On May 3, the court trial of the much anticipated Epic Games vs. Apple case will commence but in the interim, the court records reveal that Epic Games went after Apple and Google to revive interest in the waning popularity of its posted multiplayer mobile game ‘Fortnite’. The Wall Street Journal reports that after revenues of Fortnite in-app purchases had reduced drastically in early 2020, Epic Games planned to introduce third-party content on the gaming app and decided to attack Apple App Store 30% commission rate to compensate its partners.
Last year in August, Epic Games released a controversial ‘direct payment’ update on Fortnite iOS and Android apps which denied Apple and Google’s share cut by allowing players to directly pay Epic for in-app purchases at discounted prices. Immediately after, the app was removed from both app stores for violating the terms of the agreement and Epic Games filed lawsuits against Apple and Google accusing them of creating a monopoly. Since then, Epic has begun a social media and PR campaign #FreeFortnite to gain public support and pressure Apple to agree to its terms.
Court records reveal that Epic Games wanted to cut Apple’s 30% commission to pay for third-party content on Fortnite
The recent court proceedings reveal that Epic CEO, Tim Sweeney’s dispute with Apple is centered around removing the obstacles from the way of turning Fortnite into a metaverse, “a shared virtual world where people might one day live, work and hang out.” And the Cupertino tech giant was perceived as “the central roadblock to that vision” because of its “tight control over how people access “Fortnite” and any other mobile apps from Epic. Apple’s App Store takes a 30% cut of Epic’s revenue from those users.” Therefore, the well-planned Project Liberty was launched to pressurize the iPhone maker to bend rules for Epic.
Having said that, it is found that the reason for deliberately starting a legal battle with Apple was more deep-rooted than just Sweeney’s vision for Fortnite; it was to save capital to invest in new content to rekindle players’ interest in the game.
By early 2020, “Fortnite” was showing signs of aging, although popularity for online games can sometimes ebb and flow due to new seasons or features. The privately held company doesn’t disclose financial records but app-analytics firm Sensor Tower Inc. estimates global consumer spending within “Fortnite” on Apple devices had fallen in the first quarter of last year to $70 million from a peak of almost $180 million in the third quarter of 2018. Epic Chief Financial Officer Joe Babcock, who departed the company in early 2020, said it expected the trend to continue, according to a deposition he gave cited by Apple. Mr. Babock couldn’t be reached for comment.
Earlier this month, Apple has submitted a voluminous filing reiterating the allegation that “Epic had planned the antitrust lawsuit for months in advance in an effort to draw attention to “Fortnite.”
Although Epic Games has denied claims of receding Fortnite’s popularity, it is reported that the developer planned to hold the existing and attract new players by offering fresh content from third-party developers and making Fortnite an open platform. And Apple’s 30% commission rate was the biggest hurdle in generating revenue to fund the plan.
Epic hatched a plan, according to court records citing a board presentation, to revive interest in “Fortnite” beyond its seasonal updates and occasional music performances and movie screenings that people experience together in a virtual setting. Epic would turn to third-party developers to create new content for “Fortnite,” essentially turning it into an open platform unto itself.
But for this new plan to work, the company needed to find a way it could afford to compensate its would-be partners. Apple’s 30% share, the presentation concluded, was an “existential issue” for its plan and needed to be cut so Epic could share a majority of the profit with creators.
The report states that the developer’s main objective is to create public pressure to force Apple into compliance.
The Epic team concluded that Apple could be thin skinned when it came to its public image. “Nothing moves Apple to change other than notable consumer pressure,” an Epic memo noted.