Apple vs Epic
As everybody by now knows, Fortnite, one of the most popular free games out there, was removed from the Apple and Google stores on mobile platforms due to them introducing a direct payment option in the game bypassing the store fees enforced by the respective store owners.
The move was expected by Epic, the makers of Fortnite, as they were on the offensive shortly after with class action suit to both companies.
Epic claims that Apple’s store is a monopoly and that the 30% cut that Apple takes in should be abolished.
Obviously, the claim isn’t that Epic didn’t break the terms of the store they originally agreed to comply with. It is pretty obvious they did. No, they claim that the terms they agreed to shouldn’t exist.
Let’s ignore for a minute that Apple owns the store and therefore can make whatever rule they want. Let’s instead concentrate on what Epic is demanding.
Apple’s store
Before going any further, let’s look at what the Apple Store represents. Apple created the iPhone and the iPad. Through large investments and gambles, they’ve established an ecosystem that is thriving and has over a billion devices strong. They’ve created the App Store to help ensure those devices were made that much more useful by the functionality apps bring. However, Apple likes to control things. They want their devices to be secure and « just work ». So, unlike the Mac where you can install whatever you want, they elected to make iOS and iPadOS closed systems. The best comparison would be some gaming platforms like XBox and Playstation. Sure, you can do more with a phone than you can with an XBox, but the walled garden approach is common.
Apple created the iPhone, that’s their choice to make. Apple provides developer tools, delivers the apps and their updates to a billion devices and provides a centralized way of making app purchases which is regulated by the operating system, allowing parents to prevent in-app purchases, for example.
Apple provides this infrastructure for free (other than the $100 developer fee) for all apps that are free. For apps that are not, it takes a percentage. Same applies for apps that provide digital goods. Those types of goods don’t usually have large additional costs to vendors as they are virtual goods).
New opportunities
Fortnite is available on many different platforms. Their presence on Apple devices is actually a small percentage of where Fortnite is available to play. If iPhones didn’t exist, Epic would make zero profits on these platforms. But these billion of devices and customers exist because of Apple. They are all Apple customers. An Apple customer discovering and experiencing a digital service or good on an Apple device should provide some « finder’s fee » to Apple. That’s what the 30% represents.
The physical equivalent is like having shelve space at Walmart to sell products where they’ve agreed to give Walmart 30% when Walmart customers buys these products. Then one day, Epic shows up at Walmart and sets up their own cash register and put up signs to lure Walmart customers who buy their products displayed on the shelves that they can get a rebate if they pay at their counter, bypassing the Walmart checkout.
As you can imagine, it wouldn’t take long for Walmart to end such practice, and quick. There is no reason why you should expect to have free shelve space for your product in the App Store. And no, Apple isn’t a monopoly because the App Store is the only store in Apple devices. If you don’t like the policies set forth by Apple, feel free to boycott them. 70% profit from these customers is better than 100% of nothing if you don’t. That’s your choice. If enough companies don’t add their apps to the Apple App Store because of this, customers will stop buying iPhones and will move to Android instead.
In a similar vain, there are many reasons why Apple isn’t allowing cloud based gaming on their platform, but that is a discussion for another day.