Epic wins 1, loses 1 in Apple Fight
Epic games and Apple (NASDAQ: AAPL) are embroiled in an escalating legal dispute Fortnite and Epic’s efforts to bypass the 30% reduction in all digital sales from the App Store. After kicking the massively popular Battle Royale game from the App Store earlier this month, Apple fired back by threatens to end Epic’s developer account, depriving it of the tools necessary for the maintenance and development of Unreal Engine.
The ripple effects of such a move cannot be underestimated, as it could cripple Epic’s core business and hurt content creators across many industries. Epic has requested a restraining order, and the court this week split the difference.
Federal judge Yvonne Gonzalez Rogers ruled that Apple can keep Fortnite out of the App Store, a big blow to Epic. It was clear from the start that Epic has been prepared when he launched his assault, and that rang him in the court decision. Epic voluntarily activated the direct payment system at the heart of the litigation, knowing full well that it was in violation of App Store guidelines.
“The current situation appears on its own initiative,” noted Gonzalez Rogers, while adding that Epic Games “has strategically chosen to break its agreements with Apple.” Additionally, Epic could easily turn off the direct payment system to restore compliance as the case progresses through the courts. Epic CEO Tim Sweeney recently shared emails to Cupertino tech giant senior management, openly informing what was to come while acknowledging that Epic would violate guidelines.
“I am writing to tell you that Epic will no longer adhere to Apple’s payment processing restrictions,” Sweeney wrote. Today, Epic is launching Epic Direct Payments in Fortnite on iOS, giving customers the choice of paying through the app through Epic Direct Payments or Apple Payments, and passing savings from Epic Direct Payments to customers under the form of lower price. “
Sorry, Fortnite fans, but the game won’t be returning to iOS anytime soon.
Gonzalez Rogers sided with Epic regarding its global developer account, agreeing that such termination could devastate Epic. Developer license agreements are separate from App Store guidelines, and Epic does not appear to have violated those agreements, in the judge’s opinion.
Third-party developers who use Macs to work on Unreal Engine would be caught in the crossfire, jeopardizing ongoing projects, especially as Apple prepares to release major operating system updates within months. .
In a hearing preceding the formal ruling, lawyers for Epic said developers were “already shunning Unreal Engine” because of the new risks. This is good news for Epic’s rival Unity Software, which is prepare your own IPO.
The damage to Unreal Engine would spread throughout the gaming industry, hurting both developers and gamers. “Epic Games and Apple are free to continue, but their dispute should not wreak havoc on passers-by,” Gonzalez Rogers concluded.
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