A Challenge to Apple's Walled Garden, a Battle brought by Fortnite?

For a quick peek, the article first:

Short version, Apple kicked the Fortnite app off the store because it bypassed ApplePay and Apple wants it’s cut. Fortnite is suing apple for anti-competitive behavior, in that it doesn’t allow other App options.

Honestly, I feel a plague upon both their houses, since Fortnite gouges and robs, and Apple gouges and robs. But it’s an interesting argument, and there have been many calls to allow companies to work more freely in the iOS environment. I almost considered this a GD topic: should Apple be forced to allow others into the ‘walled garden’ that is the App store, and if everyone (especially the mods) feel it should be moved, feel free.

For what it’s worth, I don’t think it’s fair to put forward the question without giving my opinion, even if I dislike both parties intensely. So I do feel it’s time that iOS be opened up. Much like the Dope, I feel that having a wider array of opinions (apps) would be beneficial, but I would also argue that Apple should be allowed to moderate third parties for safety and access a reasonable (not freakin’ 30%) charge to do so (also like the Dope and our honorable Chartered members).

Your opinions are greatly welcomed.

Thanks for starting this thread, ParallelLines; I was gonna do it but couldn’t decide which forum it belonged in. :smiley:

I think Epic Games is gonna have a hard time with their arguments. For instance, they seem to have contradicted themselves several times already. Like by arguing that Apple’s app store is a monopoly of sorts, while also suing Google for running an app store that they claim is also a monopoly of sorts. The notion that the Apple app store is a monopoly because only Apple runs it doesn’t hold a lot of water, IMO.

I missed the edit window; here’s the AP article that ran today:

Like the Sony vs Disney kerfuffle, this feels like Scrooge McDuck & the Monopoly Guy having a slap fight while both trying to convince me that they’re totally on my side and the other guy is the greedy jerkface. Oh, I wonder which multi-billion dollar company is more concerned about me and not returning a profit to their shareholders/investors.

I think Epic has the weaker argument (Fortnite is on PC, Android, iOS, Xbox, Nintendo and Playstation – unless I’m forgetting any – so how much of a monopoly is Apple locking them out of?) but I’m not a lawyer and have been “following” this more for the salacious sales reports tidbits than out of legal curiosity.

Amusingly, some small time game developer is currently suing Valve over their supposed monopoly, citing as evidence that Epic has been unable to significantly crack into Valve’s market share and Epic Game Store should be considered a failure. Meanwhile, Tim Sweeny is saying that Apple’s attempts to portray EGS as a failure (i.e. Apple: “Don’t tell us how to run a store, Mr. Near Billion Dollar Losses”) are ridiculous and those losses are really investment in the future. So this Epic vs Apple case is handing Valve the defense of “We’re not a monopoly; Epic is actually building investment and going to be super profitable any year now, just ask them!”

Yes, except one side taking my money by creating content (even if it’s BS content), and the other is playing the whole “printer ink is more valuable than gold” monopoly gambit.

I hate the printer ink sales model, it’s BS and places an unfair load on the consumer to understand the proprietary trade secret underpinnings of the market, when they are barred from having those secrets.

I buy an iPhone or an iMac, I can’t see how much the ‘walled garden’ is costing me, it’s deliberately hidden from me. It’s deliberately hidden on other markets as well, once I make my hardware choice, I’m locked into a market that can extract money from me, without providing equal value in return.

The fact that I can choose which monopoly is going to screw me over doesn’t make it a competitive market.

I don’t really see that. “Printer ink” is HP selling me a printer that’s then inert junk if I don’t exclusively buy HP’s expensive ink. But you can buy an iPhone and run millions of apps ranging from free to paid and get full functionality of the phone.

Is it anything? At least in this specific case, from what I could tell, twenty bucks buys you 2,800 “V Bucks” (Fortnite currency) on PC, Xbox, PS, Switch, iOS and Android. If the walled garden was costing you, why aren’t V-Bucks significantly cheaper on PC where Epic has their own store and no middleman between them and your money? This lawsuit isn’t about helping you, the consumer, it’s about Epic wanting a bigger slice of the money pie between them and Apple.

By the same token, Epic claimed that their Epic Game Store would lead to lower prices since they took less of a cut. In reality, that applied to a single game, Metro Exodus, where it was almost certainly part of their exclusivity payout arrangement. Everything else, a $60 game is still $60 and maybe some vague handwaving about “Well, if devs have bigger cuts, it’s better for gamers yanno?”

I’m not really defending Apple (I’m an Android guy myself) and they have a lot of crap to fix like Right to Repair. But this particular fight isn’t about me at all, it’s about the company with an insanely profitable video game franchise in the world wanting more billions for its investors. The “But it’s for the gamers!” bullshit doesn’t do anything to endear me, but that’s not a legal argument.

I don’t play Fortnite myself, I simply suck as competitive shooter games, but how does Fortnite gouge and rob people? It’s a free game for all to play. If someone wants the special seasonal loot (or whatever it’s known as) they can pay for the battle pass that season. If not they can still play the game. If they are making skin packs and avatars that people think are way cooler than the free stuff then it must have value and there’s nothing wrong with selling access to it.

Apple is more complicated. I think the 30% they take off the top for anything sold on the app store while prohibiting software sold elsewhere from being installed is anti-developer but the trade off is I don’t need to think to hard as a user about whether or not an app will work or if it has a virus etc… because Apple does that.

I thought about that but forgot to mention it in my post. It’s hard to use the printer ink analogy for Apple when you don’t need to pay anything to play Fortnite on your iOS device (aside from the device cost, of course).

In terms of stealing, they’re most famous from taking ‘dances’ from other shows and individuals online

In terms of gouging, they’re a micro-transaction fueled hell of lootboxes and like, a trait shares a lot of ‘F2P’ games out there, to the point where such things were (still are?) being seriously considered gambling in the EU.

Millions of apps procured from an Apple-run site. Zero apps from a source other than Apple. This is the crux of the suit, Epic has to wet Apple’s beak in order to have their app available to iPhone users.

The issue winds up being that hardware companies are inserting themselves into the usage of the machines they sell, and it isn’t just Apple. They aren’t just selling you hardware and letting you use it, they are demanding a cut of future revenues generated by the hardware.

Sure, but if my HP printer had millions of cartridge options, including thousands of quality free ones, I wouldn’t be worrying as a consumer about it. I just don’t think the analogy holds. In this specific case, it matters even less: You can get Fortnite for free and buying V-Bucks through iOS costs the same as it does through any other platform (Epic had a ‘sale’ on iOS V-Bucks bought direct but that was just intended to force the lawsuit and make them look like the protagonist; as noted, they have no issue charging $20 on PC with 100% going direct to them). There’s no consumer benefit to what Epic wants in this instance.

I’m not a big “walled garden” fan and, again, I handle that by using Android (though I haven’t actually sideloaded anything on my phone in ages). But a lot of people see it as a feature and I’m not sure Apple should be legally prohibited from running their devices/store that way. But, either way the judge decides, this isn’t about me – it’s two billionaires playing tug of war with the next sack of money while they both proclaim to be the common man’s hero.

Is it correct hat 30% is pretty standard in the industry? I thought I read somewhere that Sony also takes 30% but Epic isn’t suing them.

And is the problem 30% is too high? Or must the cut be 0%? If 0% then how does Apple pay for the App Store infrastructure? Apple is supplying something of value in running the App Store, do they not have a right to try and profit from their effort… at all?
If something between 0% and 30% then why that number and not 30%?

I think, if I understand the App Rules correctly, that an app CAN circumvent the App Store Payment. The rule is mainly though, that you can’t advertise the alternate route in the Apple App itself. So I think Epic can sell whatever it is they are selling on their website, they just can’t circumvent the App Store by directing the App itself to the website.

I think a case can be made about Apple having too much power, but this Fortnite brouhaha is not it. Better examples are Spotify (a competitor to Apple Music) and the upcoming AirTags (a ripoff of Tile). As far as I can tell Apple is not fucking with Epic to favor Apple in some anti-competitive way, they are holding them to the same standard as everyone else.

AFAIK, 30% is standard. Google takes 30%, Valve takes 30%, Apple takes 30%, pretty sure Sony and Microsoft take 30% – though I think MS announced they were lowering the cut for things sold through the MS store? Not sure if that’s PC games or Xbox stuff or everything or what. Epic’s complaint is that 30% is too high. Sony is Fortnite’s largest/most profitable platform and, no, Epic isn’t suing them over their 30%. My guess is that they decided “Apple is a monopoly!” was the easiest target for a lawsuit since no one* is trying to sideload random 3rd party stuff onto their PS5 and would use their Apple win to force the rest of the platforms into submission.

(*Ok, I’m sure someone is but you know what I mean)

Part of Epic’s story is that the Epic Game Store only takes 12%. Apple has pointed out that Epic might be taking a mere 12% but Epic Game Store is also losing tons of money so maybe they shouldn’t be giving business advice (or demands). Epic says they’re only losing tons of money because of all their investment in exclusive game deals (which makes the “Apple is a monopoly!” thing kind of ironic) and give-aways and they’ll be profitable before you know it. As I recall, Epic Game Store’s revenue was flat from 2019 to 2020 though (lots of new “customers” but they just grabbed free stuff and didn’t buy anything) so it remains to be seen if EGS can actually run at a profit without a steady firehose of supplemental Fortnite money from 12 year olds with their mom’s credit card.

Apparently this was just a rumor and Microsoft has said “Nope, we need it at 30% and it’s staying at 30%” at least in part due to lack of profit Microsoft gets from console sales.

“Your justification for the 30% commission is because the hardware doesn’t make money,” Apple counsel asked in the trial.

“My justification is that the commission is required for us to even build the console,” Wright [Vice President, Gaming, Media & Entertainment at Microsoft] replied.

Apple’s lawyers also asked whether or not Xbox consoles eventually became profitable over time as manufacturing costs decline, and Wright replied no.
[…]
Currently, Microsoft charges developers 30% of any revenues made on the Xbox platform, including game sales, microtransactions, and DLC. Developers keep 70%. This arrangement is essential to keeping the Xbox console business afloat and offsets the high costs of mass-producing, ordering, manufacturing, shipping, and marketing.