The current tech “battle royale” continues to be played out in US courts.

Monday, September 28, Epic, the developer of the 350 million-user shooter Fortnite, is suing Apple, the American giant that sells iPhones like hot cakes, in a procedure that could change the face of mobile video games and more generally the economic model of the apple brand.

At first glance, the procedure looks like a battle of Goliath against Goliath, like there are so many in the tech world.

On the one hand, Epic demands that Apple reopen the doors of the AppStore in Fortnite, banned in August 2020, and that it be authorized to develop games and applications for the iPhone and iPad.

On the other hand, the famous smartphone manufacturer maintains that Epic has violated rules known to all and must therefore suffer the consequences.

Front-end assault on the App Store business model

But in reality, the developer of Fortnite - 40% owned by the Chinese giant Tencent - has taken the reins of a wider sling against business practices of Apple deemed "tyrannical".  

Epic drew on August 13 by offering players on mobile (iPhone or Android), the possibility of paying for virtual weapons or improvements by circumventing the rules established by Apple and Google.

Usually, these two behemoths charge 30% on every transaction made in an app.

The system invented by Epic deprived them of this commission.

No one had ever attacked so head-on the very profitable economic model created by the two mobile giants.

Their reaction was quick: they kicked Fortnite out of their app store.

On Android smartphones (Google's operating system), the game can still be downloaded through other channels… but not on iPhones.

Nearly 130 million gamers were deprived of their daily dose of Fortnite on Apple smartphones overnight.

They are the collateral victims of the battle waged by Epic to end the 30% tithe levied on every transaction by the Apple brand and Google. 

Because the developer does not hide it: his provocation of August 13 was to push Apple to exclude it from the App Store to start the legal battle that followed.

In an interview with The New York Times, Tim Sweeney, CEO of Epic, admitted that his group, which generates more than $ 17 billion in revenue per year, can afford to pay the 30% on every transaction, but that it was a matter of "principle" to defend the interests of all those "developers who make less money than Apple with their applications" because of this commission.

In court, Epic accused the father of the iPhone of "abuse of dominance" to impose an unfair pricing policy.

His crusade drew a wide movement of sympathy among the apple brand's competitors.

Microsoft and Facebook have both supported Epic in its process.

Mark Zuckerberg, the very influential boss of the social network, even said “that we should take a closer look if the control that Apple exercises over its App Store” is not a brake on competition.

Anti-Apple Coalition

A coalition was even formed, Thursday, September 24, to bring media weight to Epic's claims.

Composed of 20 web and media companies, including the music streaming service Spotify or Match Group (owner of the Tinder dating app), it also claims a lower commission on transactions via the applications.

This anti-Apple front believes that nothing more justifies these 30%.

“Originally, this tariff was to allow Apple to finance investments in its platform to find a place in an ultra-competitive environment,” recalls the Washington Post.

In 2008, developers who did not want to pay this commission could always turn to Nokia or BlackBerry, which still dominated the market. 

But the landscape has changed a lot.

Apple has swept away most of its competitors and the App Store is no longer a fragile flower in full development ... So why maintain this commission at such a level, ask members of the coalition led by Epic?

The Cupertino giant responds that it is expensive to ensure the proper functioning of a platform that receives 100,000 new applications per week.

You have to pay the 500 or so experts responsible for checking that everything is in order.

Apple also accuses Epic of posing as the white knight of application developers, when the group is simply seeking "preferential treatment" because of the popularity of Fortnite.

Apple doesn't want to be out of the game

But above all, Apple can hardly fold.

The App Store brings in between $ 15 billion and $ 19 billion per year for the group, financial analysts estimate.

And the 30% commission plays a central role in this profit machine, assures the New York Times.

This transaction tax is also the only way currently for Apple to benefit from the boom in mobile games.

The group has not followed the path of Google, Amazon or Microsoft, all of which have developed online gaming services available on smartphones to try to take advantage of this market which is worth 68.5 billion dollars. 

If Apple let gamers pay for their Fortnite purchases directly at Epic, it would open a door that all game developers will want to borrow.

The apple brand would then remain on the wayside of one of the few sectors that still post double-digit annual growth.

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