Why the Apple v Epic Games Battle Royale Matters — Even to Fortnite Haters

James Barisic
Aug 18, 2020 · 5 min read

There is only one story in tech right now and that is about Apple knocking Fortnite — and specifically, it’s developer, Epic Games — off the App Store. To many, this is just a spat about a game that they just aren’t interested in. But the issues raised are much wider and will impact every iPad and iPhone user. Here’s a breakdown of why the Apple v Epic Games Battle Royale matters.

What is it all about?

Epic Games recently decided to start selling Fortnite’s in-game currency — v-Bucks — directly to gamers using other card transaction providers rather than using the Apple App Store’s purchasing mechanism. On the one hand, this is much cheaper for Epic Games because they do not have to pay the App Store’s 30% fees and, on the other, Apple misses out on 30% fees. Epic Games decided to pass on the lion’s share of this saving to users. Apple says this is not allowed under its rules. Epic wants the App Store to allow for more freedom. And so to court…

Apple takes 30% of your loot (Fortnite chests for illustrative purposes only!)

Why shouldn’t Apple make some money from running the App Store?

Nobody is arguing that Apple should not be able to run a business and make money from the App Store. The issue is that their fees are high and the rules mean that you are not allowed to use alternative providers. Effectively, if you want to be able to appear on iPads and iPhones, you have to pay what Epic Games describes as the Apple Tax. If you don’t pay, you can’t appear on Apple’s devices — and that’s a billion plus devices.

But this is just one game, right?

The case is characterised as being about Fortnite and, to an extent, it is. For those of you who have been living in a box for the last few years, Fortnite is a Battle Royale PvP (Player v Player) game in which the last person standing is the winner. You run around an island, building and fighting, cooperating with team mates or playing along, searching for weapons and fishing… ok, it sounds weird when you write it down.

The Authority — the creepy place at the heart of it all

I bet you play Fortnite and that’s why you care. Nobody else does!

I do play Fortnite! And it’s great fun! However, this is much wider than just Fortnite. There are two issues. Firstly, by blocking Epic Games, Apple has effectively denied access to the Unreal Engine — a physics engine that makes games look incredible. In fact, it’s also used by TV companies to make programmes like Disney’s The Mandalorian. This has an impact on a raft of games and could diminish the experience of users and the development of games.

Secondly, this isn’t just about Epic. Apple’s 30% fee has a huge impact on all developers who, if they could use other payment providers, could reduce their prices by 20% and potentially increase revenues. Of course, Apple could do the same — reduce their fees to be competitive and potentially increase revenues. However, at the moment, it has no reason to because it is the sole gatekeeper to everyone’s iPad and iPhone.

So, in a nutshell, Apple’s high fees act as a brake on income streams for developers and, therefore, have an impact on the future development of apps.

Yes but why is everyone going on about Fortnite? Every developer has to pay the same so it’s a level-playing field, right?

Well, no. Not every app does have to use Apple’s payment system. Epic has identified Amazon, Grubhub, Nike SNKRS, Best Buy, DoorDash, Fandango, McDonalds and StubHub as just some of the companies that can take direct payments and have not been kicked off the App Store. This seems mainly to be targeted at gamers. That said, they have had support from non-gaming devs. Spotify, for instance, have said “Apple’s unfair practices have disadvantaged competitors and deprived consumers for far too long. The stakes for consumers and app developers large and small couldn’t be higher and ensuring that the iOS platform operates competitively and fairly is an urgent task with far-reaching implications.”

Fortnite offers alternative payment methods outside of App Store
Fortnite offers alternative payment methods outside of App Store
Epic have offered alternative ways to pay outside the Apple App Store

But it’s just a game!

Up to a point. It is also a social platform and an entertainment platform. Epic are really pushing the boundaries of what games are — you only need to take a look at their recent tie-up with Discovery Channel to begin to understand how they are blurring the boundaries of gaming and traditional broadcast entertainment. It’s also a game with 350 million accounts. To put that in perspective, that’s more accounts than there are people in the United States.

What do you think is going to happen?

Who knows? From a European point of view, though, you can see there are clear competition rules here. The iOS portable device market is huge and Apple acts as a gateway with a very, very high cost of payment processing. For instance, a normal fee for processing payments like this would be 3–4%. Apple is charging 30%. You can absolutely see the European authorities seeing this as an abuse of consumers and requiring a change because, fundamentally, there is no way you can install things on your iPad or iPhone without going through the App Store (a position that is not the same with Android devices). However, such a ruling would take time — years. If Apple have any sense, they will bite the bullet and reduce their fees — they could still make a hearty profit and, if they played it right, they could make it look like they were the good guys. But, whatever happens, they are unlikely to be able continue like this in the long term.

But, of course, I could be completely wrong! Where do you think this is heading? Are you an iPad Fortnite player? What are your plans to finish the season once it is blocked? Let me know in the comments below!

Digital GEMs

Digital in business and society from GEM Digital Strategy Management students, alumni and lecturers

James Barisic

Written by

Entrepreneur. Lecturer in Digital Business at the Grenoble Ecole de Management. Digital. Political. European. Keeper of chickens & rabbits. Views my own.

Digital GEMs

Articles on digital in business and society by students, alumni and lecturers of the Grenoble Ecole de Management Advanced Masters in Digital Strategy Management.

James Barisic

Written by

Entrepreneur. Lecturer in Digital Business at the Grenoble Ecole de Management. Digital. Political. European. Keeper of chickens & rabbits. Views my own.

Digital GEMs

Articles on digital in business and society by students, alumni and lecturers of the Grenoble Ecole de Management Advanced Masters in Digital Strategy Management.

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