Why the Fornite / Apple war is BIGGER than you think
So I don’t usually cover news type topics but this recent development is huge, much bigger than most people think so I had to make a video on it. It revolves around Apple and Google banning on the most popular games in the world, Fortnite. But this has much bigger implications than just for that one game, and here I’ll break it down for you.
If you'd like to see the video breakdown, check it out here:
##So what happened?
Well since the first days of iPhone and Android, both Apple and Google respectively put a number of restrictions on apps being developed for their devices, which they claim is for safety and keeping good quality apps on their stores.
One of those rules is that any in-app-purchases have to go through Apple/Google’s own payment system. While this does theoretically help protect consumers making purchases, there’s a big catch – they take a 30% cut of all sales.
With Apple announcing the App Store had sales of $50 billion in 2019, that 30% means it generated $15 billion in revenue for Apple.
The latest controversy kicked off when Epic implemented a “permanent discount” yesterday on the V-Bucks digital currency used within Fortnite, for purchasing skins and other virtual goods. The roughly 20 percent discount was made possible because Epic Games implemented its own in-app payment process within Fortnite on iOS and Android, blatantly falling foul of that rule I mentioned in the Google and Apple app store guidelines.
Obviously Apple almost instantaneously kicked Fortnite off the App Store, and Google followed suit a little while later.
Why is this so big?
Well it’s not just Fortnite that have complained about this 30% fee, which they see as a Monopoly – many other developers have been annoyed by it. But none have tried taking Apple or Google to war over it.
Have you ever wondered why Spotify won’t let you sign up in the app, instead telling you you have to use a browser? That’s because even a huge company like Spotify wouldn’t dare try and fight this war. Even Facebook, who’s games in the browser app generate a fair amount of revenue, haven’t enabled all games in the app because they’d have to meet these payment rules.
If Facebook and Spotify won’t take on Apple or Google, does Fortnite really stand a chance? We’ll see.
What’s interesting to me is how Fortnite are focusing on Apple
They clearly knew this ban would come, because within hours of it happening, multiple lawsuits were filed, and they released a parody video of Apple’s “1984” theme Macintosh launch. (I’ll put the video at the end of this one for you to watch). The original Macintosh commercial was designed to portray IBM as a monopolising totalitarian company.
Epic Games claim “Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation,”
This is probably due to two factors, firstly Google have essentially copied all Apple did with their App Store, so Apple really set the precedent here. Secondly it is possible to side load apps on to Android without using the Play store, as Google call it an “Open Ecosystem” – Although the majority of people won’t know how or want to do this. Apple are a lot stricter about the use of their App Store.
So what if Fortnite wins? Well if it does, this is huge news for Software Developers..
Forrtnite must expect to win any lawsuits, else they wouldn’t risk all the lost income during the time when players can’t play the game. At a $17BN valuation, they can afford to take on Apple though, and winning might mean Apple cutting that 30% fee or even having to allow other payment options. This would mean that smaller developers or game studios, putting out apps that just generate a side income or perhaps fund their small business would suddenly see a jump in income.
But would that mean a risk of security vulnerabilities in taking payments? Would scammers try and take advantage of this new feature? Well, we can only wait and see, but I predict this will not be a quick resolution, Apple and then Google will fight this tooth-and-nail.