Epic Games Throwing a 'FreeFortnite Cup' Bash Before iOS Users Lose Access

[Realityck]

What makes the number 30% absurd out of curiosity? What is a non-absurd amount to charge, and who decides that?

Epic’s Battle With Apple and Google Actually Dates Back to Pac-Man - Bloomberg -8/19/20

"A 30% fee from the age of cartridges is at the heart of its fight with the giant gatekeepers of mobile gaming."

Epic Games Inc. is out to prove it’s worthy of its name. It’s in a massive fight with Apple Inc. and Google over the 30% cut that both companies take from game revenues on their platforms. Epic contends that the fee is both outdated and unfair. The revenue split has its roots in 1980s Japan and the era of chunky cartridges and primitive consoles. Now it’s being questioned by game makers such as Epic across the global developer community.

The so-called platform “tax” dictates the distribution of vast sums of money. Epic’s own Fortniteis estimated to generate in excess of $1 billion annuallyfrom in-game cosmetics and extras. The company’s protest against the giants escalated when it gave Fortnite users the option to buy the add-ons directly—which would cut Apple and Alphabet Inc.-run Google out of the transaction. That prompted Fortnite’s removal from both the iPhone’s App Store and the Android Play Store.

But what was the 30% supposed to pay for in the first place? It was the Nintendo Entertainment System that first introduced the platform fee in the early 1980s. It began when Namco Ltd., the creator of Pac-Man and a major provider of arcade games at the time, wanted to expand its distribution via Nintendo’s nascent console—called the Famicom when it was released in 1983 in Japan. Namco got together with another game maker, Hudson Soft Co. (creator of Bomberman), to persuade Nintendo Co. to open its platform to outside software makers, according to Hisakazu Hirabayashi, an independent industry consultant.

Both were eager to be on Nintendo’s popular console, but Hudson couldn’t make its own cartridges, according to Hirabayashi. And so Namco proposed paying Nintendo a 10% licensing fee to be able to be on the console while Hudson paid an additional 20% for Nintendo to make its game cartridges. Nintendo agreed—and that two-component fee, licensing and manufacturing, became the basis of today’s 30% “tax.”

So let's all blame Nintendo for this mess!

 

[bushman4]

My iPhone is more important than any game. Most people will move on to other games Everybody loses out especially Epic which they’ll understand in a few months

 

[[AUT] Thomas]

Developers don’t make much money on Android so they need Apple. I would never buy Android. It will force Apple to make more and more APPS just like they did on the Mac.

😂 On which planet are you living? Apple is incapable of doing basic apps... On iOS the mail app is total joke, the iPad doesn't even have a calculator, iMessage feels like a messenger from 2010, still can't properly send 10+photos reliably and so on. And when they delivery something that is technically a low level achievement they celebrate it like they are the gods of software. Don't get me wrong, especially the HW department of Apple is delivering incredible things like their CPU and camera, but iOS apps... absolutely the opposite of incredible.
And "like they did on the mac" you mean cancel stuff like Aperture and claim how awesome Photos is? Yeah... no.
The post you quoted was right... if major apps where pulled from the app-store the iPhone would take a serious hit. Last but not least Apple can't code an App for service that doesn't have a public API.

This move is Epic just asking for others to join their revolt, which just isn't going to happen.

The Jerry McGuire memes got it right, except there won't be a happy ending for Epic.

A video game company is not going to topple a hardware, software, and services juggernaut.

Fair or not, this just isn't going to work.

I wouldn't be so sure about that. They are not going to win this in first place. That was clear from the beginning. However, and that worked very well, it showed how Apple actually responds, not theoretically, not in a hypotethic scenario but in the real world. Rest assured being refused to participate in significant market because you offer your own payment solution can and certainly will be used against Apple in the anti-competitive investigations.
EPIC really did those investigations a real favor. And that might have been all they wanted to achive. EPIC has enough cash to play the long game.

There are other stores, just buy a different phone.

Developers buying other phones for their customers so they can sell their software to them? That's what you are saying. Doesn't make sense though.

 

[daniesy]

I sincerely wish Apple would fork iOS... and allow all developers complaining about the percentage to have a lower one, but only operate on the current version of iOS... and let the rest get the benefits of all that development and advancement of future iOS development. Should not matter right, since you seem to think iOS development is crap and free to develop.

Why are you defending Apple here? iPhones cost about 200$ to make, the rest fund product development, iOS development, marketing and huge salaries for the managers. Besides this, every developer has to pay 100$ every year, even if they make a free app, or they're from poor countries, non profits or simply don't afford it. Other stores like Microsoft's ask for a one time fee. No, not greedy Apple. But wait, the greed doesn't stop here, they want a piece of every sale you make in your own app, that you build on your own time and effort. And not a small piece, a huge 30%. (After that developers still need to pay income taxes and employees.) You don't get to be a trillion dollar company by being charitable. Yet still, there are people defending Apple's every step, even if it's a bad one.

 

[hot-gril]

Why are you defending Apple here? iPhones cost about 200$ to make, the rest fund product development, iOS development, marketing and huge salaries for the managers. Besides this, every developer has to pay 100$ every year, even if they make a free app, or they're from poor countries, non profits or simply don't afford it. Other stores like Microsoft's ask for a one time fee. No, not greedy Apple. But wait, the greed doesn't stop here, they want a piece of every sale you make in your own app, that you build on your own time and effort. And not a small piece, a huge 30%. (After that developers still need to pay income taxes and employees.) You don't get to be a trillion dollar company by being charitable. Yet still, there are people defending Apple's every step, even if it's a bad one.

Nobody says Apple is a charity. I bought the phone cause it was worthwhile to me, end of story. Despite everything, their app market is healthier than on Android.

 

[SteveW928]

Why are you defending Apple here? ... And not a small piece, a huge 30%. (After that developers still need to pay income taxes and employees.) You don't get to be a trillion dollar company by being charitable. Yet still, there are people defending Apple's every step, even if it's a bad one.

I think people are defending Apple because Epic is clearly in the wrong, at least legally. Apple can run their business as they see fit and set the prices. Plus, the way Epic went about this was Epically lame.

But, I also think Apple is being really stupid in how they have handled this all along... and worse, they are now being pressured to do this by how they have setup their revenue model on the whole, in the eyes of Wall Street. I don't think this is good for Apple long-term.

But, there is a big difference between Apple being daft, and Epic having some kind of moral stand to make against Apple.

 

[hot-gril]

I think people are defending Apple because Epic is clearly in the wrong, at least legally. Apple can run their business as they see fit and set the prices. Plus, the way Epic went about this was Epically lame.

But, I also think Apple is being really stupid in how they have handled this all along... and worse, they are now being pressured to do this by how they have setup their revenue model on the whole, in the eyes of Wall Street. I don't think this is good for Apple long-term.

But, there is a big difference between Apple being daft, and Epic having some kind of moral stand to make against Apple.

Epic is trying to create a movement among 10-year-old gamers. I don't expect it to make much sense. Whatever, let em do it. MY movement is that when I have kids, they won't have video games. Epic waste of time.

 

[SteveW928]

Consoles are still just computers, like the iPhone and android phones are another form of computers. If people have an issue with the 30% cut that apple takes for being the platform, then they should be just as upset about the 30% cut Sony and Microsoft take on their platform. ...

Well, the real issue would be if the platform has a significant marketplace monopoly, and that monopoly is being abused to hurt the consumer. With gaming consoles, that just isn't the case. I suppose the best argument there might be price-fixing.

But, on the whole, one *might* start to be able to make the argument around Apple's overall importance and influence, now, in terms of our on-line life, work, etc. being significant enough that they shouldn't have this much control/influence. It's kind of a stretch at this point, I think.

But, the console analogy, I don't think is a great one.

 

[[AUT] Thomas]

It's because of the heavy disadvantage Google put Epic and other storemakers in. There are limitations in Android that favor the Play Store over other stores. And Epic even tried to preinstall the Epic Games Store on LG and OnePlus phones but Google stopped them. You can read their lawsuit, it's rather interesting.

Google heavily pressures OEMs... either they go all Play Store or lose their licenses.
Few people know that a significant reason why BlackBerry10 OS was discontinued and SailfishOS is strill struggling, is because Google doesn't like OEMs that are pushing Android VMs or Dual-Boot.

 

[mrcloaked]

I'm ready to go.

 

[Unregistered 4U]

I love how "fanboys" seem to think the best thing for Apple is to push away half their users and tell them to use Android or PC. Because that will help Apple in the end....

But, you see, IT WILL!

As soon as Apple’s marketshare in the US is reduced, then they no longer have a controlling position. My recommendation would be to limit the sales of the iPhone in the US to, say 5 million phones a year for 5 years. Since there will be a pent up market of MILLIONS that don’t want Android, but can’t buy iPhone, it should lead to new competitors entering the market and new App Stores. Then, let Apple re-enter the market fully.

it showed how Apple actually responds, not theoretically, not in a hypotethic scenario but in the real world.

The problem, I think, for Epic is that Apple responded in the way anyone that has ever entered into an agreement with someone else would respond. They’re showing that when you violate the terms of an agreement, there are consequences. Which, I mean, who’s not aware that actions have consequences? I mean, sure, those without fully formed prefrontal cortexes, but OTHER than them?

Epic is trying to create a movement among 10-year-old gamers.

Hmmmm

The rational part of a teen's brain isn't fully developed and won't be until age 25 or so.

In fact, recent research has found that adult and teen brains work differently. Adults think with the prefrontal cortex, the brain’s rational part. This is the part of the brain that responds to situations with good judgment and an awareness of long-term consequences. Teens process information with the amygdala. This is the emotional part.

Yes, I believe you’re right.

 

[Williesleg]

Doesn't China own half of Epic Games?
Wonder what the real deal is here.

 

[farewelwilliams]

While this is true, it’s not the same thing. Epic’s point is that at today’s standards, smartphones are almost a common commodity, like a computer, and therefore it should be treated like one. Smartphones are nothing more than portable computers and one should be able to choose to either purchase their apps in the App Store or directly from the publisher’s website. Consoles on the other hand are considered “luxury goods” and don’t perform the same tasks as computers (for the most part) therefore the expectations are different.

Here is a quote from Epic:
“There's a rationale for [the 30-percent fee] on console where there's enormous investment in hardware, often sold below cost, and marketing campaigns in broad partnership with publishers. But on open platforms, 30 percent is disproportionate to the cost of the services these stores perform, such as payment processing, download bandwidth, and customer service.”

https://www.google.com/amp/s/arstechnica.com/gaming/2020/08/as-epic-attacks-apple-and-google-it-ignores-the-same-problems-on-consoles/?amp=1

The console has a 10 year shelf life and therefore can be sold below cost initially. Today PS4/Xbox are profitable. Switch has been profitable since day 1 so at the very least Epic should sue Nintendo.

A phone can't be sold below cost initially because their shelf life is about a year, sometimes less than a year.

That rationale doesn't work.

 

[bb9]

With Fortnite currently banned from the App Store and Epic Games on the verge of having its Apple developer accounts terminated for violating App Store rules by rolling out its own payments system for in-game currency, Epic is hosting a #FreeFortnite Cup this Sunday for "one more Victory Royale with friends across all platforms."

Fortnite users who already have the game installed on their iOS devices are currently able to continue playing the game, but they will be "left behind" when Chapter 2 - Season 4 launches on August 27 as Epic won't be able to push the game update to those users.

As part of #FreeFortnite Cup, Epic is offering a host of prizes ranging from an in-game outfit and a physical "Free Fortnite" hat to hardware such as Alienware laptops, Samsung Galaxy Tab S7 tablets, OnePlus 8 phones, and Xbox One X and Nintendo Switch gaming systems.
Finally, Epic is sharing tips for iOS users worried about being unable to continue playing Fortnite, recommending that they make sure their game data is stored in their Epic accounts and investigate alternative Fortnite-compatible devices where they can simply pick up where they left off. For Android users, Epic notes that users can still install it through other means such as Samsung's Galaxy Store or sideloading, despite the game having also been pulled from the Google Play store.

Article Link: Epic Games Throwing a 'FreeFortnite Cup' Bash Before iOS Users Lose Access

If Epic can’t honor the contracts they signed with Apple, they sure as heck will not honor anything they want users to sign with them.

 

[cupcakes2000]

Why are you defending Apple here? iPhones cost about 200$ to make, the rest fund product development, iOS development, marketing and huge salaries for the managers. Besides this, every developer has to pay 100$ every year, even if they make a free app, or they're from poor countries, non profits or simply don't afford it. Other stores like Microsoft's ask for a one time fee. No, not greedy Apple. But wait, the greed doesn't stop here, they want a piece of every sale you make in your own app, that you build on your own time and effort. And not a small piece, a huge 30%. (After that developers still need to pay income taxes and employees.) You don't get to be a trillion dollar company by being charitable. Yet still, there are people defending Apple's every step, even if it's a bad one.

200 dollars hey? Im sure epic are eagerly awaiting the new iDaniesy phone with App Store.

 

[farewelwilliams]

Why are you defending Apple here? iPhones cost about 200$ to make, the rest fund product development, iOS development, marketing and huge salaries for the managers. Besides this, every developer has to pay 100$ every year, even if they make a free app, or they're from poor countries, non profits or simply don't afford it. Other stores like Microsoft's ask for a one time fee. No, not greedy Apple. But wait, the greed doesn't stop here, they want a piece of every sale you make in your own app, that you build on your own time and effort. And not a small piece, a huge 30%. (After that developers still need to pay income taxes and employees.) You don't get to be a trillion dollar company by being charitable. Yet still, there are people defending Apple's every step, even if it's a bad one.

$200 to make. Then there are distribution costs, return overhead, 1 year of support and warranty replacements, then 5 years of iOS updates, marketing, and free services like Apple Maps, Siri, Messages, FaceTime, and 5GB of iCloud storage for life. Generally those services are paid for by letting advertisers use your data, but Apple doesn't do any of that. A $399 iPhone SE alone barely makes Apple any money and it's Apple's way of betting that user will pay for other services as well as apps.

You have no idea how much of the 30% Apple reinvests in developers. Saying that either it's too much or too little is baseless.

 

[MacBH928]

Epic's 30% revenue is a dime in Apple's bucket, but guess what will happen to Epic's revenue report when they lose the 10s of millions of iOS users. And guess what happens to games like PUBG that people might switch to....

 

[[AUT] Thomas]

The problem, I think, for Epic is that Apple responded in the way anyone that has ever entered into an agreement with someone else would respond. They’re showing that when you violate the terms of an agreement, there are consequences. Which, I mean, who’s not aware that actions have consequences? I mean, sure, those without fully formed prefrontal cortexes, but OTHER than them?

Yes, that is absolutely correct. But part of the exercise is demonstrating that those T&C are anti-competitive and how Apple at their sole discretion can use their T&C to completely cut of developers from 50% of their customer base. Keep in mind that those developers might have heavily invested to launch an app, which Apple then refuses on the app-store.

 

[I7guy]

Yes, that is absolutely correct. But part of the exercise is demonstrating that those T&C are anti-competitive and how Apple at their sole discretion can use their T&C to completely cut of developers from 50% of their customer base. Keep in mind that those developers might have heavily invested to launch an app, which Apple then refuses on the app-store.

Apples' sole discretion on enforcing the rules is anti-competitive? Doesn't seem like that is the case. How many times has Apple refused an app into the store arbitrarily?

 

[sashavegas]

Consider this case:
Supposed i develop an app that cost $10, and uploaded it to store. Inside this app i sell something (goods, service, etc)
If i look to get Merchant Account (mid) from any other payment providers: PayPal buyout rate is 4-4.5%, Authorized.net Buyout rate is 3-3.5%. If i am in EU i can get MID( Merchant ID) even cheapper close to 2.5-2.7% from local PSP or bank. But i am forced to use Apple as payment service provider with Buyout rate 30%. I am ok, that everytime somebody purchanse my app for $10, apple gets $3, but in this case paying 30% buyout rate is very high and no way to change provider. As a result if i sell similar service that apple does, i am completly out of options

 

[psingh01]

Are you proposing to do away with free apps in your never ending quest to try to convince anyone and everyone that epic are correct?

Plenty of other industries take a 30% cut and more even. For a 50 yo you seem a little naive with this statement.

How is it apples problem that console manufacturers use this dubious business model of selling a product for less than cost and then relying on addons (games in this case) which you need to buy to use it, to make the money? How is it anyone else’s problem? How is it better or fairer?
An iPhone is priced at what it is. If it’s to high, don’t get it. But if you do buy it,you get free with it every basic app you need. Then, should you want something more, you can purchase additional apps at the curated and safe Appstore.
If you can’t see that difference then I don’t know what to tell you.

its not “apple’s problem” but its not a good comparison to say “well they charge xyz too”. They are really two separate types of products.

 

[SteveW928]

If Epic can’t honor the contracts they signed with Apple, they sure as heck will not honor anything they want users to sign with them.

Hmm, maybe some hacker can find a way to just bypass Epic's store and get all the in-game 'cash' for free. I'm sure Epic won't mind, because it was way overpriced anyway and should just be free. #EpicLogic

 

[jonblatho]

It’s funny to me people can’t understand Apple’s side. They are a business... Apple funds the R&D, designs the hardware, OS, App Store, runs the servers for the apps, markets the apps and some how are expected to do it for what? free, 1% 5% 10% 20%.

A device purchase should fund R&D (which includes hardware and software engineering), and the App Store really doesn't do much in the way of marketing for all but a tiny sliver of apps. Transfer does cost money, but I'm not exactly convinced that paid apps and those using IAP should have to subsidize free apps from massive companies like Facebook and Twitter that could easily afford to pay more. Especially for subscriptions, Apple's not doing much of anything beyond processing the payment and sending a receipt to the developer's server(s) for processing.

Like I've said in another post on this matter, it's not a binary situation where Apple gets 30% or nothing, and there exist a lot of entirely reasonable paths out of this that would satisfy both Epic (and other disenchanted developers) as well as Apple. Probably some combination of:

• Convert the Apple Developer Program annual fee to a graduated pricing model to make developers that use more pay more. Keep it at $99/yr for the first year for all developers, and go up from there based on app downloads, revenue, etc.
• Apple retains its position as the sole distributor of iOS apps, with some of the concessions below.
• Prevent sideloading of signed and notarized apps from the internet by default, but allow it as an option behind a warning. Continue to forbid the sideloading of unsigned and/or unnotarized apps.
• Reduce the paid app and/or IAP commissions to 10–15%, but do not allow other payment systems, so that small indie developers no longer have to prop up weekly 300 MB updates from Facebook.
• Allow developers to offer their own payment systems but only alongside IAP, never by themselves. Prices can vary between the two options within reason.
• Allow developers to use Apple Pay for non-physical goods and services.
• Independent arbitration is allowed for disputes that cannot be resolved through existing app review policy and processes.

Again, these are entirely reasonable steps that, when combined correctly, would make a lot of developers a lot happier while not significantly impacting Apple's bottom line and letting them put these issues to bed.

FWIW, Walmart is a terrible example to use to support an anti-monopoly argument.

Walmart is a massive market force, but it is nowhere near a monopoly.

 

[Piggie]

10 year olds around the country are in a panic.

Just to say, you may laugh and make fun at what a 10 year old feels.
But remember, a 10 year old, could be a future Apple customer for 60 70 more years of their life.
And their future family may also be potential customers.

You REALLY upset all 10 years old today, you don't have a business tomorrow.

 

[Realityck]

Doesn't China own half of Epic Games?
Wonder what the real deal is here.

There are a lot of companies that are based in China, do business with China, and vest in other companies. Likely Apple is partially owned by China with some percentage of common shares.
In this case you are talking about Tencent with is a tech conglomerate base in China.

In exchange for Tencent's help, Tencent acquired approximately 48.4% of Epic then issued share capital, equating to 40% of total Epic – inclusive of both stock and employee stock options, for $330 million in June 2012

Every game company that Tencent has invested in - PC Magazine