Epic Games VS Apple: Highlights From Week One Trial

While the second week of the trial is about to begin, we invite you to know the progress of this one so far.

This week’s media landscape was largely influenced by one of the most significant legal events in the gaming industry in recent years. Indeed, the lawsuit between Epic Games and Apple has started. In this file, we offer you a summary of all the highlights of this first week of trial which ended on Thursday, May 6, while the second week is about to start.

To remind you of the context of this trial, we have to go back to August 2020. At that point, Epic Games released a new update to Fortnite on all its platforms. However, on the mobile version, a small change appeals to the players. The game now offers them to pay for their purchases either directly to Epic Games, or through the App Store, which has the effect of increasing the price of the purchase in question. Apple immediately reacted to the situation, realizing very quickly that Epic Games had circumvented the rules of the App Store by offering direct purchases and thus avoid paying the commission.

Since, Fortnite disappeared from the App Store, and Epic Games sued Apple for anti-competitive practices. After months of preparation for both parties, the trial was finally opened on Monday, May 3, and for a period of three weeks. In total, more than a hundred documents were collected by the two parties. This is a trial without a jury, so the goal is to convince the judge.

A chaotic and introductory first day

The very first day of the lawsuit between Apple and Epic Games did not go as expected for both parties. Indeed, this one took several tens of minutes of delay following a “Technical incident”. This incident was actually linked to an open telephone line that allowed anyone to listen to the trial. However, not all lines could be silenced immediately, which resulted in hundreds of children chanting the Epic Games catchphrase throughout the court ” Free Fortnite “. It had indeed been used in an advertising spot following the ban of the game from the Apple Store in an atmosphere inspired by 1984 of George Orwell.

After this incident, the first verbal games could take place. Tim Sweeney, CEO of Epic Games, once again said that Apple is behaving anti-competitive and forcing a monopoly on its devices. He even went so far as to say that Apple makes more money selling apps than the developers of them.

For its part, Apple defended itself by recalling that the 30% commission is indeed based on the financial standards of the industry. However, they look bad compared to the 12% commission that Epic Games takes with its Epic Games Store on PC. If this figure is this high, Apple explains that its closed ecosystem gives its users more security and more performance. The company even specified that “ we don’t want to be android ».

What we learned about how the video game industry works

Thanks to the numerous documents filed by the two parties, we were able to learn a lot about the operation of these two companies, but also of the entire video game industry. We could see behind the scenes as regards the financial part. For example, very early in the trial it was revealed that Fortnite is Epic Games’ goose that lays golden eggs. Despite its operation of the Epic Games Store, or its other franchises, Fortnite remains the company’s biggest breadwinner with more than 9 billion dollars in revenue generated in two years. However, the iOS version only accounts for 7% of these revenues, one of the smallest parts, the largest going to the version. PlayStation which represents 46.8% of these sales.

For its part, it is estimated that Apple would generate nearly 78% of margin thanks to the App Store. It was also revealed that the App Store generated almost twice as much as what Steve Jobs estimated in his early years. This shows how extremely important the App Store is to Apple in terms of revenue.

In other documents, namely emails, it was disclosed that Apple was planning to lower its commission rate since 2011. However, the company never did. This particular evidence could call into question Apple’s good faith regarding its current rate of 30% since the company itself has said this situation could not last. Is it an admission that the commission is therefore too high, as Epic Games points out?

Consoles and mobiles: competitors or not?

The big debate that animated the last two days of this week involved the entire video game industry through two different angles: console manufacturers and mobile manufacturers. Tim Sweeney has always wanted to separate the two spheres and this long before the trial. However, Apple is not of the same opinion since the company accuses Epic Games of not having brought a lawsuit against Sony or Microsoft for the same reason since their commissions are exactly the same as Apple’s. Epic Games defended itself by explaining that the mobile and console fields are intrinsically different because the consoles have a much more sophisticated and much more expensive hardware part. Additionally, Apple noted that Sony’s ecosystem with PlayStation is much more closed than the iOS ecosystem. Apple claims the fact that Sony seeks compensation for acts of cross-play and cross-buy, which Apple does not do.

If Tim Sweeney confirmed this information during the trial, the CEO had more than one trick up his sleeve to overcome Apple. Lori Wright, who represents Microsoft for Epic Games, said the company absolutely does not view Apple as a competitor in gaming. Indeed, according to her, players on consoles have a parallel phone anyway, which means that one does not substitute for the other as they do not perform the same primary functions. This testimonial has helped Epic Games since it means that revenue on one platform is not a substitute for that of another.

Cloud gaming challenged

Aashish Patel, who works at Nvidia, meanwhile referred to the fact that Fortnite could return to iOS in October, via the cloud gaming service GeForce Now. This news has also raised other questions and debates around cloud gaming. Indeed, it seems that Apple is putting obstacles in the way of cloud gaming services on its store since they must offer each game independently, unlike video streaming services which can offer all their films and series in the same place. This is why GeForce Now or even Microsoft’s xCloud are accessible via internet browsers and not thanks to a native application.

However, and despite all its arguments, it seems that Epic Games is struggling to prove the anti-competition facts according to the experts. It only remains to see how this second week of trial will go for both parties.

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