Apple tries to weaken Epic's lone win in Fortnite case
Plus: Some big legal fees, a speedrunning dog and a new game violence study
Apple is doing its best to minimize Epic’s single antitrust victory in the tech giants’ complex multi-year legal battle.
The iPhone maker plans to charge game makers—and other app developers—a significant fee, if they wish to take advantage of a key change to Apple’s app policies that was mandated by the judge in the Epic vs. Apple antitrust case.
Back in September 2021, Apple was ordered to make the change and remove its “anti-steering” policy. That policy prohibited app-makers from including and promoting links inside their iOS apps that steer users to alternate and potentially cheaper external options to buy things for the app.
In other words, companies like Epic had been barred from putting a link in the iOS version of Fortnite that would load up an Epic storefront where Fortnite outfits might be sold at lower prices than in the app. This was one of the options Epic sought in challenging Apple’s standard 30% cut of all in-app transactions.
(A refresher: The companies’ conflict began in summer 2020, when Epic added its own payment options to Fortnite on iOS, circumventing Apple’s 30% fee and getting itself booted off the store.)
Epic v. Apple had been on appeal until yesterday, when the U.S. Supreme Court declined to hear both sides’ appeal of the case’s mixed ruling, locking in the lower courts’ decisions. That set Apple in motion to announce a new policy, but with strings attached.
In her ruling in the fall of 2021, U.S. District Court Judge Yvonne Gonzalez Rogers called Apple’s anti-steering policy an “incipient antitrust violation.” Her resulting injunction is brief. It bars Apple from “prohibiting developers from (i) 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.”
Yesterday, Apple said it was ready to comply. There are, per Apple’s explanation to the court, some limits.
Apple says developers who want to link to outside payment methods …
Have to apply to Apple for this “entitlement” and prove they are using a legit third-party payment service provider and have a process in place for managing payment disputes.,
Must still offer in-app purchases.
Can’t “discourage” app users from making in-app purchases.
Must notify users before they click on the outbound link that Apple isn’t responsible for the “privacy or security of purchases made on the web.”
Can only offer the link once in the app, and not in a pop-up, nor in any parts of the app a user sees when trying to make an in-app purchase.
Can’t mention the alternate payment options in their app’s listing in Apple’s store.
And—this one is key--must pay Apple “a 27% commission for digital goods and services that take place on a developer’s website within seven days” after a user taps the external purchase link in the app (the fee goes down to 12%, from a standard 15%, for developers in Apple’s small business program).
Apple says it “has a right to audit developers’ accounting to ensure compliance with their commission obligations and to charge interest and offset payments.”
That 27% commission is barely lower than the standard 30% for in-app purchases and essentially equal to it once a third-party payment processor takes a cut. It appears to make it financially impossible for an app-maker to sustainably or affordably offer external purchases at a meaningful discount.
Epic says they will challenge this. Yesterday, Epic CEO Tim Sweeney said on X/Twitter that “Epic will contest Apple's bad-faith compliance plan in District Court.”
Gonzalez Rogers’ ruling hadn’t addressed whether Apple could collect a commission.
Apple said in its filing yesterday that charging a commission is “consistent with the Court’s rationale for upholding Apple’s other App Store policies.” The company says app developers should not be able to avoid a commission while benefiting from the iOS ecosystem that Apple has built.
Apple further justifies that it needs to collect a commission, because collecting a commission costs money: “collecting a commission in this way will impose additional costs on Apple and the developers.”
But, it notes, it won’t be able to get everyone to pay: “with hundreds of thousands of developers with apps on the U.S. storefronts for the iOS and iPadOS App Stores, collection and enforcement will be exceedingly difficult and, in many cases, impossible.”
An Apple rep didn’t reply to a question about this by press time. In its filings, the company noted that its requirements for external payment links “are designed to minimize fraud, scams, and confusion.”
Item 2: Apple’s legal bills
What does a case like Epic v. Apple cost? Apple says Epic owes the company at least $73,404,326 in legal fees..
Epic is on the hook, because an appeals court ruled last April that Epic’s developer contract with Apple required it to indemnify the tech giant.
Apple said in a filing yesterday that it is giving Epic a 10% discount, down from $81 million in a calculated costs, to recognize “that Epic prevailed on 1 of the 10 claims it asserted.” It noted, though, that its own accounting suggests it probably only spent $275,030 defending the anti-steering claim and therefore considered its $8 million discount to Epic “extremely generous.”
Item 3: Fortnite’s iOS return?
The Supreme Court ruling is a key milestone for Fortnite and Epic’s other apps’ potential return to iOS
In September 2021, Epic CEO Tim Sweeney said Apple had banned Epic from being an iOS developer and that Epic asked for its developer account back.
Later that month, he said Apple's lawyers said Apple would "not consider any further requests for reinstatement until the district court's judgment becomes final and nonappealable."
As of yesterday, the judgment isn’t appealable, though the parties are clearly still in dispute over Apple’s anti-steering compliance, leaving the district court with more work to do to reach a final resolution.
I asked reps from Epic and Apple if we are at the moment of a possible return. No comment or update from either of them about that yet.
Item 4: Dog replaces robot
Here’s that dog speedrun I told you was coming last week. The game is Gyromite for the Nintendo Entertainment System. Back in the day, you played it with the NES’ Robotic Operating Buddy. Yesterday, at Awesome Games Done Quick, it was played by a speedrunning Shiba Inu.
Item 5: In brief…
🚨 Layoffs: Thunderful, the gaming publisher behind 2023’s acclaimed Viewfinder and Planet of Lana, says it will lay off 20% of its workforce this year, citing “over-investments in the past few years.” Thunderful went public in late 2020 and acquired several smaller studios since then.
💰 Build a Rocket Boy, the studio founded by longtime Rockstar Games producer Leslie Benzies, says it has raised a new $110 million round of funding. The company’s flagship release, Everywhere, is set to come out “in the near future”
💬 The week’s most viral game industry quote so far has been Ubisoft subscriptions director Philippe Tremblay telling GameIndustry that gamers need to become more “comfortable” not owning their games, for subscription plans like the newly revamped Ubisoft+ to really take off.
The full quote, if context is your thing: “One of the things we saw is that gamers are used to, a little bit like DVD, having and owning their games. That's the consumer shift that needs to happen. They got comfortable not owning their CD collection or DVD collection. That's a transformation that's been a bit slower to happen [in games]. As gamers grow comfortable in that aspect… you don't lose your progress. If you resume your game at another time, your progress file is still there. That's not been deleted. You don't lose what you've built in the game or your engagement with the game. So it's about feeling comfortable with not owning your game.”
⁉️ Take Two has opposed the trademark for Remedy Entertainment’s new-ish “R” logo, saying last summer that it was too close to Rockstar’s, Respawn First reports. It’s awkward, because, among other things, Rockstar is financing Remedy’s work on remakes of Max Payne games it made with Rockstar. Unclear if the dispute is ongoing. I’ve asked.
🎾 Take Two is reviving a long dormant tennis series with TopSpin 2K25, which is “coming soon.
🎮 Nexon’s development label Mintrocket, best known for 2023 hit Dave the Diver, is making a top-town team-based PvP game called Wakerunners.
🎨 SquareEnix’s upcoming multiplayer game Foamstars includes AI-generated art for in-game album cover art, VGC reports. The publisher says the art accounts for .01% of the game and was made “with Midjourney using simple prompts to produce abstract images.”
🧠 Playing violent video games doesn't make adults less empathetic to other people’s pain in real life, according to a new study by researchers at the University of Vienna and the Karolinska Institute in Stockholm.
🏆 The Game of the Year nominees for the 24th annual Game Developers Choice Awards are: Baldur’s Gate III, Cocoon, Dave the Diver, Dredge, Marvel’s Spider-Man 2, and The Legend of Zelda: Tears of the Kingdom. The winners will be announced during a live streamed ceremony on March 20.
🤔 Almost missed this: Nintendo sells Pikmin shirts that are designed to make it look like Pikmin are carrying your pockets and buttons away. The button one might only be in Japan. Clever!
Ubisoft seems to do everything in their power to make everyone hate them as much as possible
I’ve just realised tonight that there hasn’t been a new gameboy since the 3DS. Do you think, with how mobile gaming is and how the switch is basically handheld, that there might not ever be another gameboy?