By Aron Solomon
Late last week, a court handed Apple a bunch of small victories, while handing Epic, maker of the insanely popular Fortnite, a big one.
Here is the epic Epic press release they never wrote:
Dear Gaming Community,
We are your gods.
While no one thought anyone could compel Apple to change their AppStore model, we did, with a little help from the courts.
Our historic victory against Apple in the part of our court battle most relevant to you is going to bring big changes in how you can buy games.
It’s going to mean more competitive pricing and an energized game development community the likes of which you’ve never seen.
Strap in. Things are going to get fun.
Your friends at Epic
Instead, we got milquetoast and a very ill-considered appeal.
Pay your PR people, friends.
Epic’s win here is huge. On Friday, in Epic v. Apple, which I previewed just a few weeks ago, a judge ordered that Apple must allow other forms of in-app purchases. In this case, it’s not only the main legal issue, it’s the holy grail in Epic’s relationship with their end users.
More granularly, the opinion from Judge Yvonne González Rogers of the United States District Court for Northern California, held that, contrary to Epic’s assertions, Apple had not created a monopoly in with its operating system (iOS) or its in-app purchasing system. As a result, Epic was ordered to pay damages to Apple for violating its developer agreement with Fortnite, which it obviously and intentionally did to create a cause of action for this case.
But the real kicker is that the judge ordered Apple to drop all of its policies that ban all developers, such as Epic, from telling users about alternatives to Apple’s in-app purchase system. Like going to their site to make the purchase.
Sure, Apple won the vast, vast majority of issues Epic tried to bring up, but the vast majority of those were long shots – they existed simply to get the bigger issues to court. Also sure, it’s true that Epic’s endgame has always been to run their own store on iOS, so of course they see this as a loss. But it’s a relatively minor one and it absolutely should not be communicated as a loss to their customers, as Epic has shortsightedly need doing since Friday.
If Epic’s actual position is that they won’t be satisfied until a judge rules that Apple is a monopoly, and must allow Third Party App Store, they are going to be sadly disappointed for a very long time.
But viewed in its totality, is Epic or Apple the biggest winner in this legal battle royale?
No. It’s Stripe, who wasn’t even a party to the case.
With Apple set to do over $250B in revenue from the AppStore in 2022, consumers being legally able to pay for AppStore purchasers on the game developer’s site is a massive boon for Stripe, who will facilitate these purchases. While Apple has been taking a 30% cut of sales transacted through the AppStore, Stripe will take 3% of sales transacted in the developer’s site.
How the other 27% gets divided up remains to be seen. But with that kind of profit margin out of Apple’s pocket and now in play, the potential winners include Epic (obviously) and the consumer. Maybe Epic can even invest in better PR.