensing.
We don’t see lawsuits against console manufacturers. This is, in part, because consoles actually operate differently. Let’s consider a Sony exclusive game. I want to buy Spider-Man. Where can I get it? I could download it from Sony’s Playstation store, go to any game retailer, or I could get it from a friend or used online. Basically? I could get it anywhere. It’s still a Sony exclusive. it’s still licensed by Sony. But I can buy it anywhere.
What about an app? Where can I buy Skate City for iOS? From an Apple Arcade subscription only. What about Stardew Valley for iOS? Or Oxenfree? Life is Strange for iOS? There’s only one place to get iOS games: the App Store, and Apple takes their cut.
What Happens Now?
Apple, inadvertently, showed exactly how they could resolve this. Licensing. It won’t matter where Apple users get their apps, as long as Apple has a licensing program. It was Steve Jobs who described the iOS App Store like an “app console,” they really should have seen this coming.
Developers would still pay Apple a yearly licensing fee. They’d still have to get approval for the app and updates through Apple. This would ensure that Apple can control the security of iOS devices by forbidding unlicensed apps that could harm users. The rules may even be more lax than those on the App Store, with the company focusing primarily on security.
Apple may have to increase their developer licensing program fees, but could offer to clear them if the app has a certain number of sales or profits on the App Store. This would still incentivize the App Store, but developers could also allow people to download their app on competing app stores instead, ones that perhaps only take 15% for sales or in-app purchases.
Apple doesn’t want the competition. They have a monopoly now, and they’d like to keep it. But monopolies break antitrust laws. Apple is clearly breaking the law here, and there’s another solution available. This very likely could end with the App Store being only one of the sources for apps and in-app purchases on iOS. Epic could be just large enough to finally break up Apple’s App Store monopoly.
Developers and users will win, but Apple will take a (likely inconsequential) hit. In the chance that Apple wins, as judges in the U.S. have defended monopolistic behavior before, Epic and others will have to go back to giving in to Apple’s demands. No one wins when we prop up monopolies.
Regardless of how this goes, this could go on for months or even years. The App Store likely won’t change anytime soon. Until then, you may see nothing from Epic on it.
Sources:
- Filipe Espósito, 9to5Mac
- Anthony Ha, TechCrunch
- Caitlin McGarry, Gizmodo