The Fortnite competition is going way beyond the game.
First, Epic Games, the publisher of the popular online video game, introduced a direct payment option for mobile players – sidestepping the Apple App store and Google Play store payment methods, which nets each of those tech giants a cut of the revenue.
Apple and Google, subsequently, pulled the mobile game from their stores. Epic Games’ answer? Suits filed against both companies describing each one’s app store as anti-competitive and monopolistic.
How the confrontation plays out has massive implications for how – and who – consumers pay for apps such as games and streaming entertainment. “This is a big deal,” said Michael Pachter, an analyst with Wedbush Securities, in a note to investors. “Epic is challenging Apple’s (and Google’s) pricing within their stores and offering an alternative for users to get the same thing at a lower price.”
What is the argument?
Founded in 1991, Epic Games is well-known as the publisher of games such as Unreal, Gears of War and Infinity Blade, as well as the Unreal Engine, which powers countless video games from Batman Arkham Asylum to Sea of Thieves.
Its free-to-play game Fortnite, released in September 2017, has become a hit with 350 million players across multiple gaming platforms including video game consoles, PCs, and Android and iOS smartphones and tablets. The game generated an estimated $2.4 billion in revenue in 2018 and $1.8 billion in 2019, according to SuperData, a Nielsen company. Fortnite is free to play, but you can buy in-game currency called V-Bucks which is used to purchase new weapons, customized outfits and dances, or emotes, for their in-game personas. When players on Apple and Android devices spend, Apple and Google get a 30% cut of those sales.
Epic Games CEO Tim Sweeney has argued that the online marketplaces that sell games – Apple’s App Store, the Google Play store and Valve’s PC game store Steam –take an unfair cut from game sales and in-game transactions. Its new mobile payment system for Fortnite players on Android and iOS devices gives players a discount compared to buying through the Apple and Google apps. As of Thursday, players could choose to purchase 1,000 V-Bucks directly from Epic Games for $7.99 – the same price as on PCs or home video game consoles. Through Apple’s App Store and Google Play, the same purchase costs $9.99.