By Harold Rooke
Hey there, welcome back to Binghamton (or if you’re a new student, welcome to your new prison)! Since leaving for home early due to COVID-19, I’ve been a bit busy doing what I do best: gaming. Specifically, playing Fortnite. Yeah, I know, I can already hear you saying “Pffft, Fortnite is for ten-year olds!” What outrageous slander! Fortnite is for ten-year olds and me, thank you very much! Despite the criticism of many detractors, there is no denying the cultural phenomenon that is Fortnite; receiving nearly 350 million players in May of 2020, the three year old game is still continuing to maintain its dominance over the virtual world. Combine this with fast-paced, competitive gameplay in the Battle Royal mode, a simplistic yet cartoonish art style, and the upfront price being free, and you get a game that is more addictive than crack. Through selling a virtual currency called “V-Bucks”, Epic Games, the developers behind the game, have made an estimated $1.8 billion by the end of 2019. Of course, part of this success owes to the fact that the game itself is platformed on multiple devices, ranging from Xbox One to the PlayStation 4 to, of course, Apple iOS devices. Personally, I don’t really care that much about the juggernaut this game has become; I’m just playing to have fun. So, imagine my confusion when, on August 13th, 2020, as I load up another game one day, I am given a 1984 parody trailer made by Fortnite, announcing that they have “defied the Apple Store Monopoly”. What’s that all about? How will the game be affected? And what will this mean for the future of Fortnite?
Before we begin, we should first establish some background on Apple’s services. On Apple’s iOS devices, developers are able to advertise and sell their apps via the official App Store. Although the App Store itself acts as a free marketplace of sorts, Apple Inc. manages the platform as a middleman between the consumer and the app developers. Because of this, Apple allows developers to utilize the platform in exchange for a cut of the profits; for every app purchased on the App Store, 30% of the proceeds go to Apple itself, with the remainder going to the developers. This also translates into In-App purchases, which serve as a revenue generator for many free-to-play games. Cue Fortnite and, by extension, their developers, Epic Games. Certainly a large corporation in its own right, Epic’s smash hit was no exception to what they allege as a “tax” of monopolistic proportions, with V-Bucks being subjected to their 30% cut. As you may guess, Epic Games was just a tiny bit miffed. So miffed, in fact, that they started to hatch a plan. An arguably underhanded and devious plan. But first, they’d need some help; to be in the best position possible to take down Apple, they’d need to hire the best lawyers money could buy. To do this, Epic hired Cravath, Swaine and Moore LLP, literally named the best corporate lawyer litigation team in 2017. At the helm of this crack team lay perhaps the most competent attorney in all of the United States: Christine A. Varney. Not only was she an official in both the Clinton and Obama administrations, but Varney is also an antitrust specialist, having experience in breaking up monopolistic practices. Having already prepared their preemptive lawsuit, Epic then set about the next phase of their plan, being the open violation of the 30% “tax”. To accomplish this, Fortnite received an update on August 13th for iOS devices to directly undermine their adversary; instead of having to purchase V-Bucks through Apple, Fortnite had a direct payment, with an additional discounted price to boot. Obviously, this violated Apple’s store policy, with the game quickly being removed from the App Store, but for Apple it was too late. This removal resulted in the release of the prepared trailer for the lawsuit (ironically parodying Apple’s own 1984 trailer for the MacIntosh) along with its legal documents. Although Epic Games filed the lawsuit, the motion for the case isn’t seeking damage compensation itself, but rather injunctive relief. To simplify, Epic Games isn’t suing on behalf of itself, but rather to change Apple’s practices on behalf of all app developers.
The premise of the lawsuit revolves around the idea of a free, competitive market, which Epic claims Apple has stifled through their practices. This is primarily due to two facts: firstly, that the App Store is the only platform available on the market, run by Apple, and secondly, that there is no non-iOS alternative, making Apple have a virtual monopoly. Is this really the case though? In practice, and when taking into consideration additional facts, it certainly seems so, or, at the very least, Apple has de facto monopolistic power. The first fact to consider is the market to which App developers have access to: nearly 1.5 billion devices (including both iPhones and Macs) are currently active in the world. Considering that App developers only have access to this audience on iOS devices, and that there is no real competing alternative outside of Google (who are also being sued by Epic), the case for a de facto monopoly hindering the free market is strong. Another fact to take into account is the amount of money being taken from app developers; nearly 30% of all revenue generated from the sale of an app goes directly to the middleman, Apple. To put this into perspective, electronic payments made through other similar services, such as PayPal or Stripe, only take a 3% slice of the total profit. The last point of consideration is how this ultimately affects the consumer. Truly free markets necessitate competition to allow what were once considered luxury goods to be affordable to the average consumer; corporatism, or formation of monopolies, negates this. Economically speaking, Fortnite’s V-Bucks being upcharge beyond their value is an example of this. For consumers on the App Store, this 30% upcharge not only affects developers, but by consequence can result in higher prices for the consumer. Thinking of the App Store as a complex ecosystem of economies of scale, it can safely be stated that Apple practices aren’t exactly consumer friendly.
With all this stated, what’s going to happen to Fortnite? As of the time writing this article, Fortnite on iOS devices is in a state of limbo. Although those that have the game already downloaded on their phones as apps can still access it, Fortnite is no longer featured on the App Store. However, it is still possible to download updates, and those that already have the game are still able to access matches. Of course, creating a sudden scarcity of Fortnite on iOS devices has led consumers to, of course, panic. Think what happened when Flappy Bird was removed from the App Store, but on steroids. This can best be seen on eBay, where the markups for pre-downloaded Fortnite apps have been ridiculously high, with prices as much as $4,000, according to Forbes. You would also be forced to use the seller’s own Apple account, and there are other devices that you can play Fortnite on, but petty ideas such as logic have not stopped buyers. Until the conclusion of this legal battle, it is likely that this practice will continue. There has also been a massive publicity campaign launched by Epic Games to win public support for their lawsuit. The 198-Fortnite trailer is the most obvious example of this, perfectly casting Apple as the villain in the public’s eyes. Of course, this also neglects to mention the premeditated nature of the lawsuit, but, to be fair, Epic Games isn’t seeking damages. Currently, those supporting Fortnite in their battle have been using the hashtag #freefortnite, which exploded on Twitter following Epic Games’ announcement. For their part, Epic Games has also received public support from other companies and app developers, with Spotify and Match Group being the most notable proponents for the lawsuit, according to MarketWatch. As of right now, the judge presiding over the case, Yvonne Gonzalez Rogers, ordered a temporary restraining order for Epic Games, meaning that Apple is unable to remove Epic Games as a developer from their storefront, yet also affirmed Apple’s right to remove Fortnite from stores, for the time being. For all intents and purposes, Fortnite is temporarily quarantined from the App Store.
There is much to be said about what the future holds for Epic Games and, by extension, Fortnite. Although at first this may seem like a minor case–one popular game banned due to the developers refusing to follow Apple’s guidelines–the implications can be far reaching. The fact that Epic Games is advocating that Apple’s practices constitute monopolistic powers should be an indication that this may potentially alter the electronic free market. This, in conjunction to the superb team assembled by Epic, the publicity stunts pulled to bring over consumers to their side, and the general practices by Apple, could mean that this case has some weight to it. However, deciding this case will likely take years, meaning that this state of limbo for Fortnite could also be its gravestone, at least on iOS devices. Indeed, Apple could potentially make the case that the preemptive nature of Epic Games openly violating contract is in itself illegal, making their case all for naught. Of course, this is just my speculation, though I do maintain hope that this case will serve to expand the free market and the rights of consumers. Regardless of the decision, the case is sure to bring about…ORANGE JUSTICE! What, not funny? Whatever, I’m going back to playing Fortnite with all the other ten-year-olds!