Epic vs Apple: What to Expect?

 
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Job Title:Sarcastic Architect
Hobbies:Thinking Aloud, Arguing with Managers, Annoying HRs,
Calling a Spade a Spade, Keeping Tongue in Cheek
 
 
Epic Fail attacking Pigs with Apple

With the ongoing Epic-vs-Apple battle, there is one Big Question: what does it mean to developers? Not from the point of view of “hey, it would be really nice to bring Apple fees down”, but from the point of view “whether it changes much for gamedevs – or we should continue ‘business as usual’?”

Timeline and Scope

A refresher course on the major events in the battle:

  • Aug 13 – Epic introduces direct payment into Fortnite/iOS and Fortnite/Android
    • Apple and Google remove Fortnite from App Store and Play Store respectively
  • Aug 17 – Apple threatens to terminate all Epic’s developer accounts, including an account of Epic International (the one used for the development of Unreal Engine).
  • Aug 24 – judge Yvonne Gonzalez Rogers grants Epic a Temporary Restraining Order (TRO) which prevents Apple from terminating the account of Epic International (and doesn’t grant a TRO to force Apple to get Fortnite back to the App Store)
  • Aug 28 – Apple terminates developer account of Epic Games, but keeps account of Epic International.

And to emphasize what’s at stake – Fortnite has already made $1.2 billion(!) in sales – with 30% of it (~$360 million) going to Apple. Pretty neat amounts, huh?

What Has Happened?

Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.

— Sun Tzu —

Overall, an attack by Epic reminded me of an early-20-century cavalry attack against a heavily entrenched position armed with machine guns. In such an attack, there are only two options: either you scare your opponent and it runs away, or they fight and you lose. However, as it is known at least since Byzantine military manuals, if the opponent doesn’t have where to run – they won’t run away. And Apple didn’t have where to run in this case – so it stood its ground and fought back, with devastating results for Epic’s attacking force.

In general, one should not try to mount such attacks without some big and heavy ace up their sleeve. For several days, I did expect that Epic does have such an ace – for example, if Epic could produce a browser-based version of the Fortnite – the tables would be turned. Players would be able to play on iOS – and Epic would be 100% free from breaching any agreements with Apple; moreover, as such a game would have worse graphics on iOS – it would make things worse for Apple, and not for Epic (iPhone would be at a disadvantage compared to Android, drats and double-drats for Apple!). Under such a scenario, Apple would be in a zugzwang – with any potential move of Apple making its situation worse. Unfortunately, for quite some time Epic didn’t treat an HTML5-based version of UE as a first-class citizen; combined with an observation that the best time to show it has already passed – I doubt Epic has an HTML5-based version ready.

Current Situation

From a legal perspective, the situation will most likely go along the lines of the decision of Yvonne Gonzalez Rogers:

  • obtaining a court order to force Apple to bring Fortnite back is not going to happen any time soon
    • willful breach of contract is a pretty bad thing to do, and judges tend to dislike it
    • in addition, an argument that Epic can fix the whole thing by complying with Apple’s requirements – looks strong in the context of TROs and preliminary injunctions (to get a TRO, Epic has to demonstrate irreparable harm, and given a simple way to fix the problem now and get compensation later if they prevail in court – irreparable harm becomes next-to-impossible to establish).
    • note that the antitrust case against Apple may still have its merits – it is just that these things tend to take forever and ever, so for the next 5 years or so it won’t be decided
  •  Apple is likely to be prohibited from terminating developer access for Epic International (so Epic can continue to develop Unreal Engine on iOS)
    • Epic International did NOT breach any contracts
    • Apple’s argument along the lines of “we always terminate linked accounts” is quite ridiculous – and is unlikely to fly.
    • additionally, terminating Epic International access is hurting innocent bystanders (devs who are using Unreal Engine)

Given this, the current situation goes as follows:

  • every day of Fortnite being unavailable on iOS, Epic loses a whole lot of money
    • Apple also loses money (and audience) – but Epic loses much more, especially in terms of percentage of their business
  • if Epic does nothing, it is NOT going to change any time soon
    • even if in 5 years Epic wins an antitrust case, it will be too late for Fortnite

Opponent Options and Strategies

Retreat and Regroup After Aug 13 Attack

Apple won a battle, but not the war

— No Bugs Hare —

Now, let’s speculate on the options available to the belligerents. For Apple, the strategy is obvious: just sit there and watch your opponent bleeding out. On the other hand, Apple, being deeply entrenched, doesn’t have many options to move either; not that they need such options now – but if the situation changes, it can become their major disadvantage.

As for the Epic, at least the following seems sensible (that is IF they want to continue this fight):

  • Epic’s cavalry attack didn’t succeed, so if Epic doesn’t have any aces up their sleeves, they have to retreat, saving all the troops they can possibly save, and think about their next attack. To complete the analogy, deeply entrenched Apple won’t be able to pursue them.
  • Assuming that Epic does NOT have any aces up their sleeves:
    • Epic HAS to take Apple’s offer to remove the offending code – and Fortnite will be reinstated, so Epic will cut their losses before it is too late
      • If Apple doesn’t honor its own offer after saying it in court documents – it will be a Very Bad Move(tm) by Apple, so it won’t happen.
    • Epic MAY want to establish something along the lines of “association of iOS developers”, aiming to provide legal resources those disgruntled developers who have their accounts terminated, in their legal disputes with Apple.
      • Per se, it won’t tilt the balance of the war, BUT – it will tie some valuable resources on Apple’s side, so they have to fight on a multitude of fronts.
      • As an additional benefit – it will help to freeze existing guidelines (initiating legal action as soon as Apple tries to change them) – and these guidelines are rather favorable for devs now
        • In particular, section 3.1.3(b) Multiplatform Services says: “Apps that operate across multiple platforms may allow users to access content, subscriptions, or features they have acquired in your app on other platforms or your web site, including consumable items in multiplatform games, provided those items are also available as in-app purchases within the app. You must not directly or indirectly target iOS users to use a purchasing method other than in-app purchase, and your general communications about other purchasing methods must not discourage use of in-app purchase.”
    • Epic MAY try to rely on the section 3.1.3(b) to provide V-bucks purchases via their web site (and at lower cost).
      • If Apple argues it violates guidelines – well, it will become a very interesting case (IANAL, but as I see it – it is explicitly permitted under the clause above, and word-of-mouth/forums/social-networks will get the message about lower-prices-via-web through very quickly without any need for Epic to “target iOS users” or to “discourage use of in-app purchase”).
        • Of course, Epic has to be double-plus-extra-careful to avoid doing anything which enables Apple to claim it “targets iOS users”. Still, plain selling V-Bucks seems to be explicitly allowed, so if there is nothing else – Apple’s chances to claim a violation successfully, seem to be slim.
      • Any attempt to change this clause will likely get Apple into trouble (it will become a strong argument in an anti-trust case, with a healthy chance for injunction).
    • To have a nuclear weapon, Epic MAY try to make an HTML5-based version of the Fortnite ASAP. If it happens (using ANY browser – Chrome for iOS will do too) – it will become a game-changer:
      • Apple won’t be able to do anything about it, losing all control and all the leverage over the game.
        • If Apple does anything to prevent it from working in any shape (including “inadvertent” problems with wasm which has already happened in the past) – it will get into deep trouble.
      • According to section 3.1.3(b) above, purchases of V-bucks made within HTML5 game, are ok to be used within the iOS game (sic!)
      • An alternative would be to work with some browser manufacturer to make sure there is at least one UE-friendly browser out there; after all, Apple won’t be able to ban a browser merely for wasm and WebGL being first-class citizens.

What Does it Mean for Devs

Leaving strategic exercises aside, let’s see the things from dev’s point of view. There are basically two major scenarios:

  1. Epic does NOT budge and does NOT change the code to have Fortnite reinstated.
    • Even in this case, I see the chances for Apple succeeding in their bid to close the development account for Epic International as slim ; see decision by Yvonne Gonzalez Rogers and reasoning behind – I think it is likely to stand.
    • OTOH, Epic will keep losing money (and reputation), and the future of the Unreal Engine will become not-so-certain.
  2. Epic does change the code to reinstate Fortnite.
    • it pretty much brings the situation back to the pre-August-13 state.
    • for us as devs, it does NOT matter if Epic gives up, or mounts the second attack (along the lines above or any other). In this case, we can be reasonably sure that the Unreal Engine will stay with us for years to come.

Overall, if Epic will play it safe and make changes necessary to re-instate Fortnite (while keeping an option to come after Apple later) – I don’t see any reason for developers to flee Unreal Engine. However, if Epic is stubborn enough on this issue, it may have lots of difficult-to-predict repercussions over the whole gamedev ecosystem.

DISCLAIMER: all the above is pure speculation, and may or may not happen in real life. 

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Acknowledgement

Cartoons by Sergey GordeevIRL from Gordeev Animation Graphics, Prague.

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Comments

  1. P. Chaintreuil says

    Totally ignores that a Government behemoth may come over the horizon and decide that Apple is an Anti-Trust issue. This lawsuit gives that government something to point at as a material harm, and that Apple won’t adjust to anything but government intervention.

    • "No Bugs" Hare says

      As it is already mentioned in the OP – “note that the antitrust case against Apple may still have its merits – it is just that these things tend to take forever and ever, so for the next 5 years or so it won’t be decided”, and “even if in 5 years Epic wins an antitrust case, it will be too late for Fortnite”.

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