Why Epic’s ‘loss’ against Apple is actually a ‘win’ for player-driven economies

This week the news came that Epic, the creator of Fortnite, has lost its appeal in its antitrust case against Apple. While the loss comes as a blow for Epic, and for anybody else who isn’t a fan of Apple’s policing of In-App-Purchases, there is one important detail of the result which is very good news for “player-driven economies” in games.

Fortnite is one of the most successful games of all time. As a multiplatform game, users can carry their experience from one platform to another i.e. if you buy an item when playing the game on a console, you can login to your account on a mobile device and have the same experience — using the exact same item you bought on another platform. To enable this, Fortnite has created multiple marketplaces and payment mechanisms, each tailored to the respective platform.

In 2020, Epic introduced a customized payment portal into the iOS version of their game — skipping the default In-App-Purchase (IAP) mechanisms, and directly challenging Apple’s terms and conditions. Apple subsequently booted Fortnite off the App Store, which led to Epic suing Apple, claiming that the latter’s terms and conditions fall foul of antitrust laws. An initial decision was made in 2021, which both companies then appealed against. This week’s news is that both appeals have been rejected, and the initial decision stands.

So what does this mean?

Apple has claimed overall victory in the saga, and in many respects they are right to do so. The decision quashes a potentially serious threat to their lucrative 30% commission on all IAPs. But, digging deeper into the decision, the one point of the lawsuit that Epic won is actually very significant. The original ruling notes that:

“[Apple is] hereby permanently restrained and enjoined from prohibiting developers from… including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing”

In plain English, Apple must permit apps to explicitly link to other marketplaces, outside of the app.

This is a huge step, and particularly for games that feature player-driven economies, where game items are not only bought ‘new’ via IAP, but also ‘second hand’, as users trade items among themselves. This second-hand market, or player-driven economy, is estimated to be worth as much as $10B a year, though currently much of that trading occurs outside of each game, in a grey area of unlicensed marketplaces — which the game developer does not control, and cannot monetize.

With Apple (and, by extension, Google) now being obliged to permit games to explicitly link to external marketplaces, it removes a major barrier for game developers to create their own trading experiences, and opens the floodgates for player-driven economies.

Of course, for such economies to thrive, game developers still face many challenges. While blockchain technology solves the problem of permitting peer-to-peer trading without requiring a banking license, game economies still need to be tweaked to create a system that is fair to gamers (avoiding unpopular “Play-2-Earn” economies), while allowing developers to monetize.

Yet, if the court’s decision is upheld, there is now one less hurdle to overcome.