Apple Removes Fortnite From Apple App Store Following Fee Dispute

Post by: Rick Ellis 13 August, 2020

Apple announced on Thursday that it had removed the Fortnite app from the Apple app store, claiming that Fortnite parent Epic Games knowingly violated the terms of its agreement with the tech giant.

Apple's has had a long-standing insistence that any company distributing an app through the Apple app store had to agree to pass along about 30% of any revenue from digital goods purchased through the app. That requirement has been a source of anger from many developers. Obviously the lost revenue is an issue, but some developers are also unhappy with the deal because they claim that Apple is then able to launch similar products through the app store with no revenue share, essentially giving the company a financial advantage in the app marketplace.

Epic Games updated its Fortnite app early Thursday morning to allow iPhone users to purchase the in-game currency V-Bucks directly from the gaming company at a 20 percent discount. Apple quickly removed the Fortnite app from the app store, which means that while Fortnite iPhone users will still be able to play the game on their phones, they won't be able to update the app. Apple also issued this statement explaining the move:

"Today, Epic Games took the unfortunate step of violating the App Store guidelines that are equally applied to every developer and designed to keep the store safe for our users. As a result their Fortnite app has been removed from the storr. Epic enabled a feature in its app which was not reviewed or approved by Apple, and they did so with the express intent of violating the App Store guidelines regarding in-app payments that apply to every developer who sells digital goods or services.

Epic has had apps on the App Store for a decade, and have benefited from the App Store ecosystem - including its tools, testing, and distribution that Apple provides to all developers. Epic agreed to the App Store terms and guidelines freely and we're glad they've build such a successful business on the App Store. The fact that their business interests now lead them to push for a special arrangement does not change the fact that these guidelines create a level playing field for all developers and make the store safe for all users. We will make every effort to work with Epic to resolve these violations so they can return Fortnite to the app store."

For its part, Epic Games seems to have made this move in a calculated effort to provoke a reaction from Apple. One which would hopefully lead to a negotiation over the current App Store agreement between the two companies. Epic Games pushed the updated app out from the server side instead of sending the app to the App Store submission process. That process would have almost certainly denied the update, but left the old version Fortnite app available through the App Store. But by forcing Apple's hand in this way, the issue will no doubt receive a great deal more attention from the press and from users than Epic would have gotten by simply having the latest version of its app turned down.

It's also worth noting that someone from Epic Games was contacting journalists and industry writers Thursday to give them a heads-up on the move. The company clearly wants more attention paid to its complaints and it will certainly get its wish now. They have also expanded the issue to their entire customer base. Users who sign onto Fortnite through any platform now see a protest video that is based on the iconic Apple "1984" Super Bowl ad. The service has expanded its 20% off discount on V-Bucks to all users, not just those using an Apple device. 

It's a dispute that is very reminiscent of the current battle between streaming services HBO Max & Peacock vs. Roku and Amazon. The issues of revenue sharing between content owners and marketplace/distribution companies is an increasingly contentious problem. The current revenue share from a digital product can be substantial. But content owners also realize that these tolls won't go away and over a period of years and even decades, it can add up to hundreds of millions of dollars of lost revenue. The app analytics company SensorTower estimates Apple customers have spent $1.2 billion on Fortnite in-app purchases since March 2018. That would translate to roughly $840,000,000 to Epic Games, and $360,000,000 to Apple. 

Update (3:31 p.m. CT): Epic Games has posted an update for users, explaining what the dispute with Apple means in the short run. It is also encouraging users to share their unhappiness by including the hashtag #FreeFortnite:

"Fortnite remains available on Google Play, PlayStation 4, Xbox One, Nintendo Switch, PC, Mac, GeForce Now, and the Epic Games app on Android. Your account, progression, and purchases also remain available on these platforms.

Because Apple has BLOCKED your ability to update, when Fortnite Chapter 2 - Season 4 releases you will NOT be able to play the new Season on iOS. Make your voice heard with #FreeFortnite"

Update (3:50 p.m. CT) Spotify has released a letter supporting Epic Games in this fight. It's worth noting that Spotify had a similar battle with Apple several years ago over the issue of revenue sharing:

"We applaud Epic Games' decision to take a stand against Apple and shed further light on Apple's abuse of its dominant position. Apple's unfair practices have disadvantaged competitors and deprived consumers for too long. The stakes for consumers and app developers large and small couldn't be higher and esuring the iOs platform operates competively and fairly is an urgent task with far-reaching implications."

Last modified on Saturday, 21 November 2020 08:38